Twenty-three hundred and forty-nine a month. That’s now the average rent in a non-doorman building in Midtown West, according to a report from brokerage The Real Estate Group New York. Go beyond Hell’s Kitchen or Times Square and vicinity, and the rents only go up.
The Upper West Side was once a traditional entry point for suburban-bred college graduates yearning to breathe free—and now a studio in a non-doorman building there runs to an average of over $1,800 monthly.
With Manhattan apartment rents ascending routinely to records and fresh waves of New Yorkers ever in need of lodging (the borough’s apartment vacancy rate has been well under 5 percent for years now), more twenty-something renters have been getting financial help from their parents.
“There’s no question about it,” said Daniel Baum, COO of The Real Estate Group New York. “It’s becoming more and more difficult for people, especially young people just out of school, to qualify by themselves for an apartment.”
So, during this peak rental season of May through September, the parental help comes, usually in the form of a parent as co-signer—a fail-safe for landlords when the actual leaseholder doesn’t have the financials to guarantee rent payments.
Probably the biggest financial that landlords require is having tenants prove they make annually 40 times what the monthly rent is; co-signers must generally make even more, as much as 80 times. (And it helps landlords if the co-signers live in the tristate area; it’s easier to sue someone for payment if they live close by.)
Do the math: You’re a 22-year-old new in town, working a job that pays $40,000 a year, if that. If you want to rent that Upper West Side studio for $1,800 a month, you would have to make $72,000. Or, you can get a parent or some other kindly benefactor to co-sign. (Or get a roommate or three.)
“I will tell you that the answer is yes—as the rents have gotten higher, we’ve noticed more parental guarantors and letters of credit,” said Robert Scaglion, managing director of residential marketing at Rose Associates, one of the city’s biggest apartment landlords.
Landlords have also adjusted their financial requirements—not necessarily out of altruism toward younger renters, but out of a necessity spawned by the most viciously expensive rental market in ages. For instance, some landlords allow parents to simply pay several months’ rent upfront as proof of financial prowess. Others have tweaked the number of times over the monthly rent that annual income has to be.
The evidence of Manhattan’s “dormification” is largely anecdotal, as landlords contacted for this story couldn’t or wouldn’t share exact stats on renters getting parental help. Mr. Baum, for one, knows of a landlord who recently went from a strict policy of requiring 40 times the monthly rent in annual income to … “Oh, as long as they have a good job, we’ll take a couple of months as security deposit and call it a deal.”
Alexei Krapivka, a vice president with brokerage Barak Realty, negotiates 65 to 70 leases annually in Manhattan. About 30 percent over the past six months have involved parental guarantors.
“They’re not only co-signing on the lease, they’re helping to pay the rent,” said Barak Dunayer, president of Barak Realty.