While Brooklyn residents are celebrating the news of the L train remaining open after initially being told three years ago that the train would shut down access between Manhattan and Brooklyn entirely for fifteen months, they are quickly realizing the result is less triumphant: rising rent prices.
The reopening of the L train, announced by Governor Cuomo as of January 3rd, has sparked huge changes in rental prices in and around Bushwick, but it has also stirred concern for those living anywhere in the metropolitan area of NYC. With the price of public transportation also increasing and the chronic maintenance issues in certain areas, renters in the most expensive cities in the U.S. like San Francisco, Seattle, and New York City are beginning to reconsider homeownership as opposed to renting. They are quickly grasping that not only can a mortgage be even cheaper than rent, but it can also help one to start building equity.
Think about every tiny thing you have to reach out to your landlord to fix. Does that apartment improvement lower your rent? No. But when you put money into your own residence, it will actually come back to you as you increase the value of your home.
Anyone who lives in New York, or any urban city in America for that matter, understands how crucial public transportation is. Not only does it directly affect the length of your daily commute, but it also plays a huge factor when apartment or house hunting in terms of both your wallet and convenience. The executive director of an advocacy group called the Riders Alliance, John Raskin, expresses his blunt concern on the issue, “The subway system is at the breaking point, and honestly, subway riders are too.”
The long-awaited “L-pocalypse” has been looming over Brooklynites for the past three years. Amongst sporadic MTA shutdowns and incessant under performance, both individuals and families residing in Bushwick and East Williamsburg have considered, or actively made steps toward, uprooting their entire lives. Citizens have been exploring new job opportunities and new boroughs to better accommodate their schedule and avoid spending half of their time on a train or bus, only to find that within a matter of weeks, the entire shutdown plan was scrapped.
Before Governor Andrew M. Cuomo’s unexpected proposal changes, neighborhoods that fell along the L train line became more affordable for renters. Now that the train will still be operating during typical business hours – you guessed it – rent prices are climbing back up.
Local bars and restaurants suffered once the train shut down in the early evening, losing the majority of their usual business as a result. Landlords also suffered from offering incentives and concessions to renters that they now regret, such as reduced monthly rates. Grant Long, an economist at StreetEasy, explains that renters who locked down leases in 2018 got an incredible deal. Long estimates, “…renters signing new leases in these units in 2018 saved a minimum of $6.4 million compared to what they’d have paid if there were no shutdown and rents had remained flat.” Rental prices in said area have dropped 1.5 percent since the shutdown was first proposed in 2016, while rental prices in other areas have gone up 3.3 percent.
Inconvenience and frustration aside, residents who bit their tongues and waited for the shutdown to actually take place are now seeing the quick jump in rental prices. Sadly, with convenience comes higher expenses.
So…what can residents do?
Considering these rental prices took a drastic turn in a matter of days, renters are hesitant to rely on rent breaks from brokers and landlords when choosing an apartment, especially while the market is just as confused as residents. The repairment plans for the Canarsie tunnel between Manhattan and Brooklyn quickly altered from being closed for 15 months to just temporary night and weekend closures. With how unpredictable rental prices are in the (recently) more affordable neighborhoods, many residents are realizing that homeownership may be a more viable option.
For those living in a large city, pursuing the dream of homeownership may sound intimidating. Most people are aware it is a huge financial investment, but the initial down payments are tough to comfortably dish out and the commitment can make one weary. Although, if you’re confident you’ll be sticking around the area for the next five years and you’re sick of the sporadic rent hikes, homeownership could be the right choice for you.
The American dream of homeownership isn’t as out of reach as you may imagine. Owning your home isn’t only a rewarding decision because you’ll have control over your surroundings, but between tax benefits, first time homebuyers programs in New York, and consistent monthly payments, it could be an extremely beneficial financial investment. We all know how jarring rental applications can be when we skim past the required annual income, so perhaps it’s time to consider putting that money towards your future. After all, homeownership is the cornerstone of long-term investing.
Interested in learning more about the journey to homeownership? Check out our newly updated guide for First-Time Homebuyers.