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Is $500 rent increase legitimate in NYC?

Moved into a walk-up rental 1B apartment in NYC last August, my husband and I received a first renewal notice yesterday, which told that the new rent would be $2200 from current $1700. Is this a common practice? We had paid the monthly rent on time, never made loud noise, etc. What is the best way for us, either try to negotiate with the management company or to find the new apartment again? Would you tell me how we shall negotiate on the new rent?

Thank you very much in advance.

Pengu

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May 31 2012 - New York
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Answers (2)

Profile picture for pengu1

Thank you very much for your detailed advice, JasonTrue. Which is very useful input for us. I see 30% increase is not common practice.

Probably our move costs  around $2500 (broker fee + mover). So our "X" would be $200 to $300.

The market price (for no elevator, no laundry in premises) in our neighborhood is about $2000. We still don't know the landlord's intention and will never know. I just feel more like they want us to move out. 

Right now we're thinking toward moving out of this apt., and buying an apt. for ourselves sometime next year. It's too scary to live in a (non rent controlled) rental apt.

Thank you again! 

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June 06 2012
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For what it's worth, this says to me the landlord is gambling, or actually knows, one of the following to be true: 1) someone else is willing to pay $2200/month for your unit, or 2) it'll be too much hassle for you to move to avoid the rent increase, because you'll either spend too much on moving costs or there aren't similar units available nearby at the price you've been paying.

Under normal circumstances, unless you were told you were getting a special promotional rate (and sometimes even then), it's pretty unusual to demand a 30% increase in rent. I'd wager that most rent increases are only a tiny bit above the landlord's sense of the average market increase; the fact that you've got such an outlier suggests that the landlord knows something you don't. On the assumption that you'd be able to get a year lease on this new deal, I'm guessing it wouldn't cost you $6000 to move (though I don't know how much local moves would cost in New York). I'd also guess that you could find something else at least within the same ballpark range. ($1700-$1850).

There's also a small chance that the landlord just wants the unit vacant so that they can do some sort of renovations that would enable fetching a higher rent. But as a small-time landlord myself, that wouldn't be my first choice; I'd rather have a stable, boring tenant and delay renovations until the tenant chooses to move.

In your shoes, I'd survey available options near you, figure out what you'd have to pay if you got a similar unit in another building, and figure out what the value of not moving is to you. You can say to your landlord "I'd accept a rate increase of X", where X is some number close to what you would tolerate, but "otherwise I'm probably going to need to move." Then follow through. This is pretty likely to work in any city; my only New York specific concern is that I think the tenant often pays apartment broker fees in many cases, which isn't as common in other cities. That could certainly be a factor in any of your move cost calculations.

As a landlord, I'd factor the cost of getting a new tenant (broker fees, the lack of revenue from an unoccupied unit) against the alternative of keeping rent at a predictable level with a stable, unproblematic tenant, and moderate any of my impulses to increase rent based on my tolerance of the risk of losing a good tenant.

When I've been faced with rent increases in the past, I usually tolerated one or two small changes and then moved when I felt like there was somewhere that was a better use of my money. In one case, I ended up spending a bit more than the rate increase in exchange for a much more impressive interior and more interesting location. But a 30% spike is pretty hard to stomach, and I'd probably only tolerate it if I was getting quite a deal to begin with. I don't know the market in your particular neighborhood





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June 05 2012
 
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