Concessions, such as offering a free month of rent to those who sign a yearly lease, are a fairly common part of the deal when it comes to renting apartments in New York City. In fact, it has become so commonplace that it is almost the new standard in 2017. While this may seem like good news to apartment hunters, it does beg one question: what happens when these concessions are gone?
In most cases, the free month of rent is amortized over a 12-month period, which means that the discount is divided by 12 and this amount is deducted from the monthly rental payment. As a result, the tenant doesn’t get to skip a month of rent. Rather, the amount of rent is simply reduced each month. At the end of that year, the monthly rent goes back up to an amount that may be difficult for the tenant to pay.
When the tenant does skip a month of payment, it typically takes place at the end of the year or at another month that is specified by the landlord. Other concessions that landlords may offer in order to attract tenants include the landlord paying the broker’s free, offering a free membership to the building’s gym for one year, waiving amenity fees or offering a discounted security deposit. Of course, as a growing number of landlords offer these concessions, they no longer serve their purpose of making those properties attractive to potential renters. After all, if everyone is offering concessions, it becomes more of an expectation than perk for renters.
Yet, while landlords are happy to offer concessions in order to attract tenants, most are not willing to offer them in order to retain tenants. As such, renters who are looking for the same perks when they go to sign another lease are likely to be disappointed. Furthermore, landlords typically keep a close eye on the market and will increase their prices according to demand.
Overall, incentives have helped to dramatically increase the number of renters who are willing to move to outer-borough neighborhoods. Amenity-heavy developments in neighborhoods such as Downtown Brooklyn and Long Island City have benefited from offering benefits to attract new renters. Nonetheless, with the affordable rental market tighter than ever, renters are finding themselves also giving concessions in terms of how much they are willing to pay simply because they cannot afford to hold out for an affordable apartment that fits within their budget.
To make matters worse, a recent audit released by the state Comptroller, several renters inhabiting affordable housing units shouldn’t be qualified to rent there. In fact, as of December 2015, there were 160 renters earning more than $100,000 per year living in low-income apartments. Eight of these renters made more than $250,000. While it is true that a tenant who qualified for affordable housing cannot be removed if their income increases, independent investigations into some of these cases have found that the renters simply lied on their applications in order to qualify for affordable housing.