Since the L shutdown was first announced in April 2016, Brooklyn tenants in Williamsburg and Greenpoint saw their rents fall substantially. Now that New York Gov. Cuomo has called a mulligan, they’re getting the best of both worlds, StreetEasy reports.
“We conservatively estimate that renters signing new leases in [North Brooklyn] saved a minimum of $6.4 million compared to what they’d have paid if there were no shutdown and rents had remained flat,” wrote Grant Long, StreetEasy’s senior economist.
According to StreetEasy’s estimates, if rents in the area followed the trends of the rest of Brooklyn, the number comes out to $26.5 million.
“The higher number is likely closer to the true savings,” Long added, because rents elsewhere in Brooklyn grew by 3.3 percent over the past two and a half years.
This figure only applies to homes listed on StreetEasy in North Brooklyn, and leases signed in 2018, so the total number is likely even higher than they measured, Long admitted.
“The full amount of savings among those renters renewing leases, signing leases longer than 12 months, negotiating onsite and living in other adjacent areas dependent on the L train is likely larger,” Long stated.
All this, however, is assuming that Cuomo L shutdown shutdown goes as he plans, which, given the issues many critics have pointed out, is not guaranteed.
Landlords to leverage the lack of L shutdown
As pleased as renters are at their savings, StreetEasy predicts bitterness among the landowning class, who will attempt to make up for their lost profits by extracting more money from future tenants.
“Landlords will be anxious to make up for lost revenues, and are likely to take a harder stance in negotiations despite whatever bargaining chip the lingering uncertainties over the L give renters,” Lord said. “We expect rents to rise sharply over the next few weeks as they climb back toward pre-shutdown levels.”
Currently, the difference in rent growth in North Brooklyn and the rest of the borough sits at nearly five percentage points. Now that the L shutdown is no longer happening, building owners will be eager to charge more without providing more.