NEW YORK - MAY 30: A view of upper Manhattan where a crane that collapsed on Manhattan's Upper East Side at 91st Street and 1st Avenue May 30, 2008 in New York City. The crane collapsed on top of an apartment building crashing into a penthouse apartment and falling to the ground. (Photo by Spencer Platt/Getty Images)
As the economy shows some signs of bouncing back, Manhattan apartment rentals increased this Spring -- the first significant rise since last year's economic crisis.
But these signs of life are actually bad news for the renters who had benefitted from reduced or eliminated broker fees as landlords tried to fill vacant apartments.
With only a 1.23 percent vacancy rate this April, landlords are again able to increase rent and eliminate other concenssions, such as footing the broker's fee for new renters, the Wall Street Journal reports.
Brokers serve as middlemen between renters and landlords; they find apartments for prospective tenants and charge a fee --usutally at least one month's rent. Some city landlords began covering the brokers' fees last year when the housing market loosened up due to the financial crisis.
Now, at least three major Manhattan landlords, Ogden CAP Properties, Pan Am Equities, and Related Cos. will stop paying brokers' fees by early June, according to the Wall Street Journal. Others, such as Avalon Bay Communities, Inc., have already stopped.
"The pendulum is swinging back to a landlord's market," president of brokerage Citi Habitats Gary Malin told the Journal. "Owners are going to do what's in their power to stop overpaying, in their eyes, to attract clientele."
Rentals in New York City plummeted after the stock market collapse of September 2008 but now show signs of increased stability. "The rent reductions are pretty much over. It's bottomed," managing director of Marcus & Millichap Hessam Nadji told The Washington Post in April. He expects the number of rentals to grow by "4% to 6% in 2011."
Although most agree that the rental market isn't as competitive or frenzied as it has been in the past, it has certainly improved enough that landlords feel able to stop taking on brokers' fees.