New York City, ever known for taking the real estate and rental advice from the rest of America and throwing it out the window, is now going through a more unexpected demographic change. When we think of who actually rents luxury rentals, the first group that comes to mind is usually investment bankers, mainly those in their 20s and 30s who fill the tangled streets of Lower Manhattan early in the morning and seemingly beat rush hour both to and from work. That was true until recently, and while financiers still comprise the largest portion of renters, they no longer form the majority that they used to be. Instead, an eclectic tech-savvy generation has usurped traditional business, and in turn, the rental market.
To try and understand why this shift is occurring, it is important to look at the make-up of New York City as a whole and its influence as both a financial and media center. Perhaps the city’s two oldest and most established professions, both have had to radically adapt due to the advent of the Internet. While working with international finance has never been easier, largely because of real-time communication, media has had to streamline its work onto the Internet and away from paper, radically changing production cost and speed. To be successful, those in these two professions must be keenly aware and knowledgeable about the Internet and business, narrowing down the field drastically, as only newer and younger entrepreneurs fully understand the nuances and scope of the Internet and its wide-ranging effects.
At the same time, in most cases this is not high-stakes investment that can affect national economic outcomes, so this burgeoning group is still trying to make headways into the luxury rental market in particular. Unfortunately, even as both investment banking and media have had cuts in employment and stalled salaries, the rental market has no sympathy. Rents are still going up, a product of migration into the city, higher demand than new supply can be created, and investment bankers’ best friend, inflation.
Perhaps as more new construction and conversions become available, whether in the Financial District, Midtown West, and other fast-growing neighborhoods, rents might go down, but in the wacky world of renting we call Manhattan, no one knows. At Luxury Rentals Manhattan, we do know that new rentals are hot and that they will continue to add supply in an effort to make every New York City renter’s apartment a luxurious abode, and to appease this growing new niche, allowing them to fully absorb what makes this city so great.
