North Brooklyn renters who signed 2018 leases are the biggest winners in wake of the L shutdown cancelation
For the past two and a half years, many New Yorkers were filled with anxiety as news of a full 15-month L train shutdown broke, with shoddy mitigation plans following more than a year later. Panic prompted many to move out of neighborhoods in North Brooklyn, particularly Williamsburg and Greenpoint, where the implications of the shutdown were expected to be felt the most. But last week, with less than four months to go until the much-anticipated (and dreaded) L train shutdown was due to begin, Gov. Andrew Cuomo announced plans to call off the full shutdown, citing a "highly innovative but feasible" design to repair the Canarsie Tunnel. Naturally, this prompted mixed reactions from New Yorkers.
While news of the plans to cancel the shutdown resulted in everything from frustration to relief to confusion for Brooklynites, there are some winners in the situation and according to a new StreetEasy analysis, it's anyone who signed leases in the affected areas over the last year.
The analysis, penned by StreetEasy economist Grant Long, states that rents in north Brooklyn are down 1.5 percent since April 2016, when the shutdown was first announced and it's highly probable that they wouldn't have been if a shutdown was never announced. Taking into account the roughly 20,000 rentals in north Brooklyn listed on StreetEasy in 2018, Grant "conservatively estimates" that renters signing new leases on these units "saved a minimum of $6.4 million compared to what they'd have paid if there were no shutdown and rents had remained flat."
"If we assume rents in Williamsburg would have grown at the same rate as the rest of Brooklyn—3.3 percent cumulatively since April 2016—total renter savings rises to $26.5 million," writes Grant, noting that he thinks the higher number is actually closer to the true savings. While its certainly possible that rents in some north Brooklyn luxury buildings would not have seen a significant increase had there been no plans for a shutdown, the rent would have likely increased at least a little.
Now that the shutdown is off, Grant notes that landlords are relieved there is no longer a need to offer bargains, while some are also frustrated by the "income forgone over a looming inconvenience to tenants." He predicts that property owners will be eager to make up for that lost revenue and that rent will "rise sharply over the next few weeks."
Read the analysis in its entirety here.
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