Dramatic New York Rent Hikes Squeeze Tenants to Breaking Point

Outsized rent increases continue to plague NYC tenants, as everyone from incensed TikTokers to luxury high-rise residents commiserate over the financial squeeze. As New York rents surge past double the national average, one group of tenants at Midtown’s Ritz Plaza (235 W48th St bw Bway/8th Ave) has decided to demand change from the management company.

“I was forced to move out as management raised my rent by over 60% for a studio,” said one former resident of Midtown’s Ritz Plaza where tenants have united to protest aggressive renewal terms amid endless construction, alleged building safety violations, and a lack of promised amenities. “A thorough review of dozens of lease renewal terms within the past few months indicates dramatic price increases of 50-80% year-on-year,” stated a letter signed by 200 residents of Ritz Plaza, which detailed a list of discrepancies in the operation of the building.

Chris Satch, who has lived at Ritz Plaza for a year, noted that “a bunch of other people around the building, they were getting increases of anywhere between 30% all the way up to an outrageous 70%. Our building is a free market building, but it’s also fairly outrageous to say that we’re suddenly going to increase everyone’s rent by 70%.”

Several tenants cited building safety violations as a reason not to raise rents. “We have had issues with our heating system, where it leaks hot air and the heater itself gets very hot, dangerously so,” alleged one tenant, as another claimed: “My terrace is boarded up and has tape on it. I have dangling ropes.” Many were frustrated at the scaffolding that has surrounded the building since early last year. “When we signed our lease and it does say Stonehenge has the right to renovate, it doesn’t state that they have a right to have scaffolding up 16 months.” said one resident.

Satch said that in addition to in-unit issues (his apartment has faulty ventilation, causing frequent ceiling mold), there is a general lack of communication from management company Stonehenge regarding building-wide challenges. Maintenance requests will frequently go unanswered, he added. “The elevators are almost always down — there’s usually only one working elevator out of four for all 45 floors and you won’t know which one is working until you get to it,” said Satch, creating a lack of accessibility for many residents on the higher floors. He also noted that the actual lines of communication in the Ritz are down — none of the building’s intercom units function, preventing residents from contacting the front desk in real-time.

The Ritz Plaza has also been under nonstop construction, which Satch noted has come without warnings or communication from Stonehenge. “There’s constant drilling and hammering — you name it, it’s out there. A lot of us are working from home, and it can be very, very distracting, and sometimes surprising — they don’t let us know what’s happening and then suddenly there’s some dude coming down a rope next to your window and it’s like, ‘Oh, hello, there!'” he said.

The Ritz Plaza residents’ letter asks for “a meaningful discussion and action to implement a fair and reasonable cap on the percentage increase in renewal terms offered to tenants” from Stonehenge, the building’s management company. But not all tenants in NYC have the same financial bargaining power as those at the Ritz, where units rent for an average of $5,712 a month. 

Despite an improving economy, an average of 22% of New York State renters fell behind on payments in the second half of 2021, according to a new study from real estate accounting firm Stessa. New York State had the third-highest percentage of renters behind on payments in the US, with South Carolina at #2 and Louisiana topping the list. NYC’s status as a high cost of living city was cited as one of the key drivers of financial strain on renters, with many city residents at a breaking point after receiving astonishingly large rent increases. 

Stessa’s study found that of the 877,503 NYS renters behind on payments, the median household income was $73,398 — barely above the national average of $67,340, despite one of the highest costs of living in the country. Lower-paying hourly jobs in hospitality and retail (an industry also battered by pandemic closings) correlated with the likelihood of tenants being behind on rent or not having savings to weather income loss. The minimum wage in New York City is $15 an hour, and the average monthly rent in Manhattan is $3,467 a month. On a $15/hr salary, renters would need to work over 60 hours a week to afford a $3,467/month apartment, not including taxes or other expenses. In Hell’s Kitchen, where the average monthly rent is $3,816 a month, a renter earning a $15/hr salary would need to work nearly 65 hours a week.

Despite an initial eviction freeze and $50 million in federal funds allocated to rental assistance (although many states have yet to receive the money), the Supreme Court struck down the eviction moratorium in August 2021, leaving many renters defenseless against significant increases and a scarce supply of available apartments.  While NYC evictions have not yet meaningfully increased, they are expected to rise over the course of the next few months, according to a recent Politico report. “It’s like climate change, it’s happening slowly,” activist Cea Weaver of tenant advocacy group Housing Justice for All told reporters. 

Back at the Ritz Plaza, turnover may be slightly faster. As Ritz Plaza resident Satch exclaimed upon opening his lease renewal, “Our rent is going up about 45%. If it was under, or even matching inflation, I’d be fine. But at 45%, I’m upset. Don’t get me wrong, our rents aren’t cheap to begin with — I don’t think anyone’s rent is cheap to begin with. But it really does hurt.”

W42ST reached out to Stonehenge NYC, a request for comment was not immediately returned.