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Why the rent is too high | Congress for the New Urbanism

Why the rent is too high

MLewyn's picture

Today I began my apartment search, looking at an apartment in the neighborhood next to mine (a neighborhood less high-income than Forest Hills, Queens, where I now live).  In addition to being in a cheaper area than mine, the building is a fairly long walk to the subway (about 15 minutes, farther than numerous competing buildings) and across the street from a cemetery.  Yet the cheapest apartment rin this new building rents for 30 percent more than in my current building (closer to the subway and in a fancier area).  Why?

Part of the reason is that new construction is generally more desirable.  But I don't think that's the only reason.  The building has only 50 or so units, which means the fixed cost of construction are spread out over less units than in older buildings, which means the landlord has to charge more in rent to make a profit.  

And why does it only have 50 or so units? I would guess that the neighborhood NIMBYs held up rezoning until the height/density of the building was reduced (even though there are 20-story buildings only a block or two away).  

Imagine this story repeated over and over again throughout New York or San Francisco, and you'll understand why anything new costs a ton of money. 

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