Business

Brooklyn has become so popular it now costs nearly as much to live there as it does in Manhattan

Brooklyn
Brooklyn has become the place to be in New York City.

Is Brooklyn the new Manhattan?

As Manhattanites flocked to Brooklyn over the past decade for more affordable living, the outer borough has become so popular that the once massive gap in rental prices between it and “the city” barely exists today.

“After the financial crisis, Brooklyn transformed from a cheaper alternative to Manhattan to something new,” Jonathan Miller of appraisal company Miller Samuel told The New York Times’ Michael Kolomatsky. “The Brooklyn brand became global.”

He provided the Times with data on the Manhattan-Brooklyn rental gap, dating back to February 2008. At that time, the median rent in Manhattan cost $1,050 more than the rent in Brooklyn. By 2014, the gap narrowed to $210, jumping to $777 the following year after new developments in Manhattan skewed prices higher, Miller said.

From February 2016 to February 2020, right before the start of the pandemic, the gap averaged around $531. The rent drop in Manhattan since the pandemic began has caused the gap to further tighten, hitting a low point of $171 last November.

The pandemic made Manhattan living more affordable

Rents in Manhattan, Brooklyn, and Queens all had the largest year-over-year declines on record in 2020, dropping a whopping 15.5% in Manhattan and 8.6% in both Brooklyn and Queens, per StreetEasy’s January Rental Report. The median asking rent in Manhattan was $2,750 – the lowest it had been since March 2010, when rents dropped during the Great Recession.

New Yorkers no longer had to escape sky-high Manhattan rents, and many young professionals seized the market drop as an opportunity to upgrade their living situation.

Iliana Acevedo, senior vice president of new development at MNS, told Insider in March that they’ve been seeing millennials “not only upgrading to more amenitized buildings but also upgrading in unit size and neighborhoods that they were priced out of pre-COVID.”

Two real-estate experts also told Insider last month that the search for an upgrade has seduced some millennial Brooklynites back to Manhattan, where they’re now finding the space and affordability they once left the island in pursuit of.

But that doesn’t mean Brooklyn is losing the popularity it’s spent a dozen years growing; some New Yorkers have swapped out roommates or studios for Brooklyn one-bedrooms for more than half off their pre-pandemic price.

Now that the economy is reopening and renters rush back to the city, the rental gap is slowly growing again. As of February, it stood at $370. But Insider’s Libertina Brandt reported that rents are likely to continue falling throughout 2021, so what the real estate rebound means for the Manhattan-Brooklyn rental gap is still up in the air.

Read the original article on Business Insider

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