Welcome to Taking Stock, a space where we can take a deep breath and try to figure out what the COVID-19 economy really means for our finances. Every month, personal finance expert Paco de Leon will answer your most difficult, emotionally charged questions about money. This last two years have forced many of us to reprioritize our finances, and there’s no clear road map for getting through the pandemic yet — but Taking Stock is here to help us figure it out together.
Last time, we talked about what recourse renters have if their landlord wants to raise the rent by an exorbitant amount. This week, we heard from Refinery29 readers on the highest annual rent increase they've ever faced, and what they did about it.
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Ary, 30 - New York
Ary lives in New York City, and moved from Brooklyn to Manhattan when apartment prices in many parts of Manhattan fell during the pandemic. "To me, the dream was to be able to live in Manhattan, and with COVID, it became a real possibility. Work and everything else in my routine was there, so it made sense," she says.
"We found a three-bedroom for $2,400, which honestly was cheap for the area and the number of rooms, but it’s not like the apartment was in great condition. We tried being the best tenants possible, even paying rent before the 1st [of the month] to show them we were committed and reliable," says Ary.
"Then came the dreaded letter in December saying that due to the demand and the original rent, they have decided to offer us a renewal at the rate of $4,200," she says. "Our broker told us they might raise the rent a bit but never told us it was even legal to do this. Honestly, we didn’t even want that many rooms — after all it was just for me and my boyfriend — but it fit within the budget we had at the time and we got approved."
The hike from $2,400 per month to $4,200 — a 75% increase — meant that Ary and her boyfriend would have to move again. "We looked for everything between $2,400 to $2,800. Although being in [Manhattan] was convenient for our routine, we searched throughout Williamsburg, Bushwick, and Bed-Stuy [in Brooklyn]," she says.
"Rents have been going up and down," Ary adds. "During our search, apartments have gone from $2,300 to $2,700 within days."
Still, she doesn't regret being able to live in this apartment for a year. "The apartment served its purpose, meaning my family visited and I actually had space for them," Ary says. "We had a year in the city and that was special — but what a pain to move once again. Being a good tenant didn’t matter. I'm gonna miss the easy commute."
While NYC does have rent control laws, it applies to very few apartments. Units that are neither rent controlled nor rent stabilized — which constitute the majority of housing in NYC — can have market-rate rents where, like Ary experienced, it can skyrocket from one year to the next. "They need a cap on rent," says Ary. "It should be illegal to double someone’s rent."
Julie, 41 - California
Julie's landlord raised her rent by 42% during the pandemic. "We explained that this was wrong, and he directed us to his lawyer," she says. "Our lawyer contacted his lawyer — who responded that he doesn't have any clients with our landlord’s names."
"Our lawyer advised us to not pay the increase," Julie continues, "but we’re afraid we'll get kicked out. We run a small business and can't afford to move."
She feels that this attempted increase is especially insulting given their relationship up until now. "We've been good tenants for nine years, and [the landlord] hasn't upgraded anything, so we feel like they're being greedy," she says.
Jose*, 63 - Florida
Jose's recent rent increase wasn't just extremely high — a hike of $655 per month — he believes it was discriminatory. "I submitted a case based on racial discrimination through the Legal Aid Society," he says. He notes that his downstairs neighbor, a white woman, has the same apartment — a three-bedroom, two-bathroom unit. "The corporation only raised her rent $120 a month for a 12-month renewal, while they raised mine by $655. My case is being worked by a Legal Aid lawyer, soon to be submitted to the fair housing commission," he says.
"This is the highest my rent has ever increased," Jose says. "I couldn’t move, as my credit score is very low due to filing bankruptcy in 2019."
Gabriela*, 25 - Massachusetts
Gabriela moved twice during the pandemic. "The first move was from a 550 square-foot studio apartment in Boston to a 650 square-foot one-bed in Cambridge in summer 2020, because my lease was up," she says. "And then I moved within Cambridge to a 950 square-foot one-bed with a den in early 2021 due to building management and neighbor issues in my previous apartment."
"In the first move, my rent increased about $350 per month, and in the second move, it decreased about $200 per month, but I had to pay around $10,000 to break the lease [of the previous apartment]," Gabriela says. Her lease break fee was so high because she'd received two months free on that apartment. "I had to pay one month's rent plus any lease concessions," she explains. "Given that I ended up paying for the two-month discount by breaking my lease, that wasn't really worth it, but that also wasn't really a consequence of the pandemic. I definitely don't regret taking the lower-than-market-rate discount for my current apartment. It's been totally worth it."
But, she says, her current lease is up in April 2022, and her rent is going up. "I'm in the process of deciding whether to renew," Gabriela says. "My building is currently asking for 25% more if I decide to renew my lease, so I'm touring similar locations and apartments to see whether I can get a better deal elsewhere."
With a 25% increase, her rent would go from $3,085 to $3,850. Gabriela says it's the highest rent increase she's ever faced. "It's possible for me to cover the difference, but it would definitely squeeze my budget more than I'd like, so I'm a bit stressed out over whether it's actually worth moving," she says.
Paige, 28 - New York
"I moved from NYC to my mom's house after losing my job," says Paige. "When I came back to the city in March 2021, I moved to the Lower East Side and I'm paying slightly less than I was in my West Village apartment pre-pandemic. We have a much nicer place with more amenities."
Like many others who moved within NYC during the pandemic, Paige received a COVID discount. "We received three months off of the regular rent," she says. "But our lease renewal says we will no longer receive any months off, and on top of that, the monthly rent increased by $400. It's a 42% increase."
Paige loves the apartment. "My only regret is not signing a longer lease," she says. "It would have been worth paying more monthly to stay in this place longer. When I initially signed the lease, I still wasn't working regularly, and contract jobs were very unpredictable so I was uncomfortable paying more. Now that I have a salaried position again, I wish I would have paid a little more and signed a two-year lease."
Paige says that it seems likely she will have to move again. "We tried negotiating our rent, but they were only willing to reduce it by $200 per month," she says. "With the market being what it is, we're in a really tough spot. It feels completely egregious that landlords can raise rent in such extreme ways. We need rent control now."
Tara*, 32 - Melbourne, Australia
Tara didn't move during the pandemic — but she wishes she'd renegotiated her lease renewal in August 2021. "Even though we had seen listings in our building for cheaper than what we pay, it never occurred to me to ask to negotiate," she says. "A friend later told me she negotiated cheaper rent based on screenshots of listings she took when it was time to resign her lease."
Tara does have experiences with outrageous rent increases, though. "I lived in Hong Kong for most of my 20s. Once, a landlord increased the rent for the two-bedroom flat I lived in with my partner from 14,500 HKD to 18,000 HKD — approximately $1,850 USD to $2,300 USD," she says. "We arranged to meet him to discuss, and came prepared to agree on some increase as long as it came with an agreement that he would take care of some long-overdue repairs."
"The ‘negotiation’ lasted less than five minutes," Tara says. "He wouldn’t talk unless we signed a new lease with the increased rent first, which we, of course, did not. So we said we’d move out, and he waved his Rolex in our faces while repeating that he didn’t need our money. We were so pissed off because the flat was in a great location and had an open plan kitchen/living room, a rarity in HK, but a great use of the tiny spaces. We ended up moving just one subway stop over, walking distance from my work, with really nice landlords — and we paid 14,000 HKD."
*Names have been changed to protect identity