New Yorkers Spend Over $10,000 in Upfront Costs for a Rental: Report

Rents In The U.S. Fall For Third Month In A Row — (Photo : Photo by Joe Raedle/Getty Images) An 'Apartments for Rent' sign hangs in front of a building on December 06, 2022 in Miami Beach, Florida. Reports indicate that apartment rents across the country dropped in November by the most in at least five years. National index of rents fell by 1%, the third straight month-over-month decline.

Some residents in New York may not afford to move as the average upfront cost of securing a new rental apartment soars to over $10,000.

An analysis of data by the online renting platform StreetEasy found that the average upfront cost of securing and moving to a new rental apartment in New York was more than $10,400 in 2023. This number is a 28.7% increase from the average cost of moving before the COVID-19 pandemic. It is also the largest sum in more than a decade.

Due to the rising moving cost, which amounts to 14% of the city's median annual household income, many New Yorkers now cannot afford to move out. Specifically, 43% of New Yorkers polled said the upfront cost impacted the homes they were able to afford, while 23% said it affected their ability to move. This means families with children may be forced to stay in a smaller home while those whose grown children have moved out may find it difficult to downsize.

"A lot of people forget that it's not just soaring rent keeping New York City renters in a really tight spot," Kenny Lee, a StreetEasy economist who helped conduct the data analysis, told the New York Times.

What's Included in the High Upfront Cost?

The analysis found that the broker fee, a commission paid by the renter to the broker who secured the apartment, makes up the largest portion of upfront costs. Typically, renters would be required to pay from one month's rent to 15% of the annual rent as a broker fee, except if the apartment is marked as a "no-fee rental." However, the number can be higher in places where there is more demand among renters.

In addition, the analysis also took into consideration a security deposit, which is usually equal to one month's rent, an advance payment of rent, and the application fee for a credit and background check, which is around $20.

The upfront cost of moving could still be higher than $10,000 if there are additional charges such as pet fees, amenity fees, and move-in fees. These were not included in StreetEasy's calculation.