Last year, real estate analysts predicted rents would rise along the new Manhattan Second Avenue subway line. But several months after the line’s New York City debut, some Manhattan landlords are faced with the dilemma of holding onto empty units or dropping prices to attract renters, according to analysis conducted by Crain’s New York Business.
The new subway line has been in the making for nearly one hundred years to ease over-crowding on the Lexington Avenue line — currently the East Side’s only subway line. The Second Avenue line comes at cost of about $4.5 billion and adds three stations to the Q line in its initial phase, making it the most expensive train line in the world.
The current phase adds three stations following the Q train’s already existing Second Avenue stop: East 72nd Street, East 86th Street and East 96th Street. Future plans include extending the line up to Harlem and across 125th Street, which will cost as much as an additional $6 billion to complete, according to some estimates.
The opening of the new Second Avenue subway line had many landlords with properties close to the new stations salivating at the prospect of upping the rent, and many experts predicted rents along the line would increase in the range of $300 up to around $460 per month.
But luckily for renters, that’s not what happened at all — not so far, at least.
Asking rents for more than 50 percent of the 71 apartments in the vicinity of the three new stations on the Second Avenue line between last year and the first few months of this year, Crain’s reported, using data from the listing site StreetEasy. And while most of the decreases were moderate, some were far more severe — one unit on East 72nd Street recorded a decrease of more than $1,000 between April 2016 and January 2017.
“If you had an apartment on the market in December, and it didn’t get rented before the holidays, you’ve got an empty unit heading into a notoriously slow time. Landlords would likely have to cut the price,” senior economist for StreetEasy Grant Long told Crain’s.
So why didn’t prices go up as predicted along Second Avenue?
For starters, the new “line” isn’t much of a line. It’s only three stations, and two miles of track, The New Yorker wrote back in February. The Second Avenue line is actually more of an extension, or a “stub-way.” The New Yorker dubbed the new line the “Q tip.”
And while ridership on the new Second Avenue line is estimated to be around 200,000 New Yorkers daily, many straphangers already ride the nearby, older Lexington Avenue line. The real usefulness of the Second Avenue line will be seen if future phases come to fruition.
Phase Two of the Second Avenue line remains in limbo as the city scrambles to find the necessary funds. In order to remain on target for its slated 2019 grand opening, trackwork would have to have already begun. Future phases remain even more questionable, and perhaps decades away.
“We are getting into our high season,” director of brokerage services for Bond New York Douglas Wagner told Crain’s. “And the fact is that the Q train now offers a major convenience to consumers who had to walk 15 minutes to get to the subway.”
But Kobi Lahav, the managing director at brokerage Modern Residential offered another opinion. “I think the subway opening got swallowed up in the pushback from tenants against inflated prices,” he told Crain’s.
Click here to read the entire Crain’s article.