Spending

Here's how much money you could save renting right now in big cities like NYC and San Francisco

"If you've always dreamed of living in New York ... now is actually a great time to move in."

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Fabio Formaggio | EyeEm | Getty Images

The coronavirus pandemic triggered what's been called an exodus out of the big cities. But some renters, like law student Mona Miller, are moving in the opposite direction. 

This summer, Miller moved from Denver, Colorado, to New York City to attend law school.  

"A lot of my friends in Colorado were like, 'You're insane,'" Miller said. "But now I'm here in New York and they're in Colorado with spiking [coronavirus case] numbers. And they're looking at my apartment thinking, 'Man, I think she made a good choice.'"

Miller doesn't get to enjoy the nightlife and entertainment New York City is famous for, but she was able to take advantage of falling rents to get a big discount on a luxury apartment. She pays $1,650 a month for a studio in Queens, complete with a 24/7 doorman — and a lease that included three months rent, free. Miller also scored a $100 monthly discount on rent, compared to prices from initial listings for studios in her building.

All told, Miller is saving $6,150 on a 12-month lease.

"Because by the sixth month this place had been opened ... the occupancy rate was 30%," Miller says. "This was a brand new building that had opened up just before the pandemic."

As many residents flee big cities amid the pandemic, those moving in are getting great deals on housing. Landlords are courting tenants with cheaper rent, months of free rent, free parking, and even gift cards for things like laundry and home office supplies.

Major metro areas like New York City, San Francisco, and Los Angeles are undoubtedly still expensive, but residents find them much more accessible than they used to be.

"If you've always dreamed of living in New York or dreamed of living in San Francisco, now is actually a great time to move in because this pandemic isn't going to last forever," says Redfin Chief Economist Daryl Fairweather. "Once it reaches a certain point in terms of prices, I think there's going to be a lot more people who would want to live there."

VIDEO11:1011:10
As many people flee big cities during Covid, others flock there: Here's why

Video by Helen Zhao

Many telecommuters are fleeing cities to get space

As the pandemic grinds on, remote work is redefining where people choose to live. Those once tethered to offices in expensive cities who can now telecommute are moving in search of more space, access to the outdoors, and a lower cost of living.

"So why did people want to live in the city before? They wanted bars and restaurants and museums and shopping," Nicholas Bloom, a professor of economics at Stanford University, recently told Grow. "But none of that is possible right now. So why would you stay? The city is emptying, particularly apartment buildings with no outside space."  

A record 29% of Redfin users looked to move to a different metro area in the third quarter of 2020, the brokerage site estimates.

The metro areas they are leaving in greatest numbers are some of the most expensive in the country. New York City, San Francisco, Los Angeles, Washington, D.C., and Chicago top that list.

As residents leave, rents in big cities plummet 

Rent and housing prices have responded to the drop in demand. In November, rent was down 1.3% year-over-year, nationwide, according to Apartment List. But rents have declined much more drastically in the country's most expensive metro areas.

Between October 2019 and October 2020, the median rent for a one-bedroom apartment fell by about 23% in San Francisco, 17% in New York City, 16% in Boston, and 13% in Santa Monica, according to a Grow analysis of Apartment List data.

'Whoever offers more concessions, wins'

In dense urban centers like Manhattan, there are more apartments available than there are people who want to live in them.

Yuliya Bohush is a leasing director for a property management firm that oversees over 150 residential buildings in New York City. She's renting apartments for $3,000 a month, which used to rent for $5,000 a month, in the trendy East Village of Manhattan.

"And it's not like they are flying away from the shelves, either," Bohush says. "It's a very competitive market right now for landlords to compete for qualified tenants and each month, basically, who offers more concessions, wins."

It's a very competitive market right now for landlords.
Yuliya Bohush
leasing director

Nationwide, the number of apartment buildings offering concessions spiked in April amid widespread lockdowns and has only grown since then.

Concessions are most common in the priciest cities, with about 50% of apartment buildings in metro areas like San Francisco, San Jose, Denver, Austin, and Boston offering some type of concession in October, according to Apartments.com.

The concessions are growing more generous, too. In expensive metro areas like New York, San Francisco, Austin, Philadelphia, and Miami, the number of buildings offering more than one month of free rent has increased by 10 times or more between October 2019 and October 2020, according to Apartments.com.

The most common incentive is free weeks of rent, Zillow found, followed by a waived or reduced security deposit, gift cards, free parking, waived application fees, and waived broker fees. Those incentives are saving renters a median rate of about 17% on their leases in many major cities.

'Now is a great time' to move to a city   

For some, the current rental environment provides an opportunity to live in a city they might otherwise be priced out of. 

"I think for people interested in moving to San Francisco, now is a great time," says Preston Tasoff, who moved to San Francisco in August for his first job out of college as a microbiome researcher at UCSF. A Los Angeles native, he's always dreamed of living in San Francisco.

"I didn't see the pandemic stopping my future," Tasoff says. "I took that leap of faith knowing that the opportunities that I'd get in the city were justified and that the culture of the city would rebound eventually.

"If you're a young person, if you're a college graduate, just like me ... if there's an opportunity, like there's a field you might be interested in pursuing, just take the leap of faith."

I didn't see the pandemic stopping my future.
Preston Tasoff
San Francisco renter

Tasoff pays $1,340 for his own bedroom with a balcony in a renovated four-bedroom house in the Inner Sunset region of the city, about four miles from downtown.

That's after the landlord discounted the overall monthly rent from $6,700 to $6,000, Tasoff says. And his roommates offered him an additional $100 monthly discount so they could fill the room.

"Moving during the pandemic gave me a choice in who I wanted to live with and also more choice in where I could find a spot to live," Tasoff says.

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