May 11, 2025
Just when we thought the New York City rental market couldn’t get any tighter, here come tariffs adding fuel to the fire. Developers and renters alike are about to feel the pinch, and two boroughs in particular — Manhattan and the Bronx — are set to be hit the hardest.
Tariffs on imported steel and aluminum are still in full effect, and that’s a big problem for real estate in a city that relies heavily on new construction to keep up with demand.
With material costs surging, many developers are hitting pause — or pulling out entirely — on projects that were already in motion.
And where there’s less construction, there’s less supply, and where there’s less supply... you guessed it: higher rents.
Ironically, it’s the areas that had been making the most progress in multifamily housing — Manhattan and the Bronx — that are now most exposed.
Both boroughs saw a spike in building permits last year, with more than a 24% jump compared to previous years.
But the very momentum that brought hope for housing relief could now be stalled by rising construction costs.
We’re already seeing rents across the city climb. Manhattan’s median asking rent just hit $4,495 — a 5.5% jump from last year — while Brooklyn's came in at $3,748.
Even the Bronx, historically the most affordable borough, saw rents rise to $3,010, despite the smallest year-over-year increase.
Over the last five years, Bronx rents are actually up more than 40%, signaling a serious shift in where the city’s demand is headed.
And here’s the kicker: affordability is becoming a myth. According to the classic 30% income rule, you’d need to make nearly $180K a year to comfortably rent in Manhattan.
In the Bronx, that number is still over $120K — and actual median incomes don’t come close.
So what does all this mean for renters and investors?
For renters, the squeeze continues. The city’s demand for smaller units (studios to 2-bedrooms) is rising, but supply can't keep pace — especially with developers hesitating to build.
For investors and landlords, this could be an opportunity to re-evaluate the markets they’re betting on.
Demand is growing fastest in the outer boroughs, and despite the tariff headwinds, there may still be upside in areas like the Bronx and Brooklyn — if you can navigate the rising costs.
As a realtor, I’m watching this unfold in real time. Conversations with clients — both buyers and renters — now involve more talk about income strategy, relocation options, and long-term planning.
The name of the game in 2025? Flexibility, creative financing, and understanding how global policies like tariffs are shaping our hyperlocal markets.
Disclaimer: This content is meant for informational purposes only and is not intended to be construed as financial, tax, legal, or insurance advice.
