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Brian Lehrer: It's The Brian Lehrer Show on WNYC. Good morning again, everyone. Remember the home buying bidding wars, people early in the pandemic desperate to leave big cities, snapping up properties by paying thousands of dollars over the listing price. Well, some of those people must be moving back to New York City and offering to pay a lot more for regular market-rate apartments for rent.

Joining me now to discuss New York City's rental market and how bidding wars are breaking out, driving up the price of market-rate apartments is Bridget Read, senior writer at New York Magazine. Her latest piece on their real estate site Curbed is titled Cuck Money Is the New Key Money, we'll explain that term. Welcome to WNYC, Bridget. Thanks for coming on.

Bridget Read: Thanks for having me, Brian.

Brian Lehrer: Listeners, we're going to open it up to you to help us report this story. Has anyone been outbid for a rental apartment recently, or if you moved recently, what has your experience been like? Any negotiations with the landlord that you didn't expect, or if you're a landlord, help us report the story as well. Are you able to get a lot more for apartments that you're letting than you were a year ago, even to the point of bidding wars? 212-433-WNYC. 212-433-9692, or anything related that you want to report from the front lines of the New York City rental market or to ask our guest from Curbed, the real estate side at New York Magazine. 212-433-WNYC. 212-433-9692, or tweet @BrianLehrer, of course.

Bridget, let's just get this term from your title out of the way. I guess Curbed has recently introduced this term into its real estate glossary, cuck money, C-U-C-K, cuck, which is a fairly derogatory word the way most people know it who know it know it. Now mostly used to describe a weak or a servile man. This is a word we usually hear from males on the political far-right about sexual politics, but how does Curbed define this term in real estate context?

Bridget Read: Yes, and I'm chuckling to hear you say it because this is the effect that we wanted. We wanted a vulgar word because the process feels quite vulgar. Like you were saying, the term is popularized as a way to emasculate your opponent. It's a pretty gross word, but we felt it captured the feeling that a lot of renters are having, where they're not only paying more for an apartment, a market-rate apartment, as you said, where they're not owning this apartment.

They're not only paying it, they're offering it themselves. We felt like cuck money was an evocative term to describe feeling like someone is walking all over you, but you're also laying down and letting them, and that's what a lot of people are describing when I reported this story on these bidding wars. A lot of people were just resigned to the fact that this was happening. It's becoming normalized really quickly, and we wanted something that really shocked people and felt provocative, and pretty tongue-in-cheek.

Brian Lehrer: Well, you succeeded on that [unintelligible 00:03:30]. For example, you spoke to a real estate agent, I see, who had three bidding wars recently on walk-ups in Chelsea and SoHo that all went for more than $600 above the asking rents. A Brooklyn agent told you that one of his one-bedroom apartments listed for $3,500 went for $4,800 a month. Who are these people? Are they moving to the city for the first time post-pandemic? Are they former homeowners who moved to the suburbs in 2020 and decided they couldn't stand the leaf blower noise? Who are these people?

Bridget Read: Well, overall, New York's population is finally increasing rather than decreasing, and I won't say post-pandemic since it's still happening, but since about 2021. The population is increasing again, and a lot of them are new arrivals. That jump from $3,500 to $4,800 was a grad student whose parents just called the broker at the end of the bidding war just to say, "We'll give you this astronomical amount just so we don't have to hear about this anymore."

There are some new arrivals. Many of them are probably quite moneyed compared to a lot of people in the city, but a lot of them are not. Some people are just stretching their budgets, and then, of course, there is a population in New York for whom the pandemic was very profitable. There is a lot of cash floating around, just not among a lot of people. We've found that it's all over the board in terms of people engaging in bidding wars, whether they're new arrivals or not.

Brian Lehrer: Well, there's a little bit of good news tucked into your answer there, which is that people want to move to New York City even now, and people with money want to move to New York City even now, because if you look at the news, a lot of times, you think, "Oh, who would want to live here with crime these days, and with the pandemic surges starting here from time to time and you don't even have to go to the office anymore if you're in the professional class. Why would anybody move to New York City?" But apparently, people are.

Bridget Read: Right. Our mayor has said various forms of "New York is back, baby," which seems to be true, but in terms of market-rate rentals, it's creating a big problem because there just aren't enough. I think you're exactly right.

Brian Lehrer: From your reporting, is this phenomenon just happening mostly in a few pricy neighborhoods or more widely?

Bridget Read: It's happening I think in most boroughs. It is happening mostly from what I can see in Brooklyn and Manhattan, where the vacancy rates are the lowest and the competition is highest, but I talked to people in Queens and the Bronx as well. It is happening city-wide, but obviously, not everyone can even participate in a bidding war. It is happening in the more affluent neighborhoods, in more affluent boroughs just because that's who can actually afford to participate in a bidding war.

Brian Lehrer: This does not apply to rent-stabilized or rent-controlled apartments. You can't do that for those, right?

Bridget Read: No. That's expressly forbidden in rent-stabilized and rent-controlled apartments. There's no bidding wars allowed. Those rents are highly controlled, and that's where we actually got the concept of key money that then became cuck money because key money used to be passed around to try to get a leg up in trying to get one of these coveted rent-stabilized apartments. Key money was a bribe, which is banned now. It's become much less common, but cuck money is the same principle, just above board and totally allowed.

Brian Lehrer: Yes. Key money, I guess that's a retro term from the 1970s and '80s where to get the rent-stabilized apartment, where the rent itself would be reasonable because it was stabilized by law, you had to give the landlord or the broker a lot of cash upfront. That was the key money and that got banned. You write asking for a best offer on a market rental apartment is legal even if it seems like it shouldn't be. Are there any rules or regulations for how these bidding wars are conducted?

Bridget Read: There really aren't any, Brian, and there was a lot of confusion out there when I reported this piece from people who just didn't really-- it seems wild and impossible that you can do a blind bid on a rental apartment. People are bidding extra money and you don't even know what you're competing with, but that is allowed, there's no regulation on that at all. Whether you're asking people for a certain amount or telling them, "We've already gotten a bid at X amount, if you can beat it." There really isn't any protocol, so brokers themselves are saying, "I don't know exactly how I'm going to conduct this. Whether the landlord ask me to do a bidding war or whether I can just tell by getting a hundred applications for one apartment in two days," that's a very normal rate that's occurring right now in terms of competitive offers coming in.

There's nothing to keep a broker from telling the landlord that and realizing that they can bid it up. Obviously, there are rules that still apply on how much a broker can charge for their fee, how much an apartment application costs, and there are obviously rules against discrimination, but in terms of how the bidding war process is conducted, it really is anything goes. It's the wild west out there.

Brian Lehrer: What does this term "best and last mean"? I know people who are bidding to buy a house or an apartment might be in bidding wars, and then, I guess, there are different ways that brokers can handle it, or the sellers can handle it in those cases, and one of them is a blind best and last offer so they don't keep bidding above and above and above. Explain this best and last and how it comes up for rentals.

Bridget Read: Sure. This is what's a little tricky, and like I was saying, there really isn't any rules, so it can be really different. Mostly apartment vacancy listings are looking the same on Zillow or StreetEasy or wherever. There's an apartment, there is a price, and only when you start talking to the agent or the landlord, or whoever is handling the rental will you start to understand that the listing price is merely a negotiation floor.

That can be an agent at a showing saying, "We'll be taking best and final offers or best and last offers." There are other euphemisms like strong offer or robust offer. It can happen after you've applied for an apartment where they'll write back and say, "We will be taking a round of best and last bids by whatever time on a day, and you just have to look at your budget and see what you can compete with, and whether that's $100 more, or like we've seen some people are just going $1,000, $1,500 more, and you have no idea whether someone is going in with that amount.

That's what that means, and it really does-- I don't know if you've ever-- if you've never participated in an auction, it's really harrowing, and so people are doing this for market-rate apartments probably every day now.

Brian Lehrer: Listeners, if you're just joining us, we're talking about the rental market. The market-rate rental market, mostly in Manhattan and Brooklyn as being reported by New York Magazine with people returning to the city or coming to the city for the first time, and getting into bidding wars for market-rate apartments for rent. Pamela in Brooklyn, you're on WNYC. Hi, Pamela.

Pamela: Hi. How are you?

Brian Lehrer: Good.

Pamela: Can you hear me?

Brian Lehrer: Yes. You have a story for us, I see.

Pamela: I do. My husband and I were displaced during COVID. We had a five-year commercial lease in a legal live workspace, and my business was shut down for two years, so we had to leave. When we came back, we had not worked for two years. We had money in the bank, we have excellent credit. We applied for at least 25 apartments, paying the fee, sometimes having to put a good faith deposit of $1,000 or $1,500 down. We were rejected for every single apartment.

We were then told we needed a guarantor, and that I should ask my father to sign for me, but I'm 62 years old. I tried to explain to them that basically, I am the father and that they wanted none of that. Then we got a guarantor company and actually got two of those were approved in five minutes for that, and not one landlord would take that either.

Find him down hysterical, crying, and told my broker she had to find me an apartment anywhere she could, and she did come up with something in the neighborhood. We were looking in the Lower East Side in the East Village, we ended up in Guaranís. It took two and a half months, and I cried nearly every single day. It was horrific.

Brian Lehrer: Wow. Do you have any tips after that nightmare for people looking for apartments now?

Pamela: Wait three months, maybe, when this calms down, and do not try to look in the hip areas because you're not going to find anything. We were told that the landlords wanted young tenants because they were easier to put things over on and that us being grownups was a problem. I heard a different thing from every landlord that we talked to, and we were very honest going in. That we had very successful business, it was just decimated in COVID, that we have an income stream. I sent 53 documents with every single application, including my rental money, including my-- literally, they knew more about me than the IRS, and it still didn't matter. They wanted somebody who worked for a big company like Google that had been vetted and was "no risk".

Brian Lehrer: Got you, Pamela.

Pamela: I don't have any suggestions except for be ready.

Brian Lehrer: Thank you for sharing your story. Difficult as it was, I think it's helpful for people to hear. Let's go next to Dana in Jersey City. Jersey City too, Dana?

Dana: Yes. Hi. Can you hear me?

Brian Lehrer: Yes. You're on.

Dana: Oh, great. I've lived in Jersey City for 28 years. I moved here because we wanted a multiethnic, multi-socioeconomic place to raise our kid in the public school system, et cetera. I've lived in the same house for over 20 years. The landlord is selling it. It's a crumbling building, but he'll get a lot of money, so we started looking for apartments.

I'm a very successful HR director. My husband works in banking. We're older, but still, and we could not find an apartment without cuck money. We couldn't, it was crazy, and even landlords that I knew, we saw one apartment. We were the first people to see it, in two hours, they had 50 applications. It's crazy because the gentrification here is off the charts.

Brian Lehrer: Jersey said he is hot, definitely. What did cuck money mean in your case, the way you just used it, who was asking for what?

Dana: Well, my daughter was looking for an apartment also in Jersey City at the same time, and she was telling me similar stories. It was just as the reporter indicates, the rents listed at, let's say, 3,000, but then they're like, "Well, that's what we've published, but we really want $3,200, $3,300 a month." I didn't do it. I put a line in the sand, and I thought, "You know what, we'll see where it goes," and as it turns out, we got a lovely, little house, but on the other side of town in a neighborhood that will probably gentrify in 10 years like our neighborhood has. Yes, it was insane, but we're okay now.

Brian Lehrer: Dana, thank you for your story. All right. Let's go back to our guest, Bridget Read from New York Magazine there, real estate site Curbed. Bridget, what are you thinking, listening to those two horror stories?

Bridget Read: Unfortunately, Brian, they're two among so many that I've heard doing this story and another story I did on my own apartment search in the Winter. This is really just what people are finding, and it's wild that this is what we're encountering for rental apartments. It really does feel like the Wild West out there. I just want to say that just because this is legal doesn't mean that bidding wars don't open up the opportunity for illegal practices, including discrimination.

Obviously, it seems a sort of slippery slope from soliciting bids all the way down to discriminating against people with different incomes and all kinds of discrimination that is very illegal, and under our laws. I just want to make sure that that's clear to people that when the environment is this competitive, just because a practice is technically legal doesn't mean that illegal or predatory practices are also happening inside of them.

Brian Lehrer: Let's talk to a real estate agent calling in. Alex in Park Slope, you're on WNYC. Hi, Alex.

Alex: Hi, Brian. Longtime listener, first-time caller. I just wanted to say that I'm a real estate agent here, and that I recently rented out an apartment in Fort Greene, and the former tenant had overstayed his welcome, let's say, by using the eviction moratorium, and the landlord had to go through a long process to get that tenant out. Then when we rented the apartment again, we raised the rent to what we thought was an appropriate market rent, but I just want to say that at least with my company, we're more concerned about finding a really qualified tenant for the landlord, and we check all the financial references. It's actually a very involved process, including credit check, and it's not just about taking the highest, most outrageous rent that the landlord can get. I just wanted to put that in and say that at least for my company, and for agents I know, we're really trying to do good by the landlord.

Brian Lehrer: Alex, thank you very much. Adam in Queens, you're on WNYC. Hi, Adam.

Adam: Yes. How's it going, Brian? I just wanted to really respect the caller two calls ago who said that she wasn't willing to do what they were asking, and moved on, but yes, I also wondered where are all these people coming from with all this money? People in their 20s and 30s, just doesn't-- which I'm in that group, and it just doesn't add up how they're affording all of this.

Then I went and visited my parents in Florida over the holidays, and spoke with some of their friends in their developments, and then I realized, "Oh, all these Baby Boomer finance people are subsidizing all of their 20 and 30-year-old kids that also have jobs, but who can afford a $5,000 a month apartment in the West Village." It's just insane. If you don't have a parent that has a blank check ready to go, I guess tough works for you, and that's really sad, I think.

Brian Lehrer: Yes, Adam, that's well there. Bridget, is inequality upon inequality. How much do you think this is about parents subsidizing the rents of their young adult kids?

Bridget Read: I think that's absolutely happening. There's the information economy, which is a pretty loose term, but there are a lot of jobs inside of that. Someone, a caller earlier was saying that a landlord-- I think it was a landlord told her they wanted someone who worked at Google. Tech companies, that's a type of job where those people have faired pretty well during this time. Then there's the caller herself who was saying that her business was decimated by the pandemic.

There is as inequality in terms of cost of living rises for specific parts of the population and rents stay really high, there's just going to be a disparity whether it's about actually building more housing stock, making more of our existing housing stock affordable. If that doesn't happen, the market is responding to insane competition. I absolutely think that a lot of it is parent subsidizing or family money coming in as well.

Brian Lehrer: You spoke to Charles McNally for your article, Charles McNally from NYU's Furman Center, which collects rent and eviction data. What did he tell you about what New Yorkers can expect to happen in the future? Is this a momentary distortion in the market and nothing more?

Bridget Read: No. Unfortunately, that was not his assessment. I think what feels like a bubble or maybe a crazy spike unfortunately we don't know whether it'll settle down, if maybe pandemic listings that were one or two years expire. Maybe more landlords put warehouse apartments, so apartments that are not being actively listed maybe put them back on the market since the competition is already so hot.

Those are things that might help pierce this bubble if there is one, but really what Charlie who's really knowledgeable at Furman was trying to say was that this is the market. That when scarcity is so intense and not enough is being done to relieve some of that pressure, the market itself is the competition. This idea that things will just stabilize because the market will regulate itself, that idea is really being challenged--

Brian Lehrer: Whoops, did we lose you, or are you back?

Bridget Read: Oh, can you hear me?

Brian Lehrer: Oh, now you're back. Yes. You had a little cell phone glitch there. This even implies policy debates and neighborhood by neighborhood zoning in policy debates, right? Nobody really wants a lot of new construction in their neighborhood. Nobody wants more density in their neighborhood but if there's a chronic housing shortage and people oppose development, then the chronic housing shortage persists, and yet development itself sometimes pushes up prices because the developers, unless there's an incentive in the law to do otherwise, only builds relatively high priced apartments.

Bridget Read: Oh, absolutely, Brian. These are debates that are probably the most important debates inside the housing space in New York and across the country. There are people who are ENBs. That's the term for their ideological belief in building and development. Then there's tenant advocates and New York has its own incredibly storied history with tenant advocacy who find development really predatory and harmful for existing neighborhoods who are just holding on. This really is a central bifurcation in terms of housing debates, and things like bidding wars are just making these questions even more urgent.

Brian Lehrer: One more call. Eti in Brooklyn, you're on WNYC. Hi, Eti.

Eti: Hey, Brian, thanks for taking my call. I just wanted to add more-- actually, some of these experience all seems familiar. It seems like it's not even about money anymore. We even have a lot of cases when we are being asked to have people pay up to 15% broker fees and the landlords would even take a cut of that from us. That's one example of where we as far as like how there's no regulations for anything. We have no inventory at all at the moment also, so it's never been so nerve-wracking doing his job.

Brian Lehrer: How different is, Eti, than say six months ago?

Eti: A good point. It's very different. It's crazy and funny to think about how just a year ago people declared New York is dead. People saw they can move to the pricest neighborhoods living in a nice two-bedroom for a very low price. Now everyone's getting priced out, paying maximum, all the legal, all the rent sale of apartments. Everything is on the maxim legal rent.

It's very different. It's crazy from having so many vacancies across the board all over Brooklyn which is where I work to being in a situation where there's absolutely no apartments. People are doing bidding wars. People are offering higher broker fees, and yet, to be honest, we are approaching the summertime and it doesn't feel like it's going to get any better. We are hoping for the best but we're not sure where it's going.

Brian Lehrer: Eti, thank you very much. We got two tweets, Bridget, asking if Airbnb is playing a role in this "housing shortage" as one of the tweets puts it?

Bridget Read: That's actually a question that I'm sure is based on an article written by my colleague Kim Velsey at Curbed where the headline was that there are more Airbnb apartments available than actual rental apartment vacancies in the city. Which is a great article from Kim. I'm sure that that's the case. We know that whether it's at Airbnb or [unintelligible 00:26:24] is another term, especially among luxury housing. There's a tone of vacancy in terms of people actually not living full time in their own apartment. Absolutely, that's happening at the luxury end for sure.

Brian Lehrer: At the lower end, your reporting comes as the results of the 2021 Housing and Vacancy Survey was released last week. One takeaway is that there are more apartments than there were five years ago overall but units that cost under 1,500 per month have essentially dried up. At the low end, there's just nothing vacant. I think from the agent's call Eti who we just heard, that there's some anecdotal evidence of that.

You also wrote in your article that the city agencies who police income discrimination have been reduced to a fraction of their size under the Adams administration with accordingly minuscule budgets, but where does income discrimination come into this if the rents are being bid up so high in some places?

Bridget Read: Sure, and there is a difference. These are really different experiences but they are related in terms of policy, in terms of priority, so income discrimination mostly in terms of how it's looked out for and enforced, a lot of it is for much lower-income tenants who are using vouchers or have other types of rent subsidies. These various departments, one is the Department of Social Services, they have something called a fair housing litigation unit, and there's also the Commission on Human Rights, and they have a source of income unit.

These are city agencies that are supposed to make sure that landlords cannot discriminate against people who, for example, are using vouchers to find apartments. These are not people who are typically involved in bidding wars. What we've seen happen in the last year is, for example, that fair housing litigation unit and this is reporting that a lot of it was done by David Brand at City Limits.

That's an outfit that used to have nine people, now it has six people, they were going to hire a lot more, and then their budget was reallocated to that other source of income unit. Then they just have one staffer who are in that SOI unit. It's part of the current administration's cost-cutting measures but the way it relates to bidding wars is that, again, in this environment where anything goes, where people are willing to do whatever to get an apartment, it's very difficult to make sure that illegal practices aren't occurring. Whether it is income discrimination or like this other caller was saying, asking for young tenants. That's incredibly illegal. That's not legal at all. That's discrimination.

I've heard about brokers taking bids on their broker fee on rent-stabilized apartments which is incredibly illegal as well. You can imagine how often this is happening and there just isn't enough, there aren't enough people looking out for it to help the most vulnerable parts of the population already who are using vouchers and who are in precarious situations and really need housing.

Then you move up in terms of income, there's going to be rampant fraud and illegal practices. There definitely aren't going to be enough people looking out for that.

Brian Lehrer: Well, there's a story that should be reported in depth as a separate, I think. That as the Adams' administration is ramping up policing on some things, it's reducing policing on other things, these things we've been just talking about.

Let me ask you one final question. Based on your reporting, how can prospective tenants avoid being gouged? Because landlords could say that they're having all these bidding wars, even if they're not, and try to get the rents up just with an illusion. How can people who are the prospective renters know what's real and what's fake?

Bridget Read: I have actually heard from some people who believe they were the subject of a mythical bidding war. It's really difficult, Brian, especially because so much of this now happens online. If you're getting emails, you can't necessarily go to a showing and see 100 people there and start to understand that the bidding war is real. All I would say to people is make sure to try to do these interactions in person if possible. Definitely go see a place yourself.

Some people are participating in bidding wars without seeing apartments in person, and I think that that is crazy, and please don't do it. Also, just don't offer more than you can pay. Maybe go in knowing if you're going to be solicited to make a higher bid, really have a hard and fast number that you're willing to go if you're willing to do it at all, and start looking into housing organizations in your neighborhood. That's all I can say.

Brian Lehrer: We thank Bridget Read from New York Magazine's real estate site Curbed for filling us in on the rental market these days. Thanks a lot.

Bridget Read: Thanks, Brian.

 

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