New York City Renters Cope With Squeeze

Like the legions of aspiring poets, tap dancers and musicians who came before her, Nina Rubin, a 29-year-old graduate of Wesleyan University, has struggled to find halfway decent housing in New York. Earlier this year, she ended up in her most unusual home yet: an office.

After taking a job as an instructor at Outward Bound, Ms. Rubin, along with some of her co-workers, settled into the top floor of the organization's Long Island City headquarters. She camped out in a bunk bed; others converted nearby office cubicles into sleeping spaces, or pitched tents on the building's roof. To create some privacy, they hung towels and sheets around their bunks.

While Outward Bound officials stress that they view these cubicles and tents as temporary housing solutions, Ms. Rubin, who has since moved to Vermont for a short while, was grateful for a free place.

As the apartment-hunting season begins, fueled by college graduates and other new arrivals, real estate brokers say radical solutions among young, well-educated newcomers to the city are becoming more common, because New York's rental market is the tightest it has been in seven years. High-paid bankers and corporate lawyers snap up the few available apartments, often leading more modestly paid professionals and students to resort to desperate measures to find homes.

While young people in New York have always sought roommates to make life more affordable, they are now crowding so tightly into doorman buildings in prime neighborhoods like the Upper East Side that they may violate city codes.

They are doing so in part because the vacancy rate for Manhattan rentals is now estimated at 3.7 percent, according to data collected by Property and Portfolio Research, an independent real estate research and advisory firm in Boston. It is expected to shrink to 3.3 percent by the end of this year and to 2.9 percent by 2011.

"It's only going to get more difficult to rent an apartment in New York City," said Andy Joynt, a real estate economist with the research firm. "While rents continue to rise, it's not sending people out of the city. There's still enough of a cachet," he said.

While New York City has always had a vacancy rate lower than most other cities, rental prices jumped last year by a record 8.3 percent. Some potential buyers, scared by the national slowdown in housing sales, decided to rent instead of buy. The housing crunch has also been exacerbated by the steady growth of newcomers.

The relocation division of the brokerage company Prudential Douglas Elliman had found homes for 4,000 families moving to the New York, New Jersey and Connecticut area in 2006, a 15 percent jump from the year before, and many of them wanted to live in Manhattan.

Stephen Kotler, executive vice president of the division, said he expected business to increase by 15 percent again this year, based on the requests he has already received from banks, consumer-products companies and media firms. Even though his clients can afford high rents, he said, they do not have many choices.

"There's going to be limited inventory and a lot of demand," Mr. Kotler said. "There just hasn't been enough rental product built," he said, as, developers have said that the price of land and the costs of construction in the last few years have made it impractical to build rental buildings. They have instead focused on condominiums.

Renters without high salaries have not been shut out of the market. They are squeezing in extra roommates or making alterations as never before much to the frustration of landlords. The rents for one-bedroom apartments in Manhattan average ,567 a month, and two-bedrooms average ,854 a month, according to data from Citi Habitats, a large rental brokerage company, but rents tend to be far higher in coveted neighborhoods like the Upper West Side and TriBeCa.

Because landlords typically require renters to earn 40 times their monthly rent in annual income, renters of those average apartments would need to earn at least 2,680, individually or combined, to qualify for a one-bedroom and 4,160 to afford a two-bedroom.

Young people making a fraction of those salaries are doubling up in small spaces and creating housing code violations, said Jamie Heiberger-Jacobsen, a real estate lawyer with her own practice. She is representing landlords in 26 cases that claim overcrowding or illegal alterations in elevator buildings in Murray Hill, the Upper East and Upper West Sides and the Lower East Side. A year ago, she handled a half-dozen such cases.