Many tenants consider there may be a growing cost of living crisis in America’s major cities.
New York is proving to be a hotspot for rent inflation. According to Zumper, the common rent for a one-bedroom apartment in Manhattan rose to $3,995 per thirty days in May 2022, up 41% from a 12 months ago.
Sudden double-digit rent spikes are hitting other centers including Chicago, Los Angeles and Austin, Texas. Zumper’s data shows that growth is especially strong in Sun Belt cities like Miamiwhere rents rose to $2,700 per thirty days in May 2022, a 64% increase over the previous 12 months.
During the pandemic, employees left the biggest US cities. After two years, tenants have returned, but many commuters haven’t, as firms negotiate the main points of returning to the office. Public officials are concerned about transit delays in cities like New York.
Ed Glaeser, an economist at Harvard University, says that within the age of distant working, cities have gotten more vital, not less vital. “When you’re employed with Zoom, you miss the chance to watch older people, see what they’ve done and learn from them,” he told CNBC in an interview.
But for tenants, returning to increasingly expensive cities can seem to be a frightening deal, especially in the event that they can do business from home.
Researchers say distant work is limiting firms’ ability to coach latest employees. Data generated by Microsoft employees suggests that sharing detailed information remotely is tougher, which might result in the creation of silos in serial enterprises.
“Many of those tech firms say you’ll be able to work remotely,” said Andra Ghent, a professor of finance on the University of Utah. “But , in lots of cases additionally they say we cannot pay you an identical amount.”
Watch the video above to seek out out if big cities are still value it.