They Could Buy, but Why? Meet the High-Renters

By: Joanne KaufmanVIEWED 118 TIMES

Published: 5/21/2017Source: The New York Times

Featuring agent Stuart Moss:

Since moving to New York City 16 years ago, Timothy Brown has lived in seven rentals, a succession of studios and one-bedrooms in Brooklyn, Chelsea, Murray Hill and now Kips Bay, where he has been subletting in a postwar high-rise condo for the last three years.

His real estate agent has been urging him in the strongest possible terms to buy a place, and Mr. Brown, 41, an interior designer, has the means to do so. The inclination? Not so much.

“My nature is to move every couple of years,” he said. “My broker has tried to convince me about the tax write-offs of ownership, but I have enough of those with my business.” Although Mr. Brown is renting (he pays $3,100 a month), he was permitted to renovate the kitchen and bathroom and thus put his stamp on the place — just as if he owned it, something he has done in almost every apartment he has rented.

Buying an apartment in New York City is a marker of success for some residents. It says that they have accumulated an impressive pile of cash for a down payment (typically 20 percent, sometimes more) and that they have sufficient liquidity (and charm) to pass the scrutiny of a co-op or condo board. But plenty of people are like Mr. Brown, who have the wherewithal but not the will.

“Renting, for many people, is just a very convenient lifestyle move,” said Gary Malin, the president of the real estate firm Citi Habitats. “They may not be sure the city is right for them, or what part of the city they want to be in. If you make a mistake, once your year commitment is up, off you go.”

Others, however enamored of the city, may not be certain about the length of their tenure. And the fees and taxes involved in buying “are so high, it doesn’t make sense unless you’re going to be here for at least four or five years,” said Kathy Braddock, a managing director at William Raveis New York. “We are a city of renters. Most New Yorkers rent.”

Indeed, rentals make up more than two-thirds of the housing stock in New York City, said Jonathan J. Miller, president and chief executive of the real estate appraisal firm Miller Samuel.

Ms. Braddock said: “Here, there’s no stigma attached to renting, which is not true elsewhere in the country.”

The financially savvy may prefer to invest in the market rather than tie up so much capital in a classic six. And it’s not as if the well-heeled are giving up anything by refusing to buy. For those willing to pay for the privilege — in some instances, the mid-five figures — there are a number of new rental buildings with brand-name designers, kitchens with Sub-Zero refrigerators and Wolf stoves, a laundry list of amenities and hot-and-cold running staff.

“Back in the day, the great incentive to owning was that the product was better than a rental,” said Stuart Moss, an associate broker at the Corcoran Group. “But what happened was that many condos were built, and as a renter in those buildings you could get the high-end finishes. You no longer had to buy to get that quality and that more sophisticated design.”

In response, developers of rental properties have raised their games. With buildings like 456 Washington in TriBeCa, where rents are $9,500 to $45,000 a month, and the Easton on Third Avenue and 92nd Street, “we’re providing a long-term rental alternative for people who can truly afford to live anywhere in the city,” said Bryan Cho, an executive vice president of the Related Companies, who listed features in these buildings like custom millwork, marble bathrooms, elegant finishes and high-end appliances.

“We had a broker tell us, ‘My clients have $9 million to spend on a co-op or condo, and they’re getting frustrated because they can’t find the home of their dreams,” Mr. Cho said. “‘They’re making compromises and feel embittered about it.’ And then the client says: ‘Why don’t I keep my liquidity working for me? Why don’t I buy a country place somewhere and why don’t I just rent the best?’”

He also talked about a few couples who bought prewar apartments on Fifth and Park Avenues and who, during the subsequent renovations, rented at the Easton, where, depending on the size of the unit, they paid from about $5,000 to $22,000 a month. “They love it so much that now they want to sell the co-op they bought and just stay at the Easton,” he said.

Uncertainty about the direction of their career or personal lives also keeps some people renting. Amanda Bradshaw is both admirably frugal and, after a succession of jobs, comfortable in her position as the director of human resources operations for an investment bank. She is at a point where she could buy — but, first off, there is that frugality. Second, she lives in a one-bedroom on the second floor of a brownstone in Midtown East, “and it’s very me,” she said. “It has great moldings and hardwood floors and a big kitchen, and it’s near Soul Cycle.”

While Ms. Bradshaw doesn’t want to keep shelling out money and not building up equity, (she said she is paying between $2,500 and $3,000 a month) and while she wants to own because it would be a declaration that she has entered a certifiably grown-up phase of life, she said: “I’m 33 and I don’t know what’s to come in the next year or two. Also, I don’t necessarily see myself as a lifetime city girl. Maybe I’ll buy in the suburbs.”

Stephen Ceurvorst wouldn’t necessarily question the mental competence of those who choose to buy an apartment in New York City. Let’s just say it’s not for him.

“This is a generalization, but renting in Manhattan is substantially less expensive than owning,” said Mr. Ceurvorst, 61, the founder and managing partner of a structured trade finance firm, who, since moving to New York in 1978, has lived all over the city — freedom he savors — and currently lives in a two-bedroom, two-bathroom apartment in the Wall Street area.

The building was built more than a century ago and has a nice feel as well as a very well-equipped gym, a billiards room, a theater and an attentive landlord. There is also plenty of space between his bedroom window and the window in the neighboring high-rise, “so I don’t have to put my shades down when I get out of bed,” he said. For this, he said he pays $5,000 to $10,000 a month, “and I could afford to pay double that.”

“There isn’t much difference in lifestyle between owning and renting in Manhattan, except that if you pay rent you can spend more on the arts and sports and still have money left over,” he continued. “I prefer to rent and go to dinner anywhere I want. Why spend the extra money to buy, when in New York you sleep in your apartment but you live in the city?”