Why is real estate so expensive in Manhattan? It didn't used to be.?

Question

I know the first thought would be that there are not enough units to house the population but in truth, New York's population has been relatively constant over the past 20 years. Rents and mortgages have far outpaced inflation. My father rented a two bedroom in 1966 for 129$. That unit would be about 3K now. I have heard it suggested that Section 8, rent control and a huge number of abandoned buildings have contributed to the spike in prices. Still, I think it must be that owners can demand these amounts because people are willing to pay it to live in the center of the universe.

Answer 1

The death of rent-control explains most of the skyrocketing costs.

You're right -- if people were unwilling to pay so much, the landlords would not be able to charge so much.

Supply & demand...

Rent control is dead in Manhattan but still exists in the oher four bouroughs.

A "rent-stabilized" apartment in Queens goes for about 2/3 of market value.

Also consider that if you live and work in Hanhattan -- you probably don't need to keep a car on the road. That is a huge savings and frees up, say, $5 - 10K per year for rent money.

Answer 2

I think you answered your own question.

It is supply and demand. NYC is the biggest stage in the world. for all intensive purposes it is the capital of the world, certainly financially. That makes it a place that is in great demand to live in by successful wealthy people.