What Andrew Cuomo's plan to end the L train closure means for cheaper rent
AP Photo/Richard Drew
AP Photo/Richard Drew
- New York Gov. Andrew Cuomo announced on Thursday that New York City's L train would not shut down for 15 months as previously planned.
- While some residents are rejoicing that their commute will no longer be impacted, experts say the change in plan could drive up rental prices substantially.
- Residents who have already secured cheaper rent as a result of the planned closures could also see prices rise, according to a real estate lawyer.
Since New York City's Metropolitan Transit Authority announced it would be closing its L train - a major transit link between areas of Brooklyn and Manhattan - rental prices in the impacted neighborhoods have dropped substantially as landlords lowered rent to entice new residents and convince others to stay.These lower rents came into question on Thursday after New York Gov. Andrew Cuomo halted plans to close the subway route and announced that the city would be using new technology, used in Europe for tunnel construction, to avoid having to fully close the line.
Michael Lefkowitz, a real estate lawyer at New York-based firm Rosenberg & Estis, told Business Insider that it is likely that some landlords would have included concession clauses in their leases. These clauses might say, for example, that the lower rents being offered are dependent on the L train closing down. Now that the train line is no longer slated to close, tenants may not be eligible for those deals anymore."It all depends on how any of these concession clauses have been drafted," he said. "If there is no contingency on whether the L train closed, then the rent is lower."Those who don't have such clauses in their leases have gotten lucky, experts say.
"Renters who have managed to negotiate deals in recent months have struck gold," StreetEasy's senior economist, Grant Long, said in a comment emailed to Business Insider on Thursday.
Long said that rents in North Brooklyn have fallen a cumulative 1.5% since the shutdown was first announced in April 2016, while rents in the rest of the borough have increased by a cumulative 3.3%."I think some people got a very nice, happy new year gift," Dave Maundrell, executive vice president of new developments for Brooklyn and Queens at brokerage firm CitiHabitats, told Business Insider on Thursday.
Micahel Allen, executive manager of sales at Douglas Elliman, echoed this.
"Tenants who signed leases in the last year or so are patting themselves on the back right now," he said in an email to Business Insider on Friday.Once a lease has been executed by both parties, providing there are no clauses, the terms are binding.
The only way a landlord could wriggle out of these terms is when the lease expires, she said. At this point, residents could see prices shooting back up."Concessions are probably going to get reduced quickly," Maundrell said. "And when leases expire, previous concessions are going to burn off, without question."
- Read more on the cancellation of the L train shutdown:
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