New Yorkers are willing to pay on average $56 more per month in rent in order to be just one minute closer to Manhattan’s main business districts via subway, says data-driven media site FiveThirtyEight. The higher rents are a clear indication of both the value of convenience, and the truth of the old real estate adage — location, location, location.
However long-term construction can severely impact rental prices along affected train lines, and the impending 18 month L train shutdown in 2019 could end up saving Williamsburg and other residents along the L line anywhere from $200 to $450 per month in rent according to FiveThirtyEight’s findings.
To come up with its estimate, FiveThirtyEight analyzed more than 63,000 one-bedroom listings from StreetEasy’s 2015 data set. StreetEasy linked each home to its nearest subway station, and calculated the approximate travel time from that station to either Midtown, or Downtown Manhattan — widely considered to be the two primary business hubs in Manhattan.
Next, FiveThirtyEight ran a regression to determine the relationship between the price of a one-bedroom home and the average commute time to either Midtown or Downtown Manhattan, which led to the average $56 rent increase per minute decrease in travel time finding.
On average, the shutdown could add anywhere from four to eight minutes to travel times from Brooklyn into Manhattan. The shorter the inconvenience, the less residents can expect to shave off their rent — a four minute addition to travel time could result in saving residents $224 per month on rent, whereas an eight minute addition could shave nearly $450 per month off their monthly rent, at least until the construction is complete.
“Living in the world of New York real estate, you very quickly realize, is all about trade-offs,” said Krishna Rao, an economist at StreetEasy told FiveThirtyEight.
Those trade-offs aren’t just about commuting time. Places with short commutes are also often places with other desirable characteristics: restaurants, nightlife and convenience, both in terms of getting to other places in and around the city and of getting people from other parts of the city to come to your neighborhood, FiveThirtyEight points out.
The addition of a train line to a neighborhood could have the opposite effect that the L train shutdown might have in Brooklyn.
The Second Avenue subway, which will run from Hanover Square in Downtown Manhattan and head up to Manhattan’s 125th Street, is due to open later this year but rents have already risen on homes located close to its stations, Jonathan Miller, president of Miller Samuel Real Estate Appraisers and Consultants, told FiveThirtyEight.
The L train shutdown could also potentially drive residents to seek out shorter commutes in other boroughs — like Queens, where neighborhoods along the 7 train line are experiencing similar growth seen in Williamsburg when it was rezoned back in the early 2000s, according to Daniel Wechsler of Ariel Properties.
With its convenient proximity to Midtown Manhattan, Long Island City (LIC) in Queens also experienced rapid growth after it was also rezoned in the early 2000s.
Two bedroom homes in LIC currently average nearly $3,000 per month, but rental prices drop the further inland you are along the 7 line — also a striking similarity to the Williamsburg boom, where Williamsburg’s growth expanded into nearby neighborhoods, like East Williamsburg, as residents moved deeper into Brooklyn in search of more affordable housing.
“The people who can afford to pay the premium also have the option to go elsewhere where there’s also more inventory at that price range,” Ralph Modica, a Manhattan real estate broker told DNAinfo.
You read the full FiveThirtyEight report here.