This 54-square-foot studio without bathroom or kitchen rented for nearly $1,300 in Manhattan

The TikTok video took viewers on a tour of “the smallest apartment that currently exists in New York City.”

To call it an apartment is a stretch. To call it a studio is generous. It was about 54 square feet, a 9-by-6-foot room with no bathroom or kitchen. It took less than three seconds for the camera to capture the entirety of the unit. But it sits near New York University, a prime location for students and young professionals in Manhattan.

Alexander Bruni, the listing agent and TikTok video creator, told Yahoo Finance that these units are widely popular. A similar unit with the same specs in the same building just rented for $1,290 in February.

Think of these units, he said, like an old-school college dorm.

“Let’s keep it real: When we pay for a room and board in college, they’re also charging you an arm and a leg,” Bruni said.

The glitz and glam of New York City have always attracted people wanting to live in the concrete jungle, and rental prices have long reflected that overwhelming demand. While rental price growth slowed over the last 12 months due to a slight uptick in inventory, New York City continues to get more expensive.

Median asking rent in the city — including all five boroughs — hit $3,575 in February, according to listing platform StreetEasy.

“Things will start getting better as inventory increases, and the market just comes back to more of a balance between supply and demand,” Kenny Lee, economist at StreetEasy, told Yahoo Finance. “But we still have a long way to go because of this historical decades-long shortage on their building and on their supply of housing.”

Also read: Biden proposes tax credit for first-time home buyers. Here’s how it works.

Rent growth slows, but problem remains

Asking rents grew by 2.4% from $3,500 a year ago, a substantial slowdown compared to prior years. New York City rents experienced an annual double-digit climb the last three years with 17% in 2023, 20% in 2022, and 14% in 2021.

The recent decelerated growth can be attributed to a slight rise in rental inventory. StreetEasy’s tracking showed the number of available listings grew by around 20,000 units, to 240,000 in 2023. Landlords are listing vacant homes more frequently and faster than usual due to good financial return, and New Yorkers are staying put longer due to high moving costs, Lee said.

“The good news is, inventory is rising across New York City that can open up more opportunities for renters,” Lee said. “That said, the competition will remain in the market just because of the historical shortage of housing in New York City.”

New York’s housing inventory has been playing catch up since 2008. Residential construction dropped steeply during the Great Recession, and from 2010 to 2022, employment opportunities in the city jumped by 23%, but housing supply has only increased by 8%, according to a report by the city comptroller.

The prolonged supply shortage cratered New York City’s rental vacancy rate to 1.4% in 2023 — the lowest in 50 years.

“The population is always growing. New York City also saw a tremendous amount of creation of new jobs since the global financial crisis in 2008. But the housing supply really never caught up with that,” Lee said.

New York City needs around 40,000 more rental units for supply to return to pre-pandemic levels — more than that to create a comprehensive balanced market.

Median asking rent in the city — including all five boroughs — hit $3,575 in February, according to listing platform StreetEasy.Median asking rent in the city — including all five boroughs — hit $3,575 in February, according to listing platform StreetEasy.

Median asking rent in the city — including all five boroughs — hit $3,575 in February, according to listing platform StreetEasy. (Alexander Spatari via Getty Images)

Another illustration of the city’s popularity: The average inquiries by listing — a measurement of renter demand — rose almost 70% in 2024 compared to 2019, according to StreetEasy.

“Returning to office has been really taking hold in the city,” Lee said. “The city has a robust [and] resilient economy that will continue to support the demand for rentals.”

From a listing agent’s perspective, the rental market is never slow. Bruni says great units get scooped up in a day, good units get taken in a couple of days, and anything remaining gets rented eventually.

He once rented out a two-bedroom apartment for $4,800 in an hour, site unseen. Within seconds of the rental listing going live, multiple people reached out. The spacious unit was situated in an excellent East Village location and had a private rooftop.

“Beyond the obvious stuff like the history, the beauty of the skylines and the buildings, the people, and the day to day experiences,” Bruni said, “what really makes New York worth the money is the opportunity.”

To get a share of that opportunity today? It will cost around $3,500 for a good one-bedroom apartment — “If you want a solid spot.”

Rebecca Chen is a reporter for Yahoo Finance and previously worked as an investment tax certified public accountant (CPA).

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