More than half of New Yorkers are rent burdened and a new report from real estate listing site StreetEasy has made it all the more clear as to why. In a new report on the state of rent affordability in New York, the website takes a look at the progression of rent prices and wages from 2010 to 2017 and finds that rent has been increasing twice as fast as wages.
According to the report, rents have risen at their slowest pace since the end of the recession in 2010 over the last year, but haven’t slowed down enough to lower the city’s high rank as one of the country’s most expensive places to live. Asking rents have increased 33 percent on average from December 2009 through June 2017, an annual pace of 3.9 percent per year, while the median wage increase was just 1.8 percent annually during the same time frame.
What’s worse, StreetEasy found that rent increases haven’t risen equally across the various income brackets or rent price points. For instance, apartments priced at the bottom fifth tier of the market have spiked 4.9 percent annually since 2010 while homes in the top fifth tier of the market appreciated annually by three percent, on average. In essence, the lowest priced apartments have seen their rents increase the most.
With that, New York City’s lowest wage earners have seen their paychecks increase the least since 2010, yet wages for the city’s highest earners have grown the greatest. The combination of steep rent increases paired with minimal wage gains for low-income New Yorkers have forced many to spend an unreasonable amount of their income on rent.
“New York City residents who are earning the least amount of money are experiencing the greatest competition for housing and the steepest rent increases,” said StreetEasy Senior Economist Grant Long. “As New Yorkers—particularly the lowest earners—are forced to dedicate more of their monthly income toward rent, it becomes extremely difficult to save for necessities like healthcare and education, or a down payment on a home.”
The report acknowledges Mayor Bill de Blasio’s initiative to create and preserve 200,000 affordable units by 2024 as well as the tax incentives given to developers of pricey rental projects who set aside some units as affordable housing. However, it also highlights that these measures alone are not enough.
In order to bridge the gap, low-income New Yorkers need programs that will help them qualify for better paying jobs and provide more access to education for low-earning individuals and families that cannot afford tuition on their own. Only then will the playing field start to level out and allow struggling New Yorkers to be in a position to better keep up with the ever-increasing rent prices.
- The Widening Gap: Rents and Wages in New York City [StreetEasy]
- More than half of New Yorkers are rent burdened: study [Curbed]
- De Blasio says NYC hits ‘record pace’ for city’s affordable housing goals [Curbed]
- Behind New York’s affordable housing crisis [Curbed]
- All coverage of affordable housing in NYC [Curbed]