New York City is home to the second priciest rental real estate market in the country, and though rent prices have been on the decline lately, the cost of rent is still too high. A new study from SmartAsset analyzed data from RentCafe for two-bedroom apartments in 25 of the largest American cities to see where you need the most income to afford rent, and of course, New York City requires one of the biggest annual incomes, second only to San Francisco (h/t Moneyish).
According to the U.S. Department of Housing and Urban Development, a household that spends more than 30 percent of its income is considered “cost-burdened.” In order to find the income needed to pay rent in 25 of the country’s largest cities without being cost-burdened, SmartAsset estimated the amount of income a renter would need to afford the average two-bedroom apartment while paying no more than 28 percent of their income. This number was determined by dividing the average annual cost of a two-bedroom apartment by 0.28 and the resulting figure was the annual income required for rent costs to equal 28 percent of a person’s income.
Per their findings, the average cost of a two-bedroom in New York is around $3,789. This means that New Yorkers would need to earn a minimum of $162,386 in order to spend no more than 28 percent of their annual income on rent. If you head to Brooklyn or Queens, the average rent prices of two-bedrooms are slightly less at $3,200 and $2,660, respectively, however you would still need a substantial income to be able to afford a two-bedroom in these boroughs.
With countless developments taking shape all over the city at any given point in time, it’s important to note that new residential buildings are responsible, in part, for pushing the average rent prices higher. However, rent prices in New York have been outpacing income growth since the 1960s, and one thing that the study from SmartAsset makes clear is that for many, rent-burden is inevitable for most people who want to live comfortably in New York.