Rents in New York City are growing seven times faster than salaries, making it difficult for low- and middle-income households to benefit from affordable housing, according to a new market research obtained by The Gothamist.
Researchers from Zillow and StreetEasy, two websites that offer rentals, discovered that the Big Apple had the widest disparity between average pay growth and median rent increases of any metropolitan area in the nation.
Based on an examination of U.S. Bureau of Labor statistics and Zillow rental data, average salaries in New York City climbed by around 1.2% last year, while median rents jumped by 8.6%. According to recent statistics from the National Association of Realtors, median house selling prices in the metropolitan area rose by more than 18% in the first quarter of the year.
“The report really underscores the need for action,” explained Kenny Lee, an economist with StreetEasy. “The really historical shortage of the supply of affordable homes in New York City has made it challenging for renters to find an affordable place to live in the city.”
Last month, lawmakers in the state of New York enacted laws that would enable renters to oppose hikes above 8.5% in most circumstances, so preventing many tenants from facing abrupt increases in rent. However, there are a number of exceptions and murky areas under the new “good cause” rule, which gets its name from the need that landlords give a legitimate basis for terminating leases or raising rents. These issues have not yet been settled in court.
The nonprofit Community Service Society of New York recently conducted a study on rents and incomes, and found that while the city is trying to subsidize more housing for low- and middle-class renters, the affordability metrics used to determine rents in most of those units do not match the income levels of most residents.
Nonetheless, during the last five years, the difference between median rent and salary growth in New York City has shrunk compared to those in other regions of the country, particularly large cities in Florida. The data shows that Tampa’s rents jumped by 50%, which is more than three times the pace at which wages increased. Miami had a 53% increase in rent, which was more than twice as fast as the Vice City’s salary growth.
