Copyright © 2017 · All Rights Reserved · Jerry Novack | Bluerock Real Estate
Posted on April 27, 2016
Nearly all markets undergone some sort of dynamic change in the past few years, though numbers hint at recovery. Whether describing the high-valued real estate of NYC or the peaking market of Boulder, Colorado, there have some shocking and exciting shifts –and not all of them good. In fact, New Yorkers are spending a bulk of their income on their rent.
If you’ve been on an NYC train within the last few months, you will have noticed the fun and interest-drawing spread liberally throughout train cars. Disturbed by the real estate application StreetEasy, these images playfully depict a home/apartment search formula. For instance, one poster says, ‘Location: West Village + Outdoor Space = +4 Roommates,’ while another says ‘Maybe Rats + Definitely Cockroaches + The other bugs with all the tiny legs + Under $1,500 = East Village find.’
These StreetEasy posters effectively capture the grim reality of New York City real estate for many individuals dwelling within the city, especially when you consider the cost of rent.
According to a study published by StreetEasy, NYC renters are expected to spend nearly two-thirds of their income on their rent 2016. Approximately 65.2 percent of NYC renters’ paychecks go directly to their landlord, that’s a 5.5 percent increase since last year.
Manhattanville, Chinatown, Little Italy, and Mott Haven now boast median rent costs that are higher than the typical household income, according to the report. These inclines aren’t exclusive to Manhattan either. Brooklyn renters will spend 3.7 percent more than they did last year, as they’re expected to spend 65.4 percent of their income on rent. The new rent to income ratios by the borough in 2016 are as follow: Queens (51.6 percent), the Bronx (54.1 percent), Brooklyn (65.4 percent) and Manhattan (49.1 percent). These percentages exceed the income guidelines suggested by financial experts in order to have a financially stable home. Staten Island alone has a healthy income ratio, standing at 27.9 percent. Up just 1.3 percent since last year.
The rent cost is a burden for many New Yorkers, and it threatens to alienate young and entrepreneurial talent who can not afford the region. Instead, these individuals may search for less expensive cities that offer affordability and a higher quality of living. Rent relative to income increased the greatest in Queens, increasing by 8.1 percentage points since last year’s 43.5 percent rent-to-income ratio. The Bronx, which is notably rent-burdened, only saw a .5 percent increase. Manhattan was the only borough that saw a ratio dip, dropping just .4 percent since last year. The reason for this isn’t decreasing rent, but slight increases in income.
Mayor Bill De Blasio is aware of the affordability crisis and is said to be doing all that he can to build housing and discuss housing capacity across the boroughs. Over the past two years, the City financed more than 40,000 affordable residents. They’ve made zoning changes, and they’ve created more housing for low-and-moderate income individuals, as well as senior citizens. The rent burden is fueled by the waning of income growth, which will ensure that affordability will be an ongoing issue for those living in the city.