NEW YORK CITY—According to a new study by NYU and Capital One on rent affordability trends from 2000 to 2012, the rent really is too damn high. More than one million households in New York City are “rent-burdened”—meaning they are paying 30% or more of household income on rent, and nearly 600,000 of those households are severely rent-burdened, or paying more than 50% of their income on rent—according to the newly released “NYU Furman Center/Capital One Affordable Rental Housing Landscape.”
Since 2000, the percentage of renters paying large shares of their income on rents has grown. While median rent in New York City rose by 11% from 2005 to 2012, median household income of renters rose only 2%. By 2012, a majority of renter households were rent-burdened, and nearly a third of them were severely rent-burdened.
“The lack of affordable housing is a complex issue that is driven by multiple factors, including stagnant incomes, increasing demand for rental housing, and slow growth in the supply of affordable rental housing,” says Max Weselcouch, director of the NYU Furman Center's Moelis Institute for Affordable Housing Policy.
According to commonly accepted housing guidelines, “affordable” rent should not exceed 30% of a household's income. This means that a very low-income three-person household (making $37,350 a year or less in 2012 according to U.S. Department of Housing and Urban Development guidelines) should pay no more than $934 a month in rent and utilities to avoid being rent burdened. However, only 16 percent of recently available units in 2012 rented for less than $934 a month. In 2000, there was approximately one household under the very low-income threshold for every one unit of affordable housing. By 2012, there were three households under the very low-income threshold for every two rental units affordable to them.
“We know there is a great demand for, but short supply of, affordable housing. Essential members of our community, including teachers, police officers, nurses and firefighters, continue to be priced out of the city,” says Laura Bailey, managing VP, community development finance, Capital One, an affordable housing lender. “That's why we continue to work with local housing developers to help expand access to quality, safe, affordable rental housing for more New Yorkers.
It's worth noting that, over the course of the study, rents rose in four out of five boroughs. Manhattan experienced the greatest increase (19%) and Staten Island was the only borough to see rents fall (-3%). The median rent in Queens rose 8%; the Bronx, 10%; and Brooklyn, 12%. The increasing rents in Manhattan outpaced the city-wide increase in rent, rising nearly twice as fast as in Queens, the Bronx and Brooklyn.
From 2007-2012, the number of rent-burdened households in New York City increased by 125,000. This includes almost 90,000 households who paid half or more of their monthly income on rent in 2012. And the increase in the share of residents who are rent-burdened has been driven almost entirely by moderate- and middle-income households (among three-person households in 2012, those who earned more than $59,800 and up to $149,400 per year).
Equally troubling, of the rental housing units affordable to a very low-income three-person household in 2012, almost 30% of them were occupied by households with higher incomes.
The complete Affordable Rental Housing Landscape and additional information are available online here and here.
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
