Photo: Robert Clark
Even though annual rent growth over the last year in New York City has been at its slowest pace in recent years, many renters are still finding themselves priced out of the market.
Rents are rising twice as fast as wages, hitting the city’s low-income earners the hardest, according to a report released today by the listing site StreetEasy.
Asking rents went up by 33 percent city-wide from 2010 to 2017, or nearly 4 percent annually. Over the same period, median wages only increased 13 percent since 2010, or just under 2 percent annually.
Wage inequity is neither a new phenomenon or something confined to just New York City.
“But what surprised us was the extent to which it has exacerbated problems around rent affordability despite New York City’s strong economic growth and efforts to spur more housing construction,” Grant Long, senior economist for StreetEasy, tells BuzzBuzzNews.
The growth seen in asking rents also outpaced the growth in costs of other goods like food and beverages, medical care and education, according to StreetEasy. Nationally, inflation is up 1.5 percent from last year — less than half the annual growth seen in New York City rents.
Meantime, the consumer price index (excluding housing costs) rose 1.2 percent annually in the New York City metro area. The consumer price index measures the variation in prices typical consumers pay for retail goods and other items.
New York City residents earning the least also saw their rents rise the most, says StreetEasy.
Homes that had the lowest city-wide rents saw their rents go up nearly 5 percent annually, compared to 3 percent for the highest-priced rentals.
Low-income earners also saw their wages increase the least since 2010, while those earners in the top 20 percent of workers saw the highest increases in their pay, says StreetEasy.
“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,” Long says in a news release.
City officials need to enact policies that can curb the pace of rent growth, while helping city residents develop the skills required to succeed in the workplace so every New Yorker can “benefit from the growing economy equally,” Long adds.
The problem of affordability in New York City is a direct result of the city’s strong recovery from the financial crisis.
“The city’s vibrant economy has succeeded in attracting large numbers of workers, who have in turn increased the demand for homes in the city,” Long tells BuzzBuzzNews.
And with the pace of economic growth exceeding the pace of housing supply, rents have substantially gone up. Lagging wage growth has only added to the city’s affordability problem.
“Our study shows just how severe that burden is for New Yorkers with rents growing twice as fast as wages across New York City since 2010,” Long tells BuzzBuzzNews.
Click here to read the entire report.