Photo: Robert Clark
Unless you’re lucky enough to be bringing in an six-figure salary, more than half of New York City’s neighborhoods are unaffordable to median salary earners.
Based on the well-established 40-30 rule — housing costs should be no more than 30 percent of income, or a household’s yearly income should be 40-times the monthly rent — New Yorkers on average would have to earn well over $140,000 per year to afford the typical two-bedroom apartment, according to the results of a new study published yesterday by the listing site RentHop.
As of June 2018, the median rent for a typical two-bedroom New York City apartment is $3,650 — requiring an annual household income of $146,000, based on the 40-30 rule. The median income in New York City is currently just shy of $59,000.
In other words, New Yorkers would need to earn nearly 2.5 times the median income to afford the median rent on a two-bedroom apartment. Another way to look at it is that the average person would have to shell out well over half of their pre-tax income on housing costs alone.
“This puts the median two-bedroom far out of reach, since spending over 70 percent of your pre-tax income on rent is unsustainable if not impossible,” writes RentHop in the study.
RentHop determined that some 52 percent of neighborhoods city-wide had median two-bedroom rents that exceeded half the median household income.
The most unaffordable areas were all unsurprisingly located in Manhattan — Lincoln Square, Tribeca and FiDi, all of whom had median asking rents above $4,600 and would require an annual income of at least $184,000 to pass the 40-times rent rule.
However, from an income unaffordability standpoint, East Harlem, the Lower East Side and Bedford-Stuyvesant, Brooklyn topped the list. The median two-bedroom rent in these popular neighborhoods require over 95 percent of the annual household income in these areas, and easily fail the 40-times rent rule.
But for those New Yorkers who find themselves priced out, all is not lost. RentHop offers some helpful suggestions on securing the quintessential New York City pad without breaking the bank.
“If you have vast savings or a guarantor whom makes 80 times the rent, a landlord is likely to let you slide without meeting the income requirements. It’s also not unheard of for a landlord to request last month’s rent in addition to the first month and security deposit for those with below average credit and income,” RentHop advises.
Click here to read the entire study.