Photo: Robert Clark
Manhattan’s Battery Park City has topped the list of most expensive zip codes for US renters for the second year in a row, according to a recent study by the listing site RentCafe.
“More surprising than the density of NY and CA markets towards the top of the list, however, was the fact that rents have decreased in only 9 Manhattan ZIP codes — and in most of them by 1 percent or less — and that none of the very expensive CA markets have seen negative rent growth since last year,” Balazs Szekely, the author of the study, tells Livabl.
Of the 50 zip codes with the highest average rent, 26 were located in Manhattan, 13 were in the San Francisco Bay Area and five were in Southern California.
With an average rent of $5,657, Battery Park (10282) took top honors. Lower Manhattan’s 10013 zip code — which emcompasses the pricey Tribeca and SoHo markets — came in second place, with an average rent of $5,226. The area climbed six positions since last year as rents soared almost 11 per cent year-over-year.
“Prices reach the highest levels in the most sought-after locations, where demand is always strong due to the vigorous local economy and an abundance of well-paying jobs. It’s no wonder then, that Manhattan and Silicon Valley zip codes dominate the top of the list,” says Szekely.
The 90024 Los Angeles zip code climbed 61 positions from last year to round out the top three, with an average rent of $4,884 — up 3.2 per cent year-over-year.
Six of the remaining seven spots in the top 10 were located in Manhattan. And, with an average rent of $4666, San Francisco, California climbed 3 spots from last year to take 6th place in the top 10.
Only one of the top 50 most expensive zip codes saw rents decline by more than 2 percent year-over-year — Boston, Massachusetts’ 02111 zip code, where rents fell 2.4 percent.
Rents increased by 2 per cent or more in 29 of the top 50 zip codes, and by 10 per cent or more in Manhattan (10013) and Sunnyvale, California (94085).
And with rents hitting record highs — the national average rent hit $1,409 in July — are some renters reaching their affordability limit?
“We do know that the housing industry considers 30 percent of the household income as the upper limit to housing costs, anything above that being rent burden-territory – needless to say, 30 percent to most renters in Manhattan, San Francisco and Los Angeles sounds like something out of a utopian illusion,” says Szekely.
Still, Szekely concedes that high rents and high demand signal that people are willing to bear these “unpleasant consequences” in exchange for the opportunities found in New York City and the Bay Area.
But sky-high rents have pushed some renters to do the unthinkable — move.
“A phenomenon called affordable migration has been strengthening in recent years, and renters have resorted to longer commutes or left these expensive cities altogether in hopes of a more affordable lifestyle in Texas, Arizona or other more reasonably-priced markets,” says Szekely.
For those renters priced out of Los Angeles and Manhattan, RentCafe points out that there are plenty of urban areas in Wichita, Kansas and Memphis, Tennessee that offer rents below $600 per month.
Click here to read the entire study.