MANHATTAN — New York City renters are likely to spend nearly two-thirds of their income on rent this year, according to a report released Thursday from real estate search engine StreetEasy.
Typical renters are likely to devote 65 percent of their income on rent — up from nearly 60 percent in 2015, the report found.
Economists say renters should not pay more than one-third of their income in rent. Paying more than that is considered being “rent burdened.” Paying more than half of your income is considered “severely rent burdened.”
In a city as expensive as New York, being rent burdened is the norm, many housing advocates lament. And many landlords won’t accept applicants unless their annual salary is at least 40 times the monthly rent — which comes out to about 30 percent of their income.
Brooklyn remains the most rent-burdened borough, with residents forecast to spend about 65.4 percent of their income in rent this year, according to StreetEasy.
Using Census data and the employment cost index, StreetEasy estimates the median income in Brooklyn will be roughly $49,000 this year and it predicts the median rent will hit $2,689 a month. A household would need to earn $107,560 a year for that to be affordable.
Because of rising real estate costs in Queens, renters there are expected to see the biggest jump in rent burden, with residents predicted to pay nearly 52 percent of their income in rent this year, compared to paying about 44 percent last year, according to StreetEasy.
Rents in Queens are expected to hit a $2,500 per month median while income is expected to hit a median of around $58,225. But a household would need to earn $100,000 a year to make that rent affordable.
Mayor Bill de Blasio's administration is hopeful the recently passed zoning changes — Zoning for Quality and Affordability and Mandatory Inclusionary Housing — will help it achieve its goal of creating 80,000 new units of affordable housing over the next 10 years.
“There’s no issue that people care more about in this city,” de Blasio said last month during an interview on AM 710. “People come up to me wherever I am, any borough, and they say, ‘Can I still afford to live in my neighborhood? Can I still afford to live in this city? How am I going to avoid being forced out of here?’ Everywhere I go, I hear it particularly from senior citizens, many of whom are on a fixed income.”
Though the city is making a concerted effort at building affordable housing, the issue of supply is only “half the battle,” said StreetEasy data scientist Alan Lightfeldt.
“No other factor is more fundamental to the city’s growing rent burden than lagging income growth,” he said. “Until income growth catches up with rent growth, the rent affordability problem will loom large on New York households.”
Because of income growth, Manhattan is the only borough that is expected to see a smaller rent burden — ever-so-slightly — this year. The borough’s income is expected to grow 1 percent while its median rent is projected to rise a mere 0.2 percent, according to StreetEasy. Because of that the rent-to-income ratio is expected to decline slightly to 49.1 percent from 49.5 percent.
While Bronx residents are forecast to pay nearly 54 percent of their income in rent, Staten Island is the only borough considered affordable, with renters paying nearly 28 percent of their income on housing.
Tenants in some neighborhoods will be especially burdened.
In Manhattanville, for example, where Columbia University is constructing its expanded campus, the median rent-to-income is expected to reach nearly 120 percent since the median rent will be far greater than the typical household’s total annual income. The rent is expected to reach $2,284 a month, while the area’s median household income for the year is expected to amount to roughly $22,941.
Manhattan's Chinatown, Mott Haven in the South Bronx and areas in East Brooklyn — where incomes are not increasing nearly as quickly as rent prices — are expected to see similar trends, according to StreetEasy.
