Making rent is much more crushing in some Manhattan neighborhoods than others, according to a new analysis from rental listings platform Rentlogic, which looked at the spread between an area’s average rents and incomes.
When it comes to determining affordability, the general rule of thumb is that tenants should pay no more than 30 percent of their income on rent. A household paying more than a third of its income on rent is considered “rent burdened,” or “severely rent burdened” if paying more than 50 percent of income on rent.
So, while Lower East Side rents were not among the highest in Manhattan, tenants in the area are perhaps the most rent burdened because their household incomes are among the lowest, according to the study.
Average asking rents were $3,379 a month, according to an October 2016 MNS monthly market report, while average household income was $5,097 a month, according to Census data posted on Point2homes.com.
Rentlogic — a platform that pulls open source data from various government agencies and assigns letter grades to buildings to help renters understand if a landlord has been behaving badly — compared the rent and income, finding that tenants in the Lower East Side could be paying about 66 percent of their income on rent.
“It's regarded as a place with lots of students, who like to be near the bars,” Rentlogic’s Yale Fox said of the Lower East Side.
It’s also a high-demand area that appeals to low-salaried people, but Fox noted tenants still likely have to meet the landlords’ income requirements. So, if they don’t have a yearly salary that’s 40 times the monthly rent, for instance, they’d need a guarantor earning 80 times the monthly rent. Because of this, Fox added, new renters tend to be from middle to upper-class backgrounds.
Unpacking trends behind changing demographics is one of the reasons Rentlogic made the map, he explained.
“It’s to highlight the driving cost of rentals and it's affect on society in the future years,” said Fox, a TED Fellow focused on income inequality and housing rights.
Other areas with high rent burdens included Harlem, where tenants on average could be spending 57 percent of their income on rent.
The third most rent burdened area is SoHo, where tenants could be paying about 46 percent of their income on rent.
“What it comes down to is that New York has very different neighborhoods with even more different histories. The history of SoHo is dramatically different than the history of the West Village,” Fox said, nodding to SoHo’s “long history” of artist housing.
“There are places on Crosby Street that are highly rent-stabilized artist housing and across the street is a $10,000/month floor-through loft,” Fox said.
On the other hand, neighborhoods like Battery Park City, the Upper East Side and the Financial District had relatively low rent burdens, according to the analysis because salaries in these areas were high relative to average rents.
So while SoHo sounds like a place where people in the fashion industry might live, which makes it another area perhaps with high-demand and low salaries — which increases the rent burden — Battery Park City likely houses a lot of Wall Street families with high incomes, Fox said.
Across the city, nearly 900,000 households — or roughly 42 percent of the city’s renters — were rent-burdened and half of these households were severely rent burdened, according to a 2015 report from the Citizen’s Budget Commission.
That translates into one in five households of renters across the city paying more than half their income in rent.