(Bloomberg)—It’s getting harder and harder to find an affordable apartment in New York City.
A city resident needs to make a salary of $110,000 to afford the median asking rent of $2,750 for available apartments, meaning putting no more than 30% of one’s gross income toward housing, according to a recent report by the New York City Department of Housing Preservation and Development. Roughly 23% of full-time workers in New York had six-figure salaries as of 2020.
Those numbers likely downplay the problem. The city’s report used the median asking rent for vacant and available units in 2021 and prices have been surging in recent months, with the vacancy rate stubbornly low.
The median rent in Manhattan soared to an eye-popping $4,000 for new leases on market-rate apartments in May, a 25% year-over-year increase. In addition, there’s a hike coming for residents of New York’s roughly 1 million rent-stabilized apartments.
Although many workers have gotten raises amid the tight pandemic labor market, rent prices are outstripping wage gains. And with a shortage of places to live, the rental market continues to surge as more workers come back to the office or return to city life after leaving during the pandemic.
“It’s an incredibly tight rental market,” said Matthew Murphy, the executive director of the NYU Furman Center, which researches housing issues. “The inventory and supply has not kept up with intense demand.”
The affordability crisis in the rental market has been building for decades, but is reaching a fever pitch as New Yorkers also feel the squeeze of inflation driving up the costs of everyday bills ranging from utilities to groceries to gas.
Housing advocates are particularly concerned by the increase for rent stabilized units. The city’s report found residents of those apartments had a median household income of $47,000 in 2020, and the extra money due each month could strain family budgets.
“If these rent prices continue to climb, over time we’re going to see a rise in both evictions and homelessness,” said Oksana Miranova, a housing policy analyst with Community Service Society.
To contact the authors of this story: Paulina Cachero in New York at [email protected],
Ella Ceron in New York at [email protected]
© 2022 Bloomberg L.P.