High Rents Squeezing Middle-Class Families in New York

New Yorkers looking for lower rents are finding little relief in the current marketCity Comptroller John Liu released a report last Wednesday stating that rising rents are increasingly putting pressure on middle-class families. The new report showed that half of all city households typically spend more than 30% of their income on rent alone, compared to 26% nationally. Rent becomes officially unaffordable when it goes over 30%, according to federal benchmarks. Middle-income apartment renters, defined as people earning between $35,000 and $75,000 annually, face the most pressure in Manhattan, where 45% pay rent that falls into the officially unaffordable bracket. This high rent is unfortunately not unique to Manhattan apartments however. Rents have also been creeping up in Staten Island and Queens, where 44% of the middle-class residents are shouldering unaffordable housing costs.

Currently, 30% of New Yorkers are devoting upwards of half their income to rent alone, according to the study. This is becoming enough to drive the middle-class from the city, Mr. Liu said. “Working families should not be forced to leave town or live in inferior housing,” he said. “We need to invest in affordable housing for middle-income renters so that our city is not only home to the very wealthy and the very wealthy and the very poor but also to the vast majority of New Yorkers who fall in between.” His characterization does fit in most cases, but a family renting an apartment on the Lower East Side will have a much different experience than one renting on the Upper East Side.

Renting in New York City is on the rise. Approximately 70% of New Yorkers rent their homes, compared with only 30% nationally. In addition, the vacancy rate of rental housing is only 3% in New York city and falls below 1% at peak times in the year. The national vacancy rate for rentals tops out at 10%. What of apartment residents living on either side of the middle-income bracket? Low-income and high-income families don’t face the same, disproportionate pressures that middle-income families do. Household earning less than $35,000 annually have the option of turning to affordable-housing programs. High-income households spend a similar percentage of their income on rent as the national average.

Is there any relief in sight? The comptroller’s study, titled “Rents Through the Roof”, doesn’t think so. In 2000, 23% of the city’s rental units were unaffordable to middle-income households, and that number jumped to 38% in 2010. In addition, New York City's rents are still rising and the vacancy rate is at an all time low.