New Yorkers are spending more and more of their paychecks on rent, with the city ranking far above most others in the U.S. when it comes to rent-to-income ratios, according to a new report.
Swelling rents, stagnant income growth and a limited number of rental units mean those living in the city will spend nearly 60 percent of their annual income on rent this year, a report by real estate website StreetEasy.com has found.
The city’s median asking rent is expected to reach $2,700 this year, but incomes can’t keep up — rent prices grew at almost twice the pace of income between 2000 and 2013, according to census data.
Rent affordability is often neighborhood specific, so StreetEasy.com analyzed affordability across the city’s five boroughs by measuring each neighborhood’s rent-to-income ratio, or how much of a household’s monthly income in that neighborhood goes to rent.
The lower an area’s rent-to-income ratio, the more affordable it's considered. So if a neighborhood’s rent-to-income ratio is 15 percent, that means people living there are spending 15 percent of their income on rent and the rest on living and savings. A rent-to-income ratio of 30 percent or lower is considered “affordable,” according to the report.
The rent load is worst in Brooklyn, where new renters can expect to spend 60 percent of their income on rent this year. The Bronx isn’t far behind at 52 percent, followed by Manhattan (48.8 percent), Queens (41.4 percent) and Staten Island (30.1 percent). StreetEasy created an interactive map that shows each neighborhood's rent-to-income ratio (below).
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NYC has one of the most expensive rental markets in the country, and it’s no wonder. People flock to the city for its cultural amenities — but the rental vacancy is just 3.45 percent, meaning potential tenants have to fight each other for a place to live. This pushes up rents even higher, as landlords raise their asking prices.
The report found that the least affordable neighborhoods in the city are Manhattanville, with a rent-to-income ratio of 120.9 percent, Little Italy (109.7 percent) and Chinatown (107.2 percent).
Those findings don’t tell the whole story though, as high rents don’t necessarily equate to a high rent-to-income ratio. The study found that the highest rent-to-income ratios were often in gentrified neighborhoods, such as Harlem, Williamsburg and Bushwick, where the most cash-strapped residents face skyrocketing rental prices.
