Living in New York City comes with its costs, and for renters one new report has found that over half of their incomes will go toward paying for the place they call home.
StreetEasy released its annual New York City Rent Affordability Report on Thursday, which found that this year alone, a typical household in the city is expected to spend close to two-thirds of its annual income on market-rate rent.
New Yorkers are projected to use 65.2 percent of their income on rent in 2016 — a number up from 59.8 percent in 2015.
“With a rental vacancy rate below 3.5 percent, the supply of rental housing across the city is extremely low, which places upward pressure on prices and even more competition among renters,” said Alan Lightfeldt, StreetEasy data scientist. “There’s policy momentum in place here, but addressing the supply side is only half the battle. No other factor is more fundamental to the city’s growing rent burden than lagging income growth.”
Based on the report, renters in four of the five boroughs are expected to face a much larger rent burden this year than last year, and Brooklyn continues to hold on to the title of the least affordable borough.
New Yorkers living in Brooklyn are estimated to spend 65.4 percent of their income on rent, while renters in the Bronx are expected to use 54.1 percent.
In Queens this year, renters are anticipated to see the largest jump in rent burden when compard to the other boroughs, with a median rent-to-income ratio increase from 43.5 percent in 2015 to 51.6 percent in 2016.
The report also found that rent burden typically varies by neighborhood, with areas in East Brooklyn, upper Manhattan and the South Bronx dealing with the highest rent-to-income ratios. A neighborhood like Manhattanville has an estimated rent-to-income ratio of 119.5 percent in 2016 — showing median rent is much higher than a typical household’s total annual income.
Other areas such as Chinatown, Little Italy, Mott Haven and north New York also have a median ratio over 100 percent.
Manhattan renters will experience a smaller rent burden this year since the borough's predicted income growth of 1 percent is greater than the median rent growth of 0.2 percent. The median rent-to-income ratio in 2016 is expected to be 49.1 percent, down from 49.5 percent last year.
According to the report, Staten Island is considered to be the only affordable borough for renters, with an expected median rent-to-income ratio of 27.9 percent this year.
“Until income growth catches up with rent growth, the rent affordability problem will loom large on New York households,” Lightfeldt said.