Can You Afford to Live in NYC?
- Aug 21, 2017
Is NYC going through an affordable housing crisis? To get a better understanding of the city’s rental market, RentHop compared median rents for a two-bedroom apartment in various parts of the city to the most recent median income data available at the neighborhood level. It turns out that just nine out of the 139 neighborhoods included in the study had median asking rents that could be afforded with 35 percent of the neighborhood’s median income. RentHop added an additional 5 percent to the recommended affordability of 30 percent to make room for the income growth that has taken place since the Census data was released.
The map above shows the median asking rent of two-bedroom apartments in neighborhood tabulation areas (NTAs) across New York City and how that relates to the income of those neighborhoods. Darker shades of red indicate lower affordability, while the few green areas indicate that median asking rents are within reach for the neighborhood’s median household income.
Median asking rents are not necessarily what people are actually paying. Neighborhood median rent means that half of apartments rent for less than this amount and half are above. RentHop didn’t have sufficient data for the neighborhoods that are grayed out.
The 40x Rule
As you probably already know, you should not spend more than 30 percent of your income on rent. This means that your household’s yearly income should be 40 times the monthly rent to afford an apartment and many landlords won’t accept anyone who doesn’t.
For NYC as a whole, the median two-bedroom rent was $3,500 for the quarter ending June 30, 2017, which would require a household income of $140,000 to secure and comfortably afford. The median income for the city stands at $55,752 according to the most recent census data, putting the median two-bedroom far out of reach, at 75.3 percent.
There are exceptions to the rule: If you have vast savings or a guarantor who makes 80 times the rent, a landlord is likely to let you slide without meeting the income requirements. It’s also not unheard of for a landlord to request last month’s rent in addition to the first month and security deposit for those with below average credit/income. RentHop’s “how much can I afford” guide can give you a little more insight on these rules and some ways to overcome them.
Long Island Tops NYC’s List of Least Affordable Neighborhoods
The median rent for a two-bedroom in the neighborhood tabulation area of Queensbridge-Ravenswood-Long Island City is $3,300, while the median household income is just $28,378. This means that the median rent here accounts for a whopping 139.5 percent of income. As the post-recession rental boom continues to change the face of the area, rents are expected to soar higher, putting new apartments far out of reach of the current households. Long Island City also topped the nation’s list of new construction between 2010 and 2016, with a stunning 12,533 new apartments in 41 apartment buildings, more than any other neighborhood in the U.S.
In a close second was Williamsburg, RentHop found, not referring to the hipster haven that’s colloquially called Williamsburg, which the city still calls ‘North Side-South Side,’ but the area a bit south, known for being home to much of the city’s Hasidic population. Here, the $2,499 two-bedroom median rent would require 139.5 percent of the $21,502 median household income to be spent on rent.
Lower East Side ranks as the neighborhood with the third largest income-housing cost gap in New York City. The median household would need to spend 134 percent of the $31,273 neighborhood income for two-bedroom asking rent of $3,495. LES is known for its night life and rough-and-tumble past, but the wealth gap and expensive apartments are the true story here, the study shows.
Mott Haven-Port Morris in the Bronx (130 percent of area income needed for the $2,200 two-bedroom rent), and East Harlem North (115 percent) round out the top 5 least affordable, while many areas of the Bronx make the top 10. The high poverty rate in the Bronx (27.9 percent of households in poverty) is certainly correlated.
Two-Bedroom Median Asking Rents
The interactive table below also shows the percent of income spent and income required in all neighborhoods for which RentHop had sufficient data. You can sort by price, alphabetically, or (un)affordability by clicking the top of the column.
NYC’s Most Affordable Neighborhoods
Upper East Side-Carnegie Hill, which boasts the highest median income in the city, topped RentHop’s list of affordable neighborhoods. Just 27.5 percent of the neighborhood’s $155,213 income would be needed to rent a median two-bedroom for $3,555.
Great Kills of Staten Island was a close second, being one of just a handful where the median income of $88,868 could comfortably afford the median rent at $2,050. Residents here would spend just 27.7 percent of the median income on rent. Whitestone, Queens, where rents accounts for 29.1 percent of income rounds out the top three. New Dorp Staten Island and a handful of neighborhoods in Queens make the short list of neighborhoods where rent is affordable to those earning a median income.