New York

New York Metro Sees High-Rent Homes Soar, Low-Rent Disappear

New York Metro Sees High-Rent Homes Soar, Low-Rent Disappear

You could have probably guessed it, but the New York Metro area is rapidly losing affordable housing. A new study from the Harvard Joint Center For Housing Studies (JCHS) looked at a number of affordability measures, including rental prices. What they found is more affordable rentals are quickly declining, and the luxury segment is booming.

New York Metro Area

Just so we’re all on the same page, we’re looking at the New York Metro Area, as designated by the US Census Bureau. The area is sometimes referred to as the New York-Newark-Jersey City, NY-NJ-PA – catchy, I know. All dollar numbers in the study have also been adjusted to 2015 dollars, so you can put your inflation calculators away. Got it? Onward!

Places With Rents Below $1,200 Are Quickly Disappearing

More affordable rentals are quickly disappearing, especially if they were under the $1,200/month price point. Calculations made from US Census data showed there were 1,418,630 rentals in this price point, a 16.8% decline from 2005. The affordable rental struggle is real in the New York Metro area.

Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

The biggest decline was observed in the price point of $600 to $799 per month. This category counted 195,015 units in 2015, a 33.33% decline from 2005. The $800 to $900 price range showed the second largest decline, with 341,163 – a 27.08% decline from 2005. I know what you’re thinking, prices are going up! A surprising data point was the under $400/month range, that counted 256,635 units, only a 6.06% decline. This means more people pay less than $400/month than $600 to $799. Middle class renters are the biggest loser here.

Source: JCHS tabulations of US Census Bureau, American Community Survey 1-Year Estimates.

Places With Rents Above $1,200 are Booming

Not so surprising is the number of rentals above $1,200 is booming. Census data calculations showed that 1,967,306 units fell in this category, a 40.69% increase from 2005. The fastest growing segment was above $2,400, 338,413 units were counted. This represents a massive 77.75% growth for the segment. Second was the $2,200 to $2,399 category, where 101,270 units showed growth of 70.32%.

Great that prices are finding healthy enough incomes that high end rental units are being absorbed. However, the median household income for the region is only US$68,740. This likely means there’s a greater gap of opportunity for lower income households, that likely can’t afford to stay in the metro area.

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