The Growing Gap: New York City’s Housing Affordability Challenge

EXECUTIVE SUMMARY

For a century and a half New York City has been a national laboratory for innovative and expansive affordable housing policies – from the Tenement House Laws of the late 19th and early 20th century, to the development of the nation’s largest public housing system in the 1930s, to the sweeping community development efforts of the 1980s and beyond.

But just as New York’s housing environment has continually evolved, so has the depth and complexity of its affordable housing challenge – a challenge that today is marked by an evaporation of low-rent housing, record homelessness, an increasingly aged building stock, and rapid shifts in the city’s economic and demographic landscape.

The figures in this report, published by New York City Comptroller Scott M. Stringer, tell a sobering story—of stagnant incomes, rising rents, and a deepening affordability crunch, especially for the working poor and others at the lower end of the income spectrum. This fi nancial squeeze comes despite signifi cant housing investments during the 12 years of the Bloomberg mayoralty.

From 2000 to 2012, this report found:

• Median apartment rents in New York City rose by 75 percent, compared to 44 percent in the rest of the U.S. Over the same period, real incomes of New Yorkers declined as the nation struggled to emerge from two recessions.
• Housing affordability—as defi ned by rent-to-income ratios—decreased for renters in every income group during this period, with the harshest consequences for poor and working class New Yorkers earning less than $40,000 a year.
• There was a dramatic shift in the distribution of affordable apartments, with a loss of approximately 400,000 apartments renting for $1,000 or less. This shift helped to drive the infl ation-adjusted median rent from $839 in 2000 to $1,100 in 2012, a 31.1% increase. In some neighborhoods – among them Williamsburg, Greenpoint, Ft. Greene and Bushwick in Brooklyn, average real rents increased 50 percent or more over the 12-year period.
• The elderly and working poor are making up a growing portion of low-income households, with 40 percent of the increase tied to households in which the head is 60 years or older.
• In 2000, renters earning between $20,000 and $40,000 in infl ation-adjusted dollars were dedicating an average of 33 percent of their income to rental costs. Twelve years later that average jumped to 41 percent. Their housing circumstances became more precarious even though their labor force participation rates soared.

In the end, New York’s position among global cities will be defi ned in large part by its ability to maintain diverse neighborhoods, and to attract and retain talent from around the world. A comprehensive plan that provides safe, affordable housing at all levels of the economic spectrum is not just important to the city’s future, it is essential.