While the rent may too damn high, it seems renters in New York City have grown more resilient.
According to the US Census Bureau’s latest American Community Survey, the household income of New York City renters outpaced median gross rent between 2014 and 2015. During the period, the median renter household income grew 4.8 percent to $43,261, which is just below the record of $43,563 set in 2008. When compared to the previous survey period, the year-on-year increase in median renter income was the highest over the past decade.
Meanwhile, the growth in median gross rent in New York City was more moderate, increasing by just 3.1 percent from $1,278 to $1,317.
The jump in renter income in New York City was part of a nationwide trend. According to the study, the median household income of renters grew in 21 of the 25 most populous metropolitan areas in the country.
However, income growth was not limited to renters. The study found that the median income for both renters and buyers in New York City grew by 5.1 percent to $55,752.
In spite of the growth in income, the economics of renting in New York is more equal for some than for others.
The study, which measured income inequality through its Gini index, found that New York was one of five states that had higher income inequality than the US average. The other states that scored higher than the US rate were California, Connecticut, Florida and Louisiana. The District of Columbia also posted figures higher than the US average.
The gap between renter income and median rent may grow wider. According to Douglas Elliman’s August market report, rental rates are going down as the luxury end of the market gets weaker.
The median rent in Manhattan was at $3,399, one dollar less than the figure from the previous year. Meanwhile, the median rent in Brooklyn dropped 1.9 percent to $2,895.
In an interview with Real Estate Weekly, Jonathan Miller, the head of appraisal firm Miller Samuel, said that he expects the decline to persist over the coming months.
“I think the general trend is going to remain in place for a while. Because we’re seeing weakness in the upper end of the market and that’s where the new supply is coming. The rental development that’s being added to the housing stock is skewed towards the upper half of the rental market,” Miller told Real Estate Weekly.
“The rent is sideways because, if you look under the hood, the upper end of the market showed flat prices and the low rent market showed really strong growth.ˮ