NEW YORK (BLOOMBERG) -- Soaring rents and high upfront costs mean that fewer than 5% of New York City apartments were affordable for the average local worker last year.
New Yorkers earned on average just under $89,000 last year, meaning they could afford up to $2,216 per month on housing without spending more than 30% of their annual income, according to a new report by Zillow Group Inc.’s StreetEasy and tech:nyc. Factoring in average upfront costs, which includes the first month’s rent, a security deposit and broker fees that amounted to $10,454 last year, the average worker could only afford 4.4% of rentals on the market without breaching that affordability threshold, the report said.
In New York, as in much of the rest of the country, salaries haven’t kept up with increasing housing prices. Median asking rents jumped 8.6% to $3,475 last year, while average wages in the city climbed just 1.2%, the report said. The city’s housing shortage has also worsened, with a 380,047 deficit in homes outpacing metro areas in San Francisco, Chicago and Boston combined.
The city’s housing affordability crisis hit essential workers the most. Those in healthcare support, food preparation and transport services earned less than $70,000 last year, meaning they could only comfortably pay for 1% of New York apartments, the report said. Even tech workers, who earned an average $135,089, could only afford 35% of rentals on the market.
“Spending more on rent leaves a larger hole in renters’ budgets and makes it difficult to save for long-term goals, such as a down payment on a home,’’ according to the report. “However, many New Yorkers don’t have a choice.’’
— With assistance from Brian Chappatta