Nobody will be surprised to hear that New York rents have increased dramatically since 1960. More interesting, however, is how quickly rent increases outpaced income in the timeframe between 1960 and 2013. ApartmentList released a study analyzing how rents and incomes have changed in urban areas across the country in the past five decades. In 1960, New York had a median rent of $568. By 2013, the median was $934—a 64 percent increase. Median household income was at $44,948 in 1960 and had increased to $53,013 in 2013—only an 18 percent increase. The difference between the two is a whopping 46 percent.
That growing rent-to-income discrepancy has led to 30 percent of New Yorkers across all incomes to be severely burdened by their rent by 2013. At the time of study, 22.7 percent of New Yorkers were moderately burdened, while 43.7 percent were not burdened. Unsurprisingly, of those making below $15,000 a year, 73.2 percent were severely burdened by rent.
This is a trend that ApartmentList found around the country. "We find that inflation-adjusted rents have risen by 64 percent, but real household incomes only increased by 19 percent," the data says. It got bad between 2000 and 2010, the only decade when household incomes fell, by a total of 9 percent. At the same time, rents rose 18 percent. And as a result, "the share of cost-burdened renters nationwide more than doubled, from 24 percent in 1960 to 49 percent in 2014." ApartmentList found that things have improved since, with incomes flattening between 2010 and 2014, but there’s still a big gap between rent and income.
Nearly every city has experienced higher rent growth than income growth. New York falls into the category of "expensive costal cities," where income, from LA to NYC to DC to Boston, could simply not keep pace with the rent. As for solutions to the problem, ApartmentList suggests that "cities on the coast could do more to increase rental supply, while parts of the South and Midwest need stronger wage growth."
- How Have Rents Changed Since 1960? [ApartmentList]