NYC Rent-Wage Gap Widest Since 2008

While President Biden’s social media team is busy tweeting photo ops in gas-guzzling Corvettes to brag about how great the economy is doing, Americans not living ivory towers are roasting in the flames of inflation, while stagnant wages fail to keep up.

To wit, the gap between rent and wage growth in New York City is the widest since the 2008 recession.

After adjusting for inflation, real wages were down by 9.1% year-over-year, while rents jumped 13.4% during the same period in August – a difference of 23%, according to StreetEasy, which notes that less than half – 48.2% – of NYC’s 4-million-person workforce earned enough to afford 10% of the apartments listed over the summer, unless they spent more than half their income on rent, the NY Post reports.

If there’s any good news, StreetEasy adds that asking rents are still continuing their rise, but at a slower rate. Over the last year-plus, rents have plummeted to record lows and gradually rose to record — and bank-busting — highs. The impacts of those changes have included tenants getting sweet COVID deals who later faced massive rent hikes upon renewal — and house hunters finding themselves in bidding wars to lock in a deal.

Among the city professionals hit hardest during this time: healthcare support workers, such as nurses’ aides and home health aides. Typical annual incomes in this field are just shy of $39,000, which StreetEasy says is hardly enough to afford a mere 2% of this summer’s inventory without having half of the earnings solely go toward the rent. -NY Post

In the third quarter, the median asking rent for studios and one-bedroom apartments was $3,000 according to the report – while 2 and 3 bedroom units are going for $3,800. StreetEasy suggests finding roomates – which could save over $13,000 per year.

That said, the tide may be turning. The report also notes that a greater share of rental listings (8.6% vs. 6.6% in July) are extending concessions – such as a free month of rent on a 12-month lease.

In June we reported that a shocking 23% of New Yorkers can afford median rent amid an “incredibly tight market,” after Bloomberg cited a New York City Department of Housing Preservation and Development report that found only 23% of full-time workers in the city can afford median rent. 

The city’s report used the median asking rent of $2.75k for vacant and available units in 2021, and 2020 salary data showed that only 23% of full-time workers in New York made over $100k.