Study Says New York Has Costliest Rents in the Nation

Renters have more trouble finding a home they can afford in New York State than anywhere else in the nation, according to a detailed study of all 50 states released May 30 by the National Low-Income Housing Coalition. The report, entitled Out of Reach: Can America Pay the Rent?, shows that rents throughout New York are too high for low and moderate-income people to afford.Roughly half of all New Yorkers, or about 3.34 million households, are renters. The findings of Out of Reach show that over three in five of these households, more than anywhere else in the country, are paying more than 30 percent of their income for housing — the time-tested and widely accepted standard for determining its affordability. This standard is often a much higher proportion than most higher and middle-income households pay.

In New York, this problem is not limited to poor renters. Half of all renter households need at least a two-bedroom unit, based on the size of their families. The “fair-market rent” for a two-bedroom unit, calculated at $881 by the federal Department of Housing and Urban Development, is too much for the budget of 62 percent of those renter households. In other words, decent two-bedroom, non-luxury apartments in New York State are not affordable for over 2 million households. For those with the lowest incomes, Census Bureau data show that three-fourths can’t afford their housing, and the vast majority pay rents that exceed half of their household incomes.

Even the fair-market rent for a one-bedroom unit is beyond the reach of 52 percent of all the renter households in the state. About 1.7 million New York households cannot even afford a modest one-bedroom apartment. New York renters typically respond to these cost pressures by spending more than half of their incomes for rent; crowding into units that are too small; and accepting rentals with inadequate plumbing, heating, and kitchen facilities.

Indeed, the 1990 census found 618,424 renter households in New York paying over half of their income for housing. Of these, approximately, two-thirds had incomes at or below 30 percent of the state’s median household income. With stagnating incomes and rapidly rising rental costs, their number has surely grown since then.

New York public-assistance recipients face a serious risk of homelessness because housing costs are so far out of their reach. Typically, these households spend anywhere from 66 to 100 percent of their cash income to pay rent, according to state Department of Social Services data. The maximum public-assistance grant is $577 per month for a household of three. That is over $300 less than the fair-market rent for a modest two-bedroom apartment.

Compared with other states, New York has the fifth-largest gap between what public assistance gives people and the actual cost of housing, as measured by the fair-market rent; New Jersey has the largest. But New York could have stripped the title from New Jersey if the state Legislature had approved Governor Pataki’s proposal to cut public-assistance benefits to match the Garden State’s. New York then would have joined the company of Alabama, Arkansas, Louisiana, Mississippi, South Carolina, Tennessee, Texas, and Virginia — the states where public-assistance benefits equal less than half the fair-market rent.

But having a full-time year-round job does not ensure enough income to rent the housing available in New York either. According to HUD figures, a full-time worker would need to earn $16.94 per hour to afford the two-bedroom fair-market rent. This figure ranges from $8.90 per hour in lower-cost areas to $19.50 per hour on Long Island, where housing costs are as high as anywhere else in the country. On this score, New York ranks second-worst in the nation, following Hawaii, where the “housing wage” is $18.71 per hour. However, the median income among Hawaiian renters is nearly 30 percent higher (by about $8,000 per year) than in New York.

The report also takes a close look at the local housing picture for New Yorkers, from Long Island to Buffalo and Jamestown to Glens Falls. In every New York community, the low income of renter households, when combined with the high cost of rental housing, produces serious affordability problems, particularly for those who are poor. In all areas of the state, workers need incomes from two to four times the current minimum wage just to afford the rent.

Out of Reach uses these and other numbers to paint a detailed picture of the conditions that people with lower incomes face in New York State. The fair-market-rent figures are based on those determined by HUD for the Section 8 rental-assistance program; they are calculated at the 40th percentile of actual rents being charged for apartments in each community; 40 percent of rents fall below it and 60 percent are above it. The study estimated affordability based on the 30 percent of income standard, which is used in federal housing-subsidy programs. Income figures came from the U.S. Bureau of the Census.

Housing experts believe that proposed policy reforms and budget cuts in Albany and Washington could worsen the affordability crisis New York. Specifically, they warn that New York renters could be hurt by benefit cutbacks and time limits for public-assistance recipients; overhauls to federal public-housing and assisted-housing programs which would increase rents and eliminate important tenant protections; proposals to eliminate rent stabilization and rent control; and elimination of federal regulations targeting housing resources to those most in need.

These measures would serve to further widen the gap between the rents that the lowest-income New Yorkers can afford — from $150 to $220 per month — and the cost of decent rental housing, which ranges from $474 per month in the Utica area to more than twice that amount in Nassau, Suffolk, and Westchester counties.