The State of New York City Rent Affordability in 2016
April 22, 2016 8:30 AM Subscribe
"Using the median rent-to-income ratio, which measures the share of income spent on rent, the typical household in New York City is expected to spend 65.2 percent of its total income on market-rate rent in 2016."
Yikes. We pay about 17% of our income to rent (my husband moved into our rent-controlled apartment in 1974), and literally cannot afford to move, if we wanted to. It seems silly to complain about it, because we have a nice apartment several blocks from Central Park, but basically we cannot afford to have children and stay in the city.
posted by roomthreeseventeen at 8:46 AM on April 22, 2016 [2 favorites]
posted by roomthreeseventeen at 8:46 AM on April 22, 2016 [2 favorites]
I want to say it's not sustainable, but given the reality warping powers of extreme wealth heavily invested in NYC real estate as an investment and black box for money holdings, I assume they're just waiting out the clock until everything can be automated (and kept secure with our wonderful flying murder robots) so they can finally let everyone else starve to death.
posted by The Whelk at 8:48 AM on April 22, 2016 [12 favorites]
posted by The Whelk at 8:48 AM on April 22, 2016 [12 favorites]
I'm always baffled by those guidelines that say, "OMG! You should never spend more than 25% of your income on rent!" (That, and "OMG! You should always have 6 months of expenses in a savings account!") And I'm always like, well, no, that's not happening. It never has for my adult lifetime, and probably never will. What am I supposed to do about it?
posted by Melismata at 8:49 AM on April 22, 2016 [30 favorites]
posted by Melismata at 8:49 AM on April 22, 2016 [30 favorites]
Perhaps no other factor is more fundamental to the city’s growing rent burden than lagging income growth.It takes years of education and the hope of a career in places like the "Furman Center for Real Estate and Urban Policy a joint research center between the NYU School of Law and the Robert F. Wagner School of Public Service" to be able to write a sentence like that and not shoot someone. As if, somehow, the growth of rent in NYC is a natural disaster rather than one class of people stealing from another class of people on a grand scale.
But you can't say: "Perhaps no other factor is more fundamental to the city’s growing rent burden than the destructively insane greed of the real-estate corporations and the banks that back them" and keep your job as a data journalist at a respectable non-profit. And that's exactly how the system continues itself...
posted by ennui.bz at 8:49 AM on April 22, 2016 [27 favorites]
Is that gross or net income? I can never tell with this particular shibboleth.
posted by Atrahasis at 8:53 AM on April 22, 2016
posted by Atrahasis at 8:53 AM on April 22, 2016
Interesting that by borough, Brooklyn (65.4%) has the highest rent-income ratio, and Manhattan (49.1%) is actually lower than all the others except for Staten Island which is bringing up the rear and much more in the "normal" range (27.9%).
I wonder what causes this. I would have guessed that Manhattan would be far and away the highest. But I guess higher income people choose to live there too. So many factors to consider.
posted by theorique at 8:54 AM on April 22, 2016 [2 favorites]
I wonder what causes this. I would have guessed that Manhattan would be far and away the highest. But I guess higher income people choose to live there too. So many factors to consider.
posted by theorique at 8:54 AM on April 22, 2016 [2 favorites]
The average for Manhattan is skewed by the couple of handfuls of billionaires who are also crime-fighting vigilantes.
posted by beerperson at 8:57 AM on April 22, 2016 [11 favorites]
posted by beerperson at 8:57 AM on April 22, 2016 [11 favorites]
Reason #1 why I'll never move out of the rust belt. We spend less than 20% of our take home income on our mortgage.
posted by octothorpe at 9:00 AM on April 22, 2016 [1 favorite]
posted by octothorpe at 9:00 AM on April 22, 2016 [1 favorite]
I would be the very last to deny the staggering rent burden in NYC, but I think that number is a bit misleading. I don't believe the typical household actually pays 65% of its income (especially gross!) on its own rent, which is what a casual reading would suggest. In most of Manhattan, at least, private landlords will not rent to you if you can't demonstrate that you earn 40x the monthly rent (so, rent is 25% of your annual income) (or have a guarantor that makes 80x). If you just compare the median income to the median rent, you may get that 65%, but a person of median income is not going to be paying the median market rent. You end up with results like this: "In Manhattanville, for example, the median rent-to-income ratio is forecasted to reach 119.5 percent in 2016, meaning the annualized median market-rate rent in the neighborhood is far greater than the typical household’s total annual income." This is a literal impossibility. You can't pay more in rent than you actually earn for more than the briefest of periods, and no landlord who looks at your income at all is going to rent to you for more than you make.
posted by praemunire at 9:07 AM on April 22, 2016 [8 favorites]
posted by praemunire at 9:07 AM on April 22, 2016 [8 favorites]
From the comments by the author:
When rent-to-income ratio exceeds 100% in a neighborhood, the median asking rent for non-subsidized units exceeds the median annual income in that neighborhood. This could be a sign of a neighborhood that is transforming quickly, has a significant amount of subsidized housing, or both.posted by griphus at 9:09 AM on April 22, 2016 [3 favorites]
So basically when an area with a lot of large housing projects starts gentrifying, that throws the numbers out of whack because the gentrifying sections can't displace the projects (unlike non-subsidized housing which can be displaced/removed.)
posted by griphus at 9:12 AM on April 22, 2016 [1 favorite]
posted by griphus at 9:12 AM on April 22, 2016 [1 favorite]
The percentages are calculated by comparing the median rent in a neighborhood to the median income. As griphus notes, this can even result in percentages above 100, but that doesn't mean people are taking out loans to pay for their rents. I would prefer to know the result of asking everyone what income percent they spend on rent, and taking the median of that. It might turn out that lots of people really are spending 2/3s, but maybe not.
posted by Rangi at 9:15 AM on April 22, 2016 [3 favorites]
posted by Rangi at 9:15 AM on April 22, 2016 [3 favorites]
When rent-to-income ratio exceeds 100% in a neighborhood, the median asking rent for non-subsidized units exceeds the median annual income in that neighborhood. This could be a sign of a neighborhood that is transforming quickly, has a significant amount of subsidized housing, or both.
Yes, I'm not saying that his statistics are literally wrong, I'm saying that they are easily miscontrued to mean that the situation is even worse than it already (direly) is.
Manhattanville is home to the Manhattanville and Grant Houses. That means that the median income of that neighborhood can expect to be "depressed" for the foreseeable future, even if higher-income people move in all around.
posted by praemunire at 9:17 AM on April 22, 2016 [1 favorite]
Yes, I'm not saying that his statistics are literally wrong, I'm saying that they are easily miscontrued to mean that the situation is even worse than it already (direly) is.
Manhattanville is home to the Manhattanville and Grant Houses. That means that the median income of that neighborhood can expect to be "depressed" for the foreseeable future, even if higher-income people move in all around.
posted by praemunire at 9:17 AM on April 22, 2016 [1 favorite]
It's still plenty cheap to room with the CHUDS.
posted by dances_with_sneetches at 9:25 AM on April 22, 2016 [3 favorites]
posted by dances_with_sneetches at 9:25 AM on April 22, 2016 [3 favorites]
This is about market-rate rent, which a lot of New Yorkers don't pay. A little less than half of the total rental stock in NYC is rent-stabilized, and there's a further 200K or so that are part of the Housing Authority.
posted by Automocar at 9:28 AM on April 22, 2016 [4 favorites]
posted by Automocar at 9:28 AM on April 22, 2016 [4 favorites]
"Which is why everyone should move to Staten Island."
Staten Island rents are also bizarrely high especially when you take into account the complete mess of intra-island transportation. You can get from Staten Island to Manhattan faster than it takes you to get around Staten Island.
posted by I-baLL at 10:27 AM on April 22, 2016
Staten Island rents are also bizarrely high especially when you take into account the complete mess of intra-island transportation. You can get from Staten Island to Manhattan faster than it takes you to get around Staten Island.
posted by I-baLL at 10:27 AM on April 22, 2016
The funny thing about this is that the proposed solutions are likely to reduce the number of market rate units available. Mandatory inclusionary housing programs mean that construction projects that might otherwise be modestly profitable are not, so only the extremely profitable ones get built, while rent control means that the existing residents have a strong incentive to never move (like roomthreeseventeen). So the number of vacant units available for rent decreases, competition for them then becomes fiercer, and rents go up. So the statistics will get even worse, which, of course, well lead to calls for more inclusionary housing and even stronger rent control...
posted by alexei at 10:38 AM on April 22, 2016 [7 favorites]
posted by alexei at 10:38 AM on April 22, 2016 [7 favorites]
Since we get threads like this so frequently, after the last one I did some research. It turns out in the 30 years since I moved to NYC, the population has increased by roughly one million. Have one million new apartments been buit since then? No. Have even half a million new apartments been buit since then? I doubt it.
I am no economist, but aside from the local rent laws, greed, etc, I think supply and demand is one of the main problems.
More and more people wanting to live in a small space; the price sure isn't going to drop.
I wonder if that's also part of the problem with college costs. More and more people wanting that four-year degree. Has this country built a lot of exta colleges in the last 30 years? I doubt it.
posted by freakazoid at 10:47 AM on April 22, 2016 [6 favorites]
I am no economist, but aside from the local rent laws, greed, etc, I think supply and demand is one of the main problems.
More and more people wanting to live in a small space; the price sure isn't going to drop.
I wonder if that's also part of the problem with college costs. More and more people wanting that four-year degree. Has this country built a lot of exta colleges in the last 30 years? I doubt it.
posted by freakazoid at 10:47 AM on April 22, 2016 [6 favorites]
please god don't let new york turn into san francisco
someone tell me how to go fight insane rents in city hall
posted by gusandrews at 10:56 AM on April 22, 2016 [1 favorite]
someone tell me how to go fight insane rents in city hall
posted by gusandrews at 10:56 AM on April 22, 2016 [1 favorite]
Huh? NYC already is San Francisco. Actually its worse.
posted by JPD at 11:01 AM on April 22, 2016 [1 favorite]
posted by JPD at 11:01 AM on April 22, 2016 [1 favorite]
The thing that really fucks you up in NYC is that in a lot of cases it's actually cheaper, on a month-by-month basis, to own than it is to rent.
Which means that people with family money, a large windfall or the ability to build up significant savings end up having a lower cost of living in the long run than people who are living month-to-month. And that's not even getting into how expensive it is to have to move every year or two because you get priced out, or the management company wants to convert to condos, or your landlord wants to give your apartment to one of their children, etc etc etc.
Like I mean, we all know that it's expensive to be poor but in NYC it's particularly ruthless.
posted by Narrative Priorities at 11:05 AM on April 22, 2016 [3 favorites]
Which means that people with family money, a large windfall or the ability to build up significant savings end up having a lower cost of living in the long run than people who are living month-to-month. And that's not even getting into how expensive it is to have to move every year or two because you get priced out, or the management company wants to convert to condos, or your landlord wants to give your apartment to one of their children, etc etc etc.
Like I mean, we all know that it's expensive to be poor but in NYC it's particularly ruthless.
posted by Narrative Priorities at 11:05 AM on April 22, 2016 [3 favorites]
Huh? NYC already is San Francisco. Actually its worse.
Eh, arguable. Many if not most of the new apartment buildings going up have exorbitant rent, but they're actually going up.
posted by griphus at 11:07 AM on April 22, 2016 [1 favorite]
Eh, arguable. Many if not most of the new apartment buildings going up have exorbitant rent, but they're actually going up.
posted by griphus at 11:07 AM on April 22, 2016 [1 favorite]
Which means that people with family money, a large windfall or the ability to build up significant savings end up having a lower cost of living in the long run than people who are living month-to-month
Yep. When my peer group hit its 30s, a lot of people made the decisions of whether they were going to (continue to) save up to buy or start looking to live (and raise families) elsewhere. I feel like that maybe happens to a chunk of people every generation, but in the last 15 years or so apartment prices have doubled, tripled, etc. in even the out-of-the-way neighborhoods while middle-class salaries have very much not.
Around 2000, my mom's friends bought an apartment in the Financial District. 1 bedroom, maybe 600 sq. ft. She bragged to me that it cost over a quarter million dollars. You can barely find an apartment for that amount of money in the shitty Brooklyn neighborhood we're from and in the meanwhile I will bet you that Financial District apartment is now worth multiple millions.
It's real good when you get in on what turns out to be the ground floor.
posted by griphus at 11:15 AM on April 22, 2016 [1 favorite]
Yep. When my peer group hit its 30s, a lot of people made the decisions of whether they were going to (continue to) save up to buy or start looking to live (and raise families) elsewhere. I feel like that maybe happens to a chunk of people every generation, but in the last 15 years or so apartment prices have doubled, tripled, etc. in even the out-of-the-way neighborhoods while middle-class salaries have very much not.
Around 2000, my mom's friends bought an apartment in the Financial District. 1 bedroom, maybe 600 sq. ft. She bragged to me that it cost over a quarter million dollars. You can barely find an apartment for that amount of money in the shitty Brooklyn neighborhood we're from and in the meanwhile I will bet you that Financial District apartment is now worth multiple millions.
It's real good when you get in on what turns out to be the ground floor.
posted by griphus at 11:15 AM on April 22, 2016 [1 favorite]
I mean, we are building an enitrely new neighborhood where none was before that's supposed to be at least 1/3rd affordable housing (in theory)
posted by The Whelk at 11:16 AM on April 22, 2016
posted by The Whelk at 11:16 AM on April 22, 2016
So I was watching a documentary on the 70s and they got the Greenwich village townhouse exploding cause of the botched Weather Underground bomb and the period footage remarked that the entire building was worth 100k.
I did a quick check of what a townhouse nearby that one was going for today...
27.8 Million, an increase of over 2600% in about 40 years.
posted by The Whelk at 11:20 AM on April 22, 2016 [5 favorites]
I did a quick check of what a townhouse nearby that one was going for today...
27.8 Million, an increase of over 2600% in about 40 years.
posted by The Whelk at 11:20 AM on April 22, 2016 [5 favorites]
(And yeah we only got to buy the place we did cause we hit all 7s on the slot machine, twice. Something as bottom of the Maslow pyramid as shelter shouldn't be up to hitting the blind luck jackpot)
posted by The Whelk at 11:23 AM on April 22, 2016 [1 favorite]
posted by The Whelk at 11:23 AM on April 22, 2016 [1 favorite]
Have even half a million new apartments been buit since then? I doubt it.
Maybe with some decent and enforced occupancy requirements we could cut down on those lovely little downtown studios that sit empty 90% of the year
posted by The Whelk at 11:26 AM on April 22, 2016 [1 favorite]
Maybe with some decent and enforced occupancy requirements we could cut down on those lovely little downtown studios that sit empty 90% of the year
posted by The Whelk at 11:26 AM on April 22, 2016 [1 favorite]
That's not 2600%... That's 27,000%.
posted by alexei at 11:26 AM on April 22, 2016 [5 favorites]
posted by alexei at 11:26 AM on April 22, 2016 [5 favorites]
there's little evidence that you can have humane housing conditions in a place like NYC without direct municipal ownership of a percentage of rental properties large enough to control the market.
But, you can't talk about real estate in NYC without talking about the policies that created the modern city: strangling the port, racist real-estate driven highway development, Rockefeller Plaza, deindustrialization of Manhattan especially downtown and onwards... the idea that NYC could be driven by commercial office real estate speculation and concordant professional employment and housing is the policy that has created the gap between income and rent in NYC. But you can't talk about how NYC became this way without talking about the financial interests which drove the transformation. And as NYC has gone, so the nation, not by immutable economic laws but because these are the people ie. Wall Street and "blue chip" corporate America who dominate US economic policy. The same people who "financialized" the US economy, made NYC the way it is.
posted by ennui.bz at 11:33 AM on April 22, 2016
But, you can't talk about real estate in NYC without talking about the policies that created the modern city: strangling the port, racist real-estate driven highway development, Rockefeller Plaza, deindustrialization of Manhattan especially downtown and onwards... the idea that NYC could be driven by commercial office real estate speculation and concordant professional employment and housing is the policy that has created the gap between income and rent in NYC. But you can't talk about how NYC became this way without talking about the financial interests which drove the transformation. And as NYC has gone, so the nation, not by immutable economic laws but because these are the people ie. Wall Street and "blue chip" corporate America who dominate US economic policy. The same people who "financialized" the US economy, made NYC the way it is.
posted by ennui.bz at 11:33 AM on April 22, 2016
The thing that really fucks you up in NYC is that in a lot of cases it's actually cheaper, on a month-by-month basis, to own than it is to rent.
Isn't this true most everywhere? It's certainly true here in my flyover state. The mortgage on a 2 bedroom, 2 bath house is 20% cheaper than my rent on a 1 bedroom, 1 bath apartment in the same neighborhood.
posted by AFABulous at 11:33 AM on April 22, 2016 [4 favorites]
Isn't this true most everywhere? It's certainly true here in my flyover state. The mortgage on a 2 bedroom, 2 bath house is 20% cheaper than my rent on a 1 bedroom, 1 bath apartment in the same neighborhood.
posted by AFABulous at 11:33 AM on April 22, 2016 [4 favorites]
Three cheers for: Rentier capitalism !!!
posted by nikoniko at 11:34 AM on April 22, 2016 [1 favorite]
posted by nikoniko at 11:34 AM on April 22, 2016 [1 favorite]
"In the 1950s, the average New York City apartment rented for $60 a month — around $530 in today’s money. With the US median wage at $5,000 a year, New Yorkers spent 1/10 of their salaries on rent. After World War II, apartments were so cheap and available that Manhattanites would regularly move every September just to get the landlord to repaint their new home."
posted by Atrahasis at 11:43 AM on April 22, 2016 [5 favorites]
posted by Atrahasis at 11:43 AM on April 22, 2016 [5 favorites]
Huh? NYC already is San Francisco. Actually its worse.
No it isn't. It's not even close.
posted by allkindsoftime at 11:44 AM on April 22, 2016
No it isn't. It's not even close.
posted by allkindsoftime at 11:44 AM on April 22, 2016
there's little evidence that you can have humane housing conditions in a place like NYC without direct municipal ownership of a percentage of rental properties large enough to control the market.
Oh? Japanese metropolitan areas - even Tokyo, which dwarfs NYC - are pretty good evidence.
The median price for apartment listings, even in trendy Tokyo neighbourhoods, is below $1000/month. At the lower end, there are thousands of apartments in central Tokyo under $500/month. These are all market rate.
This isn't an accident. It's the result of (mostly) federally regulated land use policy that is *massively* more permissive than North American municipalities when it comes to small and medium scale housing development.
posted by ripley_ at 12:02 PM on April 22, 2016 [4 favorites]
Oh? Japanese metropolitan areas - even Tokyo, which dwarfs NYC - are pretty good evidence.
The median price for apartment listings, even in trendy Tokyo neighbourhoods, is below $1000/month. At the lower end, there are thousands of apartments in central Tokyo under $500/month. These are all market rate.
This isn't an accident. It's the result of (mostly) federally regulated land use policy that is *massively* more permissive than North American municipalities when it comes to small and medium scale housing development.
posted by ripley_ at 12:02 PM on April 22, 2016 [4 favorites]
small-scale housing development.
"Small scale" seems pretty apt as a descriptor when you look at the cost/sqft breakdown.
posted by howfar at 12:12 PM on April 22, 2016 [1 favorite]
"Small scale" seems pretty apt as a descriptor when you look at the cost/sqft breakdown.
posted by howfar at 12:12 PM on April 22, 2016 [1 favorite]
So the statistics will get even worse, which, of course, well lead to calls for more inclusionary housing and even stronger rent control...
Getting rid of rent control worked really really super awesome for managing Boston/Cambridge's housing costs.
posted by praemunire at 12:26 PM on April 22, 2016 [1 favorite]
Getting rid of rent control worked really really super awesome for managing Boston/Cambridge's housing costs.
posted by praemunire at 12:26 PM on April 22, 2016 [1 favorite]
how big is the median one bedroom in San Francisco?
Price per square foot is pretty misleading if the minimum number of square feet is a lot higher in one place vs. another. Lots of people would be willing to sacrifice space for lower rent in SF, but that doesn't matter if you don't have the option of making that trade-off.
posted by en forme de poire at 4:15 PM on April 22, 2016 [2 favorites]
Price per square foot is pretty misleading if the minimum number of square feet is a lot higher in one place vs. another. Lots of people would be willing to sacrifice space for lower rent in SF, but that doesn't matter if you don't have the option of making that trade-off.
posted by en forme de poire at 4:15 PM on April 22, 2016 [2 favorites]
In one sense it is misleading, in another sense if speaks to the quality of the housing stock which is also an important measure.
Regardless the nyc vs sf argument is pointless as they are both insane and we'd just be arguing degrees of insanity.
posted by JPD at 5:07 PM on April 22, 2016 [3 favorites]
Regardless the nyc vs sf argument is pointless as they are both insane and we'd just be arguing degrees of insanity.
posted by JPD at 5:07 PM on April 22, 2016 [3 favorites]
idk, I still think that square footage is kind of a secondary concern; all other things being equal it doesn't do me any good that my studio is 400 square feet instead of 200 if I can't actually accept a smaller unit in exchange for less rent. I also am not sure it's a great proxy for "quality" in general; I don't know that SF units are on average any better maintained than in NYC, for example, and at least with NYC you're much more likely to be better-served by transit at an equivalent price point. I agree they're both insane markets, though.
posted by en forme de poire at 5:57 PM on April 22, 2016 [1 favorite]
posted by en forme de poire at 5:57 PM on April 22, 2016 [1 favorite]
If you were a benevolent dictator of NYC with unlimited power, but realistically limited money and resources, how would you go about solving this problem?
posted by shala at 7:32 PM on April 22, 2016 [1 favorite]
posted by shala at 7:32 PM on April 22, 2016 [1 favorite]
Comparing median income to median market rentsis an act of statistical insanity. NYC has vast amounts of non-market rate housing which is not only a lifelong right but a hereditary asset with a perverse feature that it requires the holder to minimize his or her (declared) income. NYC also has a reasonably high home-ownership rate and it's quite common (as noted above) for the costs of home-ownership to be less than those of renting.
But, that said, housing is expensive in New York. You make it cheaper by allowing more of it to be built. This means upzoning and allowing 100% market rate projects. (Mandatory affordable housing contributions simply raise the price of housing for everyone else while rewarding a few lottery ticket winners with admission to the hereditary subsidy benefit.)
posted by MattD at 9:32 PM on April 22, 2016
But, that said, housing is expensive in New York. You make it cheaper by allowing more of it to be built. This means upzoning and allowing 100% market rate projects. (Mandatory affordable housing contributions simply raise the price of housing for everyone else while rewarding a few lottery ticket winners with admission to the hereditary subsidy benefit.)
posted by MattD at 9:32 PM on April 22, 2016
This isn't an accident. It's the result of (mostly) federally regulated land use policy that is *massively* more permissive than North American municipalities when it comes to small and medium scale housing development.
Couldn't you argue that we basically have this in the USA, and it's called "Houston"?
posted by en forme de poire at 10:47 PM on April 22, 2016
Couldn't you argue that we basically have this in the USA, and it's called "Houston"?
posted by en forme de poire at 10:47 PM on April 22, 2016
And I'm sure just building more in NYC/SF/etc will help in the long run. But in the meantime while you're waiting for supply to meet demand (it could be a very long time before prices even stabilize, let alone drop) how do you protect vulnerable people and prevent them and their communities from being displaced?
posted by en forme de poire at 11:16 PM on April 22, 2016
posted by en forme de poire at 11:16 PM on April 22, 2016
Huh? NYC already is San Francisco. Actually its worse.
No it isn't. It's not even close.
And it's even worse in Oakland, where the largest communities of poor people in the Bay Area live. The median rent in Oakland was 73% of median income two years ago, before double-digit rent increases in 2015 and the same trend so far in 2016. And Oakland has no Staten Island -- there's no affordable place for poor people to move that keeps them within reach of the opportunities they're being priced out of.
posted by mississippi at 11:25 PM on April 22, 2016 [1 favorite]
No it isn't. It's not even close.
And it's even worse in Oakland, where the largest communities of poor people in the Bay Area live. The median rent in Oakland was 73% of median income two years ago, before double-digit rent increases in 2015 and the same trend so far in 2016. And Oakland has no Staten Island -- there's no affordable place for poor people to move that keeps them within reach of the opportunities they're being priced out of.
posted by mississippi at 11:25 PM on April 22, 2016 [1 favorite]
(it could be a very long time before prices even stabilize, let alone drop)
High end NYC rents are dropping. My landlord just offered me a cheaper two year lease than a one year.
posted by JPD at 5:51 AM on April 23, 2016
High end NYC rents are dropping. My landlord just offered me a cheaper two year lease than a one year.
posted by JPD at 5:51 AM on April 23, 2016
NYC has vast amounts of non-market rate housing which is not only a lifelong right but a hereditary asset with a perverse feature that it requires the holder to minimize his or her (declared) income. NYC also has a reasonably high home-ownership rate and it's quite common (as noted above) for the costs of home-ownership to be less than those of renting.
This isn't really as true as the anti rent stabilization people like to claim. A very large percentage of those rent stabilized units ren below the stabilized price in the outerboroughs, which is after all what most Nyers live.
Rent stabilization is only distorting the market in Manhattan and brownstone Brooklyn.
posted by JPD at 5:57 AM on April 23, 2016 [1 favorite]
This isn't really as true as the anti rent stabilization people like to claim. A very large percentage of those rent stabilized units ren below the stabilized price in the outerboroughs, which is after all what most Nyers live.
Rent stabilization is only distorting the market in Manhattan and brownstone Brooklyn.
posted by JPD at 5:57 AM on April 23, 2016 [1 favorite]
Also you can't just inherit the apartment - you have to be cohabitating.
posted by JPD at 7:20 AM on April 23, 2016
posted by JPD at 7:20 AM on April 23, 2016
Also, income has no effect on rent stabilized rents unless it goes over $250k AND the stabilized rent reaches $2700. Then the apt is subject to luxury decontrol.
posted by Mavri at 7:54 AM on April 23, 2016
posted by Mavri at 7:54 AM on April 23, 2016
Vacancy decontrol (which is only based on rent amount ) can only happen after a tenant moves out, but I'm 90% sure luxury decontrol (which is based on rent and income) can happen while the apt is occupied. I only work with poor people, so it's not something I've dealt with directly.
posted by Mavri at 9:17 AM on April 23, 2016
posted by Mavri at 9:17 AM on April 23, 2016
Having lived in both places, SF is a lot, lot worse than NYC if you are new, since the high percentage of rent controlled apartments is what is pushing the median market rent up. Most people, having moved to SF at some point before, say, 2010 are paying closer to Brooklyn numbers, if not less, I'd say. If you've been there a long time, your rent may be incredibly cheap (like my boss paying less that $1000 for a two-bedroom in North Beach), especially since SF was pretty cheap until the tech booms. The downside, of course, is that you can never move and if you get evicted, you basically have to leave town.
Brooklyn (where I live, which is why I know) is now cheaper for newcomers and in general in New York, you can relocate to a place that, even if it is less great, has access to public transit that takes you to where most jobs and other opportunities are.
Anyways, I think like with many other things, the only actual solution is equalizing income distribution. And probably restrictions on allowing apartments to sit empty. I don't think you should be allowed to park your money in some of the most valuable space we have — if you want to park it and not be a landlord, you should buy some art and stick it in those weird tax-island warehouses.
posted by dame at 10:22 AM on April 23, 2016 [1 favorite]
Brooklyn (where I live, which is why I know) is now cheaper for newcomers and in general in New York, you can relocate to a place that, even if it is less great, has access to public transit that takes you to where most jobs and other opportunities are.
Anyways, I think like with many other things, the only actual solution is equalizing income distribution. And probably restrictions on allowing apartments to sit empty. I don't think you should be allowed to park your money in some of the most valuable space we have — if you want to park it and not be a landlord, you should buy some art and stick it in those weird tax-island warehouses.
posted by dame at 10:22 AM on April 23, 2016 [1 favorite]
But, that said, housing is expensive in New York. You make it cheaper by allowing more of it to be built. This means upzoning and allowing 100% market rate projects.
I don't understand this argument. I've never understood this argument. I'm seeing staggering amounts of new construction right now in Brooklyn, none of it affordable, and very few lottery apartments. The atmosphere seems even more frenzied than the height of frenzy 10 years ago. Real estate developers are making money hand over fist and nothing is going to make them voluntarily walk it back to building affordable housing.
I think dame's idea is better: don't allow apartments or storefronts to sit empty. As long as we are talking about a housing crisis, why would we allow anyone to buy property merely as an investment to be bought and sold and not actually used?
posted by maggiemaggie at 12:18 PM on April 23, 2016 [3 favorites]
I don't understand this argument. I've never understood this argument. I'm seeing staggering amounts of new construction right now in Brooklyn, none of it affordable, and very few lottery apartments. The atmosphere seems even more frenzied than the height of frenzy 10 years ago. Real estate developers are making money hand over fist and nothing is going to make them voluntarily walk it back to building affordable housing.
I think dame's idea is better: don't allow apartments or storefronts to sit empty. As long as we are talking about a housing crisis, why would we allow anyone to buy property merely as an investment to be bought and sold and not actually used?
posted by maggiemaggie at 12:18 PM on April 23, 2016 [3 favorites]
Also, I'd close the loopholes that make not renting commercial space (or waiting around for a bank with unlimited funds to settle there) more profitable than having tenants. Packing people in apartment towers won't mean much if there's no deli or grocery store, or launder,at nearby, all of which are starting to completely disappear from the street. (Imagine being 67, having lived in the same apartment for 30 years, and suddently having no place within walking distance to clean clothes or buy food)
posted by The Whelk at 12:29 PM on April 23, 2016 [3 favorites]
posted by The Whelk at 12:29 PM on April 23, 2016 [3 favorites]
(And yeah. There's more than enough space, it's just sitting empty, cause the market long ago left anything real and understandable like supply and demand), it's not about renting space to tenants, and it hasn't been for long time.)
posted by The Whelk at 12:30 PM on April 23, 2016 [2 favorites]
posted by The Whelk at 12:30 PM on April 23, 2016 [2 favorites]
High end NYC rents are dropping. My landlord just offered me a cheaper two year lease than a one year.
How long would it take for median rent to drop, though? Annual population growth in SF has been like 5x the amount of new housing being constructed; even if building regulations were loosened I don't see them catching up with even the already existing demand for at least another several years, let alone further population growth that happens in the meantime, unless something happens to make the region much less desirable. (Also is this really evidence of high end rents actually dropping, or just evidence for some landlords being willing to trade a small amount of potential profit for a reliable tenant?)
posted by en forme de poire at 1:45 PM on April 23, 2016 [1 favorite]
How long would it take for median rent to drop, though? Annual population growth in SF has been like 5x the amount of new housing being constructed; even if building regulations were loosened I don't see them catching up with even the already existing demand for at least another several years, let alone further population growth that happens in the meantime, unless something happens to make the region much less desirable. (Also is this really evidence of high end rents actually dropping, or just evidence for some landlords being willing to trade a small amount of potential profit for a reliable tenant?)
posted by en forme de poire at 1:45 PM on April 23, 2016 [1 favorite]
Brooklyn (where I live, which is why I know) is now cheaper for newcomers and in general in New York, you can relocate to a place that, even if it is less great, has access to public transit that takes you to where most jobs and other opportunities are.
As another person who's lived in both places I can co-sign this.
posted by en forme de poire at 1:46 PM on April 23, 2016
As another person who's lived in both places I can co-sign this.
posted by en forme de poire at 1:46 PM on April 23, 2016
I'd close the loopholes that make not renting commercial space (or waiting around for a bank with unlimited funds to settle there) more profitable than having tenants.
How do these work? I hear of them frequently, but always as rumor, and never with any specifics. It seems that they would have to be some pretty amazing loopholes to be more profitable than thousands of dollars a month in rent.
posted by alexei at 2:10 PM on April 23, 2016
How do these work? I hear of them frequently, but always as rumor, and never with any specifics. It seems that they would have to be some pretty amazing loopholes to be more profitable than thousands of dollars a month in rent.
posted by alexei at 2:10 PM on April 23, 2016
I believe one thing is that commercial tenants are a huge hassle, so it;s just easier to take a hit on income and get a little tax break for empty space and just wait until someone can afford a Million dollar rent shows up.
Someone has to blink first, but it;s not in anyone's economic interest to ever lower their rents.
posted by The Whelk at 3:06 PM on April 23, 2016
Someone has to blink first, but it;s not in anyone's economic interest to ever lower their rents.
posted by The Whelk at 3:06 PM on April 23, 2016
Rents drop very slowly and then they all drop very quickly. Even at the worst of times for landlords vacancy rates are very low. That's why I view the supply-demand, build more units as overly simplistic. Like it obviously matters but the market is far more complex in Toto.
posted by JPD at 5:04 PM on April 23, 2016
posted by JPD at 5:04 PM on April 23, 2016
Also there is absolutely evidence of high end rents dropping, although we are still at the "giving incentives that have real monetary value" stage rather than out right list price reductions. Of course once that happens we hit the "all of a sudden stage"
posted by JPD at 5:07 PM on April 23, 2016
posted by JPD at 5:07 PM on April 23, 2016
That's not 2600%... That's 27,000%.
By my math, it's 15.1 percent APY. Which is still a damn fine investment. But not like not impossible, and comes with a host of expenses and taxes bringing return on investment down further.
posted by pwnguin at 8:21 PM on April 23, 2016
By my math, it's 15.1 percent APY. Which is still a damn fine investment. But not like not impossible, and comes with a host of expenses and taxes bringing return on investment down further.
posted by pwnguin at 8:21 PM on April 23, 2016
Rents drop very slowly and then they all drop very quickly. Even at the worst of times for landlords vacancy rates are very low. That's why I view the supply-demand, build more units as overly simplistic.
Interesting, this isn't something I've heard before. Would be curious to read more about the model/data underlying this and what kinds of things would you prescribe additionally/instead, if you have any refs off hand you could point me to?
posted by en forme de poire at 8:42 PM on April 23, 2016
Interesting, this isn't something I've heard before. Would be curious to read more about the model/data underlying this and what kinds of things would you prescribe additionally/instead, if you have any refs off hand you could point me to?
posted by en forme de poire at 8:42 PM on April 23, 2016
(Sorry, I think that came off much more skeptical than I meant it. I'm legitimately curious.)
posted by en forme de poire at 10:32 PM on April 23, 2016
posted by en forme de poire at 10:32 PM on April 23, 2016
By my math, it's 15.1 percent APY. Which is still a damn fine investment. But not like not impossible, and comes with a host of expenses and taxes bringing return on investment down further.
Hm. Apart from the point that the focus of discussion is the cost of housing, not the value of investment (and so I question the relevance of your point), I don't think your maths is very illuminating. You've neglected a huge aspect of the return on investment, which is the rent on the property.
Firstly, the "host of expenses and taxes" you cite are all offset, and more, by the fact that the property is capable of generating income.
Secondly, and more fundamentally, given that compounding the yearly return on an investment only makes sense where that yearly return is reinvested, your 15.1 APY is, I would suggest, much more misleading than the overall 27,000% increase in value. Had the owner been lucky enough to reinvest their rents in other New York real estate, their profits over the 40 year period would be even more insane.
Can you point to some other investments which have, without compounding, shown a 15.1% annual increase in value over the last 40 years and, in addition, returned a substantial annual dividend?
In my view, however you cut it, the increase in the cost of housing in (most obviously) New York, San Francisco and London, as well as across the devloped world, reflects a signal failure of governance, and gives the lie to the idea that "the market" can, without intervention, provide decent, affordable homes to the extent that they are required. The Tokyo "solution", to let poor people live in shoeboxes, is inhumane and unnecessary. Government investment in house building, appropriate rent controls and a robust and varied social housing sector are required, and take only political will to implement.
The difficulty with finding the political will is that those who see property as an investment, rather than a place to be safe with one's family, would scream blue murder if their heavily mortgaged money machines started to seize up. Nonetheless we have to do it, before our housing crises turn into disasters.
posted by howfar at 2:05 AM on April 24, 2016 [2 favorites]
Hm. Apart from the point that the focus of discussion is the cost of housing, not the value of investment (and so I question the relevance of your point), I don't think your maths is very illuminating. You've neglected a huge aspect of the return on investment, which is the rent on the property.
Firstly, the "host of expenses and taxes" you cite are all offset, and more, by the fact that the property is capable of generating income.
Secondly, and more fundamentally, given that compounding the yearly return on an investment only makes sense where that yearly return is reinvested, your 15.1 APY is, I would suggest, much more misleading than the overall 27,000% increase in value. Had the owner been lucky enough to reinvest their rents in other New York real estate, their profits over the 40 year period would be even more insane.
Can you point to some other investments which have, without compounding, shown a 15.1% annual increase in value over the last 40 years and, in addition, returned a substantial annual dividend?
In my view, however you cut it, the increase in the cost of housing in (most obviously) New York, San Francisco and London, as well as across the devloped world, reflects a signal failure of governance, and gives the lie to the idea that "the market" can, without intervention, provide decent, affordable homes to the extent that they are required. The Tokyo "solution", to let poor people live in shoeboxes, is inhumane and unnecessary. Government investment in house building, appropriate rent controls and a robust and varied social housing sector are required, and take only political will to implement.
The difficulty with finding the political will is that those who see property as an investment, rather than a place to be safe with one's family, would scream blue murder if their heavily mortgaged money machines started to seize up. Nonetheless we have to do it, before our housing crises turn into disasters.
posted by howfar at 2:05 AM on April 24, 2016 [2 favorites]
Anyways, I think like with many other things, the only actual solution is equalizing income distribution.
How would you do that at city level?
And probably restrictions on allowing apartments to sit empty.
So, according to this, only 5.4% of housing units sat empty in NYC (page 11). And of those, only 30-45% were empty for potential investment/hoarding reasons (page 19). Even taking a higher side of that range, only about 2.5% of all housing units in NYC sit empty on purpose.
posted by shala at 10:24 AM on April 24, 2016
How would you do that at city level?
And probably restrictions on allowing apartments to sit empty.
So, according to this, only 5.4% of housing units sat empty in NYC (page 11). And of those, only 30-45% were empty for potential investment/hoarding reasons (page 19). Even taking a higher side of that range, only about 2.5% of all housing units in NYC sit empty on purpose.
posted by shala at 10:24 AM on April 24, 2016
Well there's also the lords chomping at the bit to turn all thier properties into unlicensed hotels with no oversight or regulation (Airbnb ) and dormitories, my magical mayor powers would stop that rig the fuck away (friend's landlord is trying to evict her from her rent controlled by claiming the apartment is empty most of the year ...she's a writer with mobility issue couldn't possibly more at home )
posted by The Whelk at 10:55 AM on April 24, 2016 [1 favorite]
posted by The Whelk at 10:55 AM on April 24, 2016 [1 favorite]
Interesting, this isn't something I've heard before. Would be curious to read more about the model/data underlying this and what kinds of things would you prescribe additionally/instead, if you have any refs off hand you could point me to?
Well the underlying data on NYC vacancy rates is googleable. They are actually at ten year highs right now. The model I've tended to prefer is one where a regions housing costs tend to be mean reverting as a function of income. That trend has shown itself to be correct multiple times. That also works as a model for why purchase prices are up so much while rental yields keep shrinking. There is a guy at Madison who did work on it. Basically the harder it is to build in a place the higher the multiple people pay of income because land prices are higher - so the only way to see a sustainable increase in those numbers is from changes in zoning policy - which in NY at least hasn't changed much. Its a cousin of S/D, but a bit more nuanced and useful I think.
I suspect NYC and SF are just going through cyclical booms that will mean revert. SF is a pretty straightforward economic boom led by the current tech boom(bubble?). NYC is bit more perplexing as the economy here really isn't great. Finance is basically the engine of the city's economy that has really not been good since '07. The fact rental yields keep falling is probably a sign that some of the housing stuff is driven by capital flight that has moved beyond London/Vancouver/Sydney. But that's not really sustainable either.
posted by JPD at 7:07 AM on April 25, 2016 [1 favorite]
Well the underlying data on NYC vacancy rates is googleable. They are actually at ten year highs right now. The model I've tended to prefer is one where a regions housing costs tend to be mean reverting as a function of income. That trend has shown itself to be correct multiple times. That also works as a model for why purchase prices are up so much while rental yields keep shrinking. There is a guy at Madison who did work on it. Basically the harder it is to build in a place the higher the multiple people pay of income because land prices are higher - so the only way to see a sustainable increase in those numbers is from changes in zoning policy - which in NY at least hasn't changed much. Its a cousin of S/D, but a bit more nuanced and useful I think.
I suspect NYC and SF are just going through cyclical booms that will mean revert. SF is a pretty straightforward economic boom led by the current tech boom(bubble?). NYC is bit more perplexing as the economy here really isn't great. Finance is basically the engine of the city's economy that has really not been good since '07. The fact rental yields keep falling is probably a sign that some of the housing stuff is driven by capital flight that has moved beyond London/Vancouver/Sydney. But that's not really sustainable either.
posted by JPD at 7:07 AM on April 25, 2016 [1 favorite]
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