New York Rents
In New York, rents are increasing twice as fast as wages:
What’s worse, StreetEasy found that rent increases haven’t risen equally across the various income brackets or rent price points. For instance, apartments priced at the bottom fifth tier of the market have spiked 4.9 percent annually since 2010 while homes in the top fifth tier of the market appreciated annually by three percent, on average. In essence, the lowest priced apartments have seen their rents increase the most.
With that, New York City’s lowest wage earners have seen their paychecks increase the least since 2010, yet wages for the city’s highest earners have grown the greatest. The combination of steep rent increases paired with minimal wage gains for low-income New Yorkers have forced many to spend an unreasonable amount of their income on rent.
I lived in New York for over 10 years, but with the way rents are continuing to go, I won’t be moving back any time soon.
A few months ago I read The Complacent Class by Tyler Cowen and he spends a good deal on this income/rent disparity:
Indeed, in this new world the performance of income and social mobility is rather disappointing. In spite of the people who are doing great, the data indicate that the upward mobility of Americans, in terms of income and education, which increased through about 1980, has since held steady. Partly this is because the economy is more ossified, more controlled, and growing at lower rates. It’s also because it is much more expensive to move into a dynamic city, an option that gave many a way of making economic progress in times past. Two researchers, Chang-Tai Hsieh and Enrico Moretti, estimate that if it were cheaper to move into America’s higher-productivity cities, the U.S. gross domestic product (GDP) would be 9.5 percent higher due to the gains from better jobs. Yet no one thinks that the building restrictions of, say, San Francisco or New York will be relaxed much anytime soon. Most of the complacent class just doesn’t see building restrictions as an urgent issue, and even if they understand the problem intellectually, as many of them do, the selfish incentive to make changing restrictions a priority just isn’t there.
New York has turned into ‘a playground for the rich.’ This is unfortunate because it keeps out keeps out a key demographic that gives New York it’s rich culture: artists (painters, musicians, writers, designers).