A recent study done by StreetEasy using their own data along with data from Zillow and the US Bureau of Labor Statistics found the gap between median rent and average wage increases across the US, and New York City’s gap may actually bring a tear to your eye.
That’s because since 2019 rents have grown faster–1.5x faster to be exact–than wages in 44 of the nation’s 50 largest metropolitan regions, and no place saw a gap worse than NYC.
Between 2022 and 2023 alone, wages in NYC increased 1.2% compared to a whopping 8.6% increase in rents–a 7.4% point difference accounting for the largest gap in the country.
And though NYC’s gap is the worst, wages simply haven’t kept up with rent growth anywhere across the country in recent years.
To put NYC’s growth into perspective, our friends over in Boston, which came in second place, saw a 6.8% difference, with wages decreasing by 1% and rents increasing by 5.8%.
Cincinnati, which came in third, had a 6.4% difference, though no other metropolitan regions surpassed 5.6%.
And though the trend has cooled in the past year, the gap between the housing renters can afford and the housing that is on the market is glaring. In several of the country’s largest metro areas, wage growth actually declined in the past year while rent growth continued to rise.
And though NYC’s strong job market increased both demand and prices in the rental market, the city’s mere 1.2% year-over-year increase in wages is clearly not enough to counter the 8.6% rent increase.
StreetEasy economist Kenny Lee blamed the rise in rental costs to a severe housing shortage. When there’s a shortage of houses landlords implement insane price hikes.
Lee stated:
The report really underscores the need for action. The really historical shortage of the supply of affordable homes in New York City has made it challenging for renters to find an affordable place to live in the city.
Though unfortunately we’re not sure if the increase in rent will die down any time soon–after all, NYC was just named the wealthiest city in the world for 2024 with a total of 349,000 millionaires–more than anywhere else in the world–calling the city their home.
The full study can be found here.