Gentrification is spelled out in a new study has found that rents in New York City are rising twice as fast as wages, except for the city’s wealthiest citizens.
A report published by the real estate search engine StreetEasy yesterday shows that rent in new york city is up 33% from 2010, as highlighted in the study:
On average, an apartment asking $2,000 per month for rent in 2010 would now ask $2,657 per month.
The report compared StreetEasy Rent Index with the Department of Labor’s wage data and found that rent is rising twice as fast as wages. Rent prices increased on average 3.9% per year while wages increased 1.8% over the same time period.
The poorest New Yorkers are the worst affected
Sadly, those of us working in New York City’s lowest paid jobs were the ones that suffered the most from the disparity between pay and rent increases.
Those in the bottom 20% of wage earners (“bottom quintile” in the chart below), around 800,00o people, saw the lowest overall increase in pay. In fact, data showed that median income earners saw a drop in pay:
On the other end of the wage spectrum, the median wage for workers in the healthcare support sector, including home health aides and dental assistants, fell by 1.1 percent over the same period.
While wages have stagnated for the poorest New Yorkers, rent in the lowest bracket of the housing market saw the highest increase in rent, some 4.9% percent a year since 2010. Areas that experienced the highest rent hikes were East Harlem, Inwood and Washington Heights.
The highest paid New Yorkers are the least affected
The top 20% of wage earners (“top quintile” in the above chart) in NYC saw their wages increase the most, around 2.8% for the highest earners. Their apartment prices increased about 3% per year keeping their rent to pay roughly on track.
The slowdown in rent appreciation in many areas over the past year has also primarily benefited those who can afford to pay more than $3,775 per month for an apartment. For a household to be able to afford an apartment at this level without paying more than 30 percent of their income on housing, they would need to earn $151,000 a year — 58 percent more than the city’s median income for a family of four.
As many New Yorkers are forced to dedicate more of their pay on rent they face difficult decisions. Some 800,000 of our neighbors may soon have to decide, whether to skimp on food, health, and education, in favor of keeping a roof over their heads. THIS is the sad reality of gentrification.
Featured image source [Wikimedia Commons]