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DiNAPOLI: RISE IN NYC METRO AREA HOUSING COSTS OUTPACES OTHER U.S. CITIES

Housing costs in New York City and the surrounding suburbs have grown more than 68% over the last decade, the largest increase among selected major metropolitan areas in the U.S., according to a new report from New York State Comptroller Thomas P. DiNapoli.

“Housing costs in New York City and the surrounding suburbs have risen dramatically over the last decade,” DiNapoli said. “When we look at other major U.S. metropolitan areas, we see New York’s housing costs have grown at a greater rate. More than half of tenants in the city spend 30% of their income on rent, forcing them to make tough choices. City and state leaders recognize New York’s housing affordability problem but need to implement cost-effective solutions more quickly.”

Housing Costs Grow
Since 2011, housing costs, which include shelter (mortgage payments, rent and property taxes), utilities, operations/maintenance, and furnishings reached an all-time high in the New York City metro area, which includes the city as well as Nassau, Suffolk, Westchester, and Rockland counties. In 2021-2022 homeowners or renters spent an average of $30,300 on housing costs, only trailing the San Francisco and Seattle metro areas, reflecting 40% of their total household expenses, compared to 34% nationally.

Renters Most Burdened By Housing Costs
One million tenants or 53% of households spent over 30% of their income on rent in 2021, which has remained significantly high over the last decade. In Brooklyn and Queens, a greater share of moderate- and middle-income households in 2021 spent over 50% of their income on rent than in 2011.

After a dip in 2020, rents rose in 2021 and 2022, and more people in New York City fell behind on their payments. In June 2021, 26% of rental households in the metro area were behind on rent, greater than almost 15% nationally. While the largest share of households that fell behind on rent were low-income, 22% of moderate-income households on Staten Island and 8% of middle-income households in Brooklyn also fell behind. As of October 2023, 18% of city residents were behind on rent, compared to 12% nationally.

Economic Headwinds Restrict Supply
A halt in construction during the pandemic, a lapsing of the real estate property tax exemption program known as 421-a, and higher interest rates have all contributed to a slowdown in housing development.  DiNapoli’s report noted the city has taken some action to support the development of new housing and has released proposals to create new incentives to boost production.

In 2023, the city completed almost 13,900 affordable units through the first 10 months of the year, but it has not been enough to keep up with demand. Despite efforts, permits for new residential buildings, which include new market rate units, declined by 85% in the first eight months of 2023.

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Report
The Cost of Living in New York City: Housing

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