I think the New York City housing market has outpaced inflation by quite a bit over the past twenty years, so the 39% increase since 1986 might be in line with rent increases elsewhere in the city over the past 20 years. Something tells me that they are not, though. It would really be interesting to figure that out, though, wouldn't it? Unfortunately, I am too lazy (or busy, depending on how you look at it), to compare rent to salaries in 1986, rent to salaries now, and Westmont rent to salaries now, and to compare the Westmont rent to other buildings both in the area and elsewhere in NYC.
Luckily, some hard-working people at the New York City Rent Guidelines Board have done some of that rent:salary calculating and surveying rents across the city legwork for me. In their publication titled "2006 Income and Affordability Study" [PDF], on pages 54-55, they report:
Affordability of Rental HousingI didn't realize that HUD determined Fair Market Rent. I was under the impression that Fair Market Rent is "whatever people are willing to afford," which, at least in my neck of the woods, seems to be heading towards "a helluva lot of money and much more than I could ever afford." These are HUD's Fair Market Rent data sets. I don't know what one does with such data other than bemoan one's overpriced apartment. Oh. Never mind. Based on what little I've read online in the past, um, five minutes, I think that they are used to figure out some housing assistance programs (Section 8?), but I'm not sure of the details. This [PDF] explains more. In any case, FMR it seems to be correlated to city-wide rental prices, so if it's grown faster than average city salaries, that indicates something about rent:salaries in general. FMR clearly has almost nothing to do with rents in one small part of Manhattan, which must be the most expensive borough.
Examining affordability of rental housing, the 2005 HVS reported that the median gross rent-to-income ratio for all renters was 31.2%, meaning that half of all households residing in rental housing pay more than 31.2% of their income in gross rent, and half pay less. Furthermore, more than a quarter (28.8%) of rental households pay more than 50% of their household income in gross rent. Generally, housing is considered affordable when a household pays no more than 30% of their income in rent.15 Both the overall gross rent-to-income ratio and the proportion of households paying more than 50% of income towards rent increased from the 2002 HVS, which reported proportions of 28.6% and 25.5% respectively....
Despite ongoing efforts by a number of government agencies and non-profit groups, housing affordability remains an issue in a city ranked 11th highest in a nationwide survey of monthly rental costs ($856), but only 27th highest in median household income ($41,509).16
A number of studies have chronicled the difficulty New Yorkers face in finding affordable housing, including an annual study by the National Low Income Housing Coalition that found NYC housing to be unaffordable to the poorest working New Yorkers. In order to afford a two-bedroom apartment at the City’s Fair Market Rent ($1,133 a month), as determined by the U.S. Department of Housing and Urban Development (HUD), a full-time worker must earn $21.79 per hour, or $45,320 a year. Alternately, those who earn minimum wage would have to work the equivalent of 145 hours a week (or two people residing together would each have to work 72.5 hours a week) to be able to afford a two bedroom unit priced at Fair Market Rent.17
And here, they discuss the increase in salaries vs. housing costs over the past 20-25 years, since that article was written about the construction of the Westmont and Key West. This is what really interested me.
A report released in January 2006, “Pulling Apart in New York,” documents income trends for both New York State and New York City from the early 1980s through the early 2000s.19 The study found that New York State has the widest income gap between rich and poor of all fifty states, and the gap grew over the past twenty years, with only income disparity in Arizona growing at a faster rate. While nationwide the income of the rich grew at three times the pace of the poor, in New York State it grew at five times the rate.
Other items related to that last post, but not about a historical perspective on rents...
Someone from the State Insurance Fund Of New York saw the previous post at 10 am yesterday. They got to it by Googling "fake wall New York." Should I be concerned? Is there a worker's comp issue here? Are lots of people getting injured on the job putting up fake walls? And do you know how many other people have gotten to my blog since Friday by Googling "fake wall" or "turn one bedroom into two"? Several! This is clearly a hot topic.
How about the fact that someone from Archstone-Smith headquarters, in Denver, CO, was reading the post at home at 8 pm on Monday night? They were reading it because someone (possibly an electronic clipping service?) e-mailed it to them. Do you think corporate read my post and issued a directive: "Take her down!" Or maybe they'll read it and decide, "You know what? ALG is right (as usual). These new higher rents are ridiculous!"
Also, read EAR's first comment on the last post if you haven't yet. It has some suggestions of actual steps you can take if you find yourself in a similar situation. Feel free to respond to her comment with more suggestions.
15. The HUD benchmark for housing affordability is a 30% rent-to-income ratio. Source: Basic Laws on Housing and Community Development, Subcommittee on Housing and Community Development of the Committee on Banking Finance and Urban Affairs, revised through December 31, 1994, Section 3.(a)(2).
16. 2004 American Community Survey, U.S. Census Bureau. http://www.census.gov/acs/www/index.html
17. National Low Income Housing Coalition report,"Out of Reach 2005."
19. "Pulling Apart in New York: An Analysis of Income Trends in New York State," Fiscal Policy Institute. January 26, 2006. [You can find some of the Fiscal Policy Institute's material here, but it looks like they haven't put this paper from 2006 online yet.]