On Monday, New York City took a dramatic step that highlights just how out of control rental housing costs have become in the Big Apple and in many cities nationwide. For the first time, New York froze [3] rents for one-year leases on a million rent-stabilized apartments.
“Today’s decision means relief,” Mayor Bill de Blasio told [4] reporters. “We know tenants have been forced to make painful choices that pitted ever-rising rent against necessities like groceries, child care and medical bills.”
Landlords balked and citicized City Hall, calling the move an “unconscionable, politically driven decision.” But Rent Board chair Rachel Godsil was having none of it. Her staff had found that landlord incomes had grown for nine years in a row, including by 3.4 percent last year, while costs only grew by 0.5 percent. In contrast, a majority of most stabilized renters faced continuing income stagnation.
New York City’s struggle with affordable rental housing is part of a nationwide trend that has seen rental housing costs skyrocket in recent years as the housing market has mostly recovered from the 2008 recession, which was in part fueled by real estate speculation and Wall Street aggressively repackaging and reselling risky high-interest mortgages.
According to a new study [5] by Harvard University’s Joint Center for Housing Studies, vast stretches of the county are facing a rental housing crisis marked by big rent spikes. “The number of cost-burdened renters [paying more than 30 percent of incomes]… set a new high in 2013 of 20.8 million, totaling just under half of all renter households,” Harvard researchers found. “Although the number of severely burdened renters edged down slightly, the number of moderately burdened renters climbed by a larger amount.”
Most low to moderate income households are feeling a very big pinch. The researchers said that 80 percent of households with annual incomes under $15,000, three-quarters of renters with incomes up between $15,000 and $29,999, and 45 percent of households earning up to $44,999, are all “severely burdened,” with non-whites and single mothers facing the greatest financial stress.
“Minorities and certain types of households are especially likely to have severe housing cost burdens,” the report said. “Indeed, 26 percent of black households, 23 percent of Hispanic households, and 20 percent of Asian and other minority households were severely burdened in 2013, compared with just 14 percent of white households. Nearly a third of single-parent families also had severe burdens, compared with a tenth of married couples with children. Finally, more than half of households headed by an unemployed individual in 2013 were severely housing cost burdened.”