NEW YORK, NY - Since the end of the financial crisis, monthly rents for New York City apartments listed on StreetEasy increased 31 percent or $653, according to StreetEasy's annual rent affordability study. While the pace of rent growth has varied widely across neighborhoods — from 15 percent in Ridgewood, Queens, to 45 percent in Ditmas Park, Brooklyn — rents are growing fastest in areas with higher shares of low-income residents and renter households with children.
Rents in neighborhoods where families make up at least 25 percent of residents grew 32 percent on average, 5 percent faster than neighborhoods where less than one quarter of residents had children. Manhattan neighborhoods including Midtown, Gramercy Park, and the Financial District, where less than 10 percent of renters have children, were among the neighborhoods with the slowest-growing rents. Outer-borough areas such as Ditmas Park, Elmhurst, and University Heights, where more than a third of renters have children, were among the neighborhoods where rents rose the most.
Rent increases have also hit low-income households especially hard. In the neighborhoods with household incomes below the city's 2010 median of $50,285, rents grew by 33 percent. Over the same 10-year period, rents in neighborhoods with an above-median income grew by just 27 percent — 6 percent slower. For a household spending $2,000 per month on rent in 2010, this 6 percent additional growth adds up to an additional $125 per month or $1,500per year in 2018. In neighborhoods like Prospect Lefferts Gardens and Midwood, dozens of apartments now ask for rents more than 40 percent higher than at the beginning of the decade.
"Rents have risen in the city, but not all New Yorkers have felt the same effects," says StreetEasy Senior Economist Grant Long. "Residents who already struggle to make ends meet and renters dealing with the high costs of childcare are predominantly living in areas that see the most dramatic rent growth. These are often residents who have little financial flexibility to begin with. As a greater share of their incomes goes towards rent, it's increasingly difficult for families to save for a down payment on a home, their children's college education, or emergencies."
The StreetEasy study also reveals some of the impacts of zoning changes around the city. Seven of the top 10 neighborhoods with fastest rent growth were in part downzoned over the last two decades, limiting growth in the supply of housing. Meanwhile, three of the 10 neighborhoods with slowest rent growth — Long Island City, Dumbo, and the Upper West Side — were in part upzoned between 2007 and 2009. Taken together, these findings suggest that the zoning-related supply factors in some areas of the city may have played a role in mitigating or accelerating overall rent growth.