NYC: Housing Demand Increasing Faster Than Supply, Rents Rising Faster Than Incomes

Last week New York University’s Furman Center released its “Changes in New York City’s Housing Stock” report for 2017, showing the city’s housing stock isn’t equal to our housing demand, with the number of city housing units increasing by 19% since 1970, but not nearly as fast as population growth or demand. They reported, unsurprisingly, that rents have been increasing considerably faster than incomes.

           
Since 2000, the number of housing units have increased by 8.2%, but adult population grew by 11%, and the number of jobs in the city were up 16.5%. In those 17 years, median monthly rents increased $300, while income of renter households increased by $145. For newly built units between 2000 and 2010 the median unit rented for about $50 a month more than all other units, but by 2016, in constant dollars, that price differential increased to $400 a month.
About 68% of New York City households rent their home, as compared to about one-third across the United States. That makes the city’s very low vacancy rate, about 3.6% according to New York City’s Housing and Vacancy Survey (HVS), a major driver of increasing rents in the city as demand exceeds supply. And the vacancy rate for housing affordable to very low income and extremely-low income households is even lower. The city defines it as an emergency any time the rental vacancy mark goes below 5%, even though it has routinely been below 5% for decades.

            The Furman Center study also reports that the lack of supply of housing is driving an increase in household size, as more people crowd into less space, with more and more households severely overcrowded. Overcrowding is often a precursor for homelessness.