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#7 …Is On the Rise – Josh Solomowitz
March 12, 2015 | Leave a Comment
Like my title suggests, it seems that ever since the Recession, everything seems to be going up in NYC – home prices, number of state landmarks, volume of sales, rent prices, housing quality, and a bunch of other indicators on the condition of the city. This can be viewed in a positive or negative way, depending on your circumstances. The inequality is there, and probably always will be, but as of now, the low-income and many in the middle class are on the negative, with the rich and wealthy on a good position.
2/3 of the city rents their homes – this is a huge number; much more than the national average. And this just isn’t by coincidence — not only is the rent ridiculously high in NY, but landlords make much more off of renting than selling an apartment, especially in Manhattan. Think of the check people write every month and how much that eventually adds up to over the years — it is a ton.
There have been a few drops surprisingly. The most alarming is the amount in home purchase lending, so people can’t even buy homes even if they wanted too. Even though a majority of banks and the real estate market have recovered since the Recession, it seems that they are still apprehensive about forking over their money. The lower income population suffer the most because they may never be able to own a home in NYC, especially with the increasing prices.
On that note, it’s important to point out that rent in NYC is more than 25% higher than national average. Close proximity to job opportunities, networking, and easy and relatively cheap transportation, among others, are pulling factors here. The rent is highest in Manhattan and lowest in Bronx, which shows the relative demand. However, rent increased most in 2012 in Staten Island, showing movement to the suburbs but still wanting to be close to the city.
Going back to the constant argument of income inequality, the increase of rent has far surpassed the increase in income. 11% and a 2%, respectively. Thousands who work in the city are on minimum wage and/or the Supplemental Nutrition Assistance Program with no decline in sight. With many in NYC paying forty percent to over half of their income to rent expenses, they can’t support their families with necessities like food. Spending this much money on rent can really hurt the local economy, as these people won’t have the disposable income to spend on local businesses, which will in turn go out of business. Then, the whole zone will suffer. NYC isn’t the only one with high amounts of income inequality – LA, Chicago, and Houston are right up there with it, along with similar poverty rates and income diversity ratios.
On the plus side, the city’s crime, murder, and incarceration rate are all at some of the lowest levels they’ve ever been at. The shining beacon is the increase in education and graduation levels, one of the biggest issues that could help solve income inequality. This is the magical key to overriding many issues, especially income inequality, that we deal with today.
