News | advice | area guide

New York Housing Is Getting (Gasp!) More Affordable

What will New Yorkers do if they can’t bemoan the high cost of housing at every cocktail party and youth-soccer match?

Now signs are emerging that New York City’s perpetual housing worries may be easing.

Housing costs are taking a smaller bite out of the typical household’s monthly budget, according to a new U.S. Census Bureau survey that is conducted every three years. The survey also shows a record amount of new housing and the third highest rental-vacancy rate since the bureau conducted is first survey in 1965.

Driving the changes is a surge of construction in the last few years and a strong economy in which the growth of jobs has outpaced the increase in rents. The economic gains are beginning to benefit lower-income groups, economists said.

“A nearly decade-long rising economic tide really is starting to lift all boats,” said James Parrott, an economist at the Center for New York City Affairs at The New School. “The trends are all positive and encouraging and bode well for improved rental housing affordability,” he said. Some groups of New Yorkers, such as the mostly elderly tenants in rent-controlled apartments, aren’t sharing in the prosperity, he added.

The Census Bureau survey, which was conducted in the first half of last year, found a record 3.47 million housing units in New York, an increase of 117,000 since 2011. More than 35,000 additional rental apartments and 15,000 condominiums are due to open in 2018 and 2019, according Nancy Packes Data Services.

The vacancy rate was 3.63% across the city, the report found. The two higher vacancy rates recorded since 1965 included a peak rate of 4.01% in 1996, as the city was recovering from a steep local recession. By contrast, the current figure comes amid a sustained period of economic growth.

In Manhattan, the vacancy rate was 4.73%, the highest it has been in at least a decade. For all private rental housing, it was 6.07% and 8.74% for apartments renting for $2,500 or more. These were also at their highest rates in years.

“Rising vacancy rates citywide are a sign that, overall, the housing supply is starting to catch up with demand, helping to relieve the upward pressure on housing costs,” said Mark Willis, a senior policy fellow at the NYU Furman Center.

But, he noted, the effects were uneven, with vacancy rates falling to 2.71% in the Bronx.

Household income among New York renters rose 11% over a three-year period in constant dollars, while rents rose 8.2%. The median household income was $47,200 for renters in 2016 and $57,500 for all households, the report said.

For tenants of rent-stabilized apartments, incomes rose by 7% while rents rose by 2.6%, though rents rose more quickly than income for people who live in older rent-stabilized buildings.

The city’s housing commissioner Maria Torres-Springer said that despite rising incomes “the city is still facing a dire affordability crisis.” She said the administration would continue to build and preserve affordable homes and push to strengthen rent laws.

Oksana Mironova, a housing-policy analyst with the Community Service Society, which often advocates for lower-income tenants, said there were “definitely some positive things in the report” but she wondered whether the higher income figures reflect higher-income tenants moving into newer luxury buildings that under city rules are covered by rent regulation.

Rent laws require localities to abandon rent regulation if the overall vacancy rate exceeds 5%. The City Council is due to take up legislation on March 21 to extend regulations for three more years.

Landlord groups are arguing the Census data present such a rosy view of the housing market that they are urging the City Council to remove certain categories of housing from rent regulation—namely Manhattan apartments and apartments renting for $2,000 or more.

Jack Freund, executive vice president of the Rent Stabilization Association, which represents 25,000 owners and managers of rent regulated housing, noted that the 5% standard is within the survey margin of error of the 4.73% vacancy rate Manhattan. The vacancy rate for apartments renting for $2,000 to just under $5,000 is 5.2%.

The City Council is all but certain to continue regulation in full, housing experts say, in part because of the longstanding voting power of more than one million rent-regulated tenants. But that clout might have been overstated. In the latest survey, the census bureau said it adjusted its methodology used to classify rent-stabilized apartments, reducing its count of rent-regulated apartments.

In 2014, the Cenus Bureau said there were 1.03 million rent-stabilized apartments. But the recalculation shows that there actually were 945,859 that year, 8% less. It put this year’s total at 966,442.

The post New York Housing Is Getting (Gasp!) More Affordable appeared first on Real Estate News & Insights | realtor.com®.

Source: Real Estate News and Advice – realtor.com » Real Estate News