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Rising Rent Burdens, Shrinking After-Rent Incomes Contribute to Hardships Among Poor New Yorkers

Rent Increases Are Outpacing Income Gains
According to Community Service Society Report

New York, NY, June 16, 2005 – Rent is a major burden for most New Yorkers, but for New York City’s poorest residents, increasing rent burdens are eating into and eroding disposable income available to meet basic needs such as food, medicine, utilities, heating and more. According to a report released today by the Community Service Society, Making the Rent: Rent Burdens and Hardships Among Low Income New Yorkers (PDF), rising rents have been outpacing household income gains for poor New Yorkers.

The report, written by CSS Housing Policy Analyst Victor Bach, examined changing rent burdens for low-income New Yorkers between 1993 and 2002 and their potential consequences, using data derived from the triennial NYC Housing & Vacancy Surveys (HVS) carried out by the U.S. Bureau of the Census.

New York renters are divided into three housing sectors: subsidized, private rent-regulated, and private unregulated rentals. One of the report’s more striking findings is that the largest share of low-income renters live in rent-regulated apartments—about 42 percent live in rent-stabilized or rent-controlled apartments. By contrast, only 26 percent of poor households live in subsidized housing—including public housing, Section 8 or Mitchell-Lama rental housing.

Not surprisingly, poor renters struggle under heavy and growing rent burdens, with 65 percent paying at least half their incomes toward rent in 2002, up from 55 percent in 1993. But for those living in rent-regulated units, it’s even worse: the proportion paying at least 50 percent of their income for rent rose from 66 percent in 1993 to 74 percent in 2002.

Although rent burdens for poor tenants in unregulated rentals tend to be comparatively higher, the trends indicate that burdens in the regulated sector are worsening at a rapid rate, approaching levels observed in the unregulated market, where 77 percent of these households paid at least 50 percent of their income for rent in 2002. In subsidized housing where rents are pegged to income, poor families fared better. But as federal housing programs such as section 8 and public housing are scaled back, increasing numbers of poor families will have to rely on unaffordable private rentals or temporary housing with friends, family, or in city homeless shelters.

“Spiraling rents in New York City are ratcheting up rent burdens on poor families, increasingly threatening their survival,” said Victor Bach. “Incomes may have increased over the last 10 years in actual dollar amounts, but their after-rent purchasing power for each household member has decreased, in 2002 less than $30 a week per person to meet other basic needs.”

The CSS annual survey of low-income New Yorkers, The Unheard Third (PDF), sheds light on the consequences of high rents on poor families. It revealed a high level of housing-related hardships among the poor – 43 percent experienced at least one housing hardship during the last year, usually falling behind in rent payments, and 28 percent reported two or more. Other kinds of family hardships were found to be closely related to rent stresses.

CSS President David R. Jones linked the housing burden to the wider economic situation. “Our housing affordability problems must be addressed by housing policy decisions,” said Jones. “But their solution also rests on the system of job and income opportunities available to people at the bottom of the economic ladder.”

Recommendations:

1. Keep rent guideline increases low. The New York City Rent Guidelines Board must keep this year’s guideline increases to a minimum. The Board must refrain from jump increases at the lowest rent levels, where households that can least afford higher rents are concentrated.
2. Treat property tax burdens on renters and owners alike. Property tax burdens and relief must be more fairly distributed among those who own their homes or apartments and rental property owners, so that large property tax increases are not passed along to renters.
3. Target more emerging affordable housing opportunities to the poor.
4. Preserve existing affordable housing programs. Every thing should be done to prevent the loss of subsidized housing resources — public housing, HUD-subsidized developments, Mitchell-Lama rentals. The city and the state must intensify their roles in fighting against the withdrawal of Washington from key housing programs that serve the poor.

For over 150 years, the Community Service Society, an independent, nonprofit organization, has tackled the complex issues of poverty by advocating for the poor and underserved; researching and shaping public policy affecting them; and providing direct services that improve their quality of life.

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