Press release

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MAKING THE RENT:
ESCALATING RENTS CREATING NEW HARDSHIPS FOR THE CITY'S POOR

CSS Proposes Relief for Rising Rent Burdens in New York City

New York, NY, December 14, 2006 -- With as little cash as $32 a week per family member left after paying rent, many low-income families in New York endure a monthly ritual of choosing which basic needs – food, transportation, medical care – will go unmet according to the findings of the latest report from the Community Service Society of New York, “Making the Rent, 2002-2005: Changing Rent Burdens & Housing Hardships Among Low-Income New Yorkers.”  The report updates the CSS analysis of rent burdens between 2002-2005.

The report confirms what many poor New Yorkers have been experiencing: rising rents that are outpacing income and leaving households with very little cash to meet other basic necessities. Since 2002 housing hardships are affecting a wider cross section of low-income New Yorkers – the “poor”: households at or below the federal poverty line and the “near poor”: households with incomes up to twice the federal poverty line – against the backdrop of modest gains in income and the city’s economic recovery.

David Jones, president & CEO of the Community Service Society notes, “This report clearly shows the impact of unaffordable rents on poor New Yorkers. It echoes the findings of our Unheard Third survey that reveal the extent to which low-income renters have little cash remaining at the end of the month after struggling to pay rent and must forgo other basic necessities; choices that often directly impact the health and well being of family members.”

Making the Rent details that between 2002 and 2005 the citywide median rent increased by 21 percent, the steepest increase reported by the New York City Housing and Vacancy Survey (HVS) since 1993. As a result the number of apartments in the city renting for up to $1000 monthly declined by 26 percent. In contrast, the median annual income of renters rose by only 6 percent during the same period.

The effect of these trends has been an increase in poor households’ rent burden: the proportion of monthly income that is spent on rent. By 2005 the median burden for all low-income New Yorkers rose to 44-percent of income, compared to 39 percent in 1996. Worse yet, the report found the proportion of households with high rent burdens – paying at least half of their income toward rent – was 39 percent compared to 33 percent ten years ago.

Making the Rent points out that while all low-income renters have been affected by the disparities between rent and income, the plight of the near-poor has particularly worsened since 2002. Their median rent burden rose from 37 to 40 percent, and the proportion of the near-poor with high burdens jumped from 23 percent to 32 percent. Poor renters median burden dropped to 55 percent from 57 percent in 2002 and the incidence of high rent burdens dropped from 65 to 59 percent. 

“What is clear,” adds David Jones, “is that rent regulation does afford some protection from market forces. The research confirms that since 1996 low-income renters in the regulated market have fared better than those in the unregulated sector, and the difference is that much more pronounced when the lower incomes of tenants in regulated rentals is taken into consideration.”

After having so much of their income eaten up by rent, low-income renters have little residual income. The near-poor were particularly affected, experiencing a 14-percent decline in residual income over the last ten years. However, since 2002 both poor and near-poor renters have lost ground as rents overtook gains in income. Poor renters lost 9 percent of their after-rent purchasing power and near-poor renters lost 7 percent.

So what’s left after making the rent? The poor were left with $32 weekly per family member, a sum so low it is hard to imagine how one can survive in New York City.

There are solutions to this dilemma. The first is getting more cash into low-income households. There are several ways to do this: 1) index the state minimum wage so its value is not eroded by inflation; 2) expand the Earned Income Tax Credit (EITC) to include workers presently ineligible; and 3) expand opportunities for job training to increase the earning capacity of low-income New Yorkers.

CSS Senior Housing Policy Analyst Victor Bach raises other considerations. “We must end the discriminatory treatment of renters, who also pay property taxes through rents, and extend to them the same benefits provided to home and apartment owners. This means extending property tax credits and rebates to renters. New York State should enact an enhanced property tax credit (Circuit Breaker) and the city should extend its annual property tax rebate to low-income renters,” suggests Bach.

Making the Rent also recommends:

• Preserving preferential rents
  Restrict rent increases exceeding guidelines of Rent Guidelines Board
• Extending protections to tenants in developments leaving subsidy programs
  Soften blow due to losses of Mitchell-Lama and Section 8 rental units
• Restrict “unique and peculiar” rent increases
  Protect tenants in former Mitchell-Lama units from spikes in rent

In this period of economic recovery, as the growing attractiveness of once discounted neighborhoods in the city increases the possibility of gentrification and rising rents, the state and city must act immediately to preserve housing affordability in New York City and make certain that low-income New Yorkers will be a part of the city’s resurgence.

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