High Rents Consume Family Income

Last year, a survey of low-income New Yorkers conducted for the Community Service Society (CSS) asked the question: “What personally worries you the most?” The leading response was housing. No wonder. High rents are the frontline economic issue for low-income families. Housing is their largest single monthly expense.

From data drawn from the Housing and Vacancy Survey of 2002, CSS estimates that 65 percent of New York City families with incomes under the federal poverty line – 200,000 households - paid at least half of their income toward rent. On average, that leaves less than $30 a week per family member for all other expenses, such as food, utilities, transportation, and medication. This makes it almost impossible for poor New Yorkers to pay their rent and still survive in the city.

The triennial Housing and Vacancy Survey (HVS) is carried out by the U.S. Bureau of the Census. The CSS analysis included only households in the 25 to 65 age range.

Housing is largest
monthly expense

About 61 percent of poor New Yorkers – 317,000 households - live in private, unassisted rental housing. Another 26 percent – 137,000 households - live in subsidized rental housing — public housing, Section 8 housing, and Mitchell-Lama rentals. Only a relatively few (14% - 71,000 households) own their homes or apartments.

The largest block of poor households – 219,000 - lives in regulated rental housing, subject either to rent stabilization or rent control. This underscores the role of rent regulation in preventing the city from becoming a place where only the wealthy can afford to live. Even so, rent burdens for low-income families are severe in regulated apartments. Three-quarters of these households pay at least half their income for rent.

Housing Hardships

The burden of paying such a high percentage of income toward rent has dire consequences for poor New Yorkers. Our survey found that close to half (43%) the poor experienced at least one housing hardship, most commonly falling behind on rent payments. Twenty-nine percent (29%) reported multiple housing hardships, including having their electricity or utilities cut off, doubling-up with other households, or moving into a shelter.

These are families that don’t have much margin for the unexpected. Our survey found that one out of three poor New Yorkers has less than $100 in savings. Half have less than $500. Most live from paycheck to paycheck. Any emergency – a hospital visit, the loss of a job – will force many of them to the brink of homelessness. And as tough as the situation is for families trying to survive on incomes from low-wage jobs, it is even worse for those New Yorkers – many of them elderly - living on fixed incomes.

These stress factors help account for the high rate of housing hardship we observed in the survey, as well as chronic rent arrears that generate a high volume of nonpayment actions in housing court, families doubling-up, the personal and social costs of evictions, and, ultimately, the record number of homeless New Yorkers.

Rent Guidelines Board

The city’s Rent Guidelines Board is again considering increases in rent for rent-stabilized apartments. The Board’s mission is to set fair and reasonable rent guidelines. It must take into account the owners’ costs of housing maintenance and operation on the one hand and, on the other, the capacity of tenants to meet prevailing rents. The high rent burdens already carried by poor New Yorkers, even in rent-regulated apartments, argue that any increases in rent proposed by the Board should be kept to a minimum.
Affordable housing in the city is shrinking at an alarming rate. In the last decade, about 44

percent of apartments renting for less than $500 a month have been lost to rent increases.
Mayor Bloomberg is on record with a plan to create 65,000 affordable apartments in the next three years. But what about New Yorkers currently stretched to the financial breaking point with rent payments? At a time when Washington’s housing policies have never been so openly hostile to lower income Americans, it is the city’s duty to protect these New Yorkers who cannot hire lobbyists or make financial contributions to officeholders.

A more comprehensive analysis of housing burdens on poor New Yorkers, based on the HVS survey, will be available in a report to be released by CSS in June 2005.

From the New York Amsterdam News
April 21 - 27, 2005