The Shelter Bubble

Housing Tighter for New Yorkers of Moderate Pay
By JANNY SCOTT

The number of New York City apartments considered affordable to hundreds of thousands of moderate-income households — with incomes like those of starting firefighters and police officers — plunged by 17 percent between 2002 and 2005, according to a new report by researchers at New York University.

The report, to be released today, for the first time puts hard numbers on a cost squeeze that has intensified with the real estate boom. The researchers found that the number of apartments affordable to households earning about $32,000 a year, or 80 percent of the median household income in the city, has dropped by 205,000 in just three years.

While precise comparisons for earlier periods are not available, this appears to represent the sharpest decline in the number of apartments within the reach of such households since the mid-1990's.

The report also found that while the median rent for unsubsidized apartments jumped to $900 from $750 — a 20 percent increase in three years — the median household income in the city shrank to $40,000 from $42,700.

Whether the rising housing costs are seen as a sign of the city's economic vitality or a harbinger of trouble depends on who is talking. Several economists said they were proof of the city's success: Lots of people still want to live in New York. But housing experts warned that high rents could force workers out of the city or into overcrowded conditions and multiple jobs.

"The market will work through this, but there are people who really lose," said Chris Mayer, director of the Paul Milstein Center for Real Estate at the Columbia Business School. "Whether that's a city problem really depends on how much city government or residents feel this is an inevitable thing they can't fight, or whether they're going to try to do something about it."

New York is a lab for the rest of the country. All of the big cities on the coasts are experiencing the same thing, to one degree or another. The same is true here. I live in a small condo in a first ring suburb of DC. The people who teach in our schools, clean our buildings, drive our taxis and cook in our restaurants have to live an hour away. If I had to buy this condo today, I wouldn't be able to afford it and the property taxes may yet drive me to cheaper digs.