New York University Furman Center Report Examines Housing and Neighborhood Conditions
Over the past three years, housing rents in New York City have risen faster than inflation, and inflation-adjusted incomes have fallen, forcing New Yorkers with low or moderate income to allot a much larger share of their household budget for rent, according to a new report from New York University, The State of New York City’s Housing and Neighborhoods. Prepared by the Furman Center for Real Estate and Urban Policy, a joint initiative of the New York University School of Law and the Robert F. Wagner Graduate School of Public Service at NYU, the report finds that the rate of new construction has outpaced population growth in recent years, but that the number of units available at rents affordable to the 42 percent of the city’s households earning $32,000 or less fell by almost 205,000 units in the last three years.
“Despite a record increase in new construction, housing is still very tight for New York City’s renters,” said Vicki Been, an NYU law professor and the director of the Furman Center. “Although it comes as no surprise that New York City is an expensive place to live, the fact that rents have risen 8 percent after adjusting for inflation in just three years, and at a time when incomes were stagnant, is troubling.”
Moderate income households have fewer housing options, according to the NYU Furman Center’s report. While 58 percent of the city’s total rental housing stock in 2002 was considered affordable to a household earning $32,000 a year (comparable to a firefighter’s starting salary), only 48 percent of the rental stock was affordable to such a household in 2005.
Lower-income residents who live in private market rate housing have been hit the hardest. The median rent burden for these households - the portion of their incomes spent on rent jumped from 43.9 percent in 2002 to 50.4 percent in 2005, far beyond the 30 percent threshold generally considered “affordable.”
The report provides the first independent analysis of the just-released results of the 2005 Housing and Vacancy Survey, a citywide survey of housing and neighborhood conditions conducted every three years by the U.S. Census Bureau for the City of New York. The report also features detailed analysis of 59 neighborhoods within the five boroughs, examining factors such as racial and economic diversity, housing quality, and sub-prime lending, as well as trends in public safety and education.
Some of the report’s most notable findings about the state of the city include:
- Poverty is down citywide, but increasing in many neighborhoods. The percentage of households living below the poverty line fell slightly for the city as a whole, from 17.5 to 17.3, and many neighborhoods saw decreases in poverty. But 35 neighborhoods saw poverty rates increase.
- An increasing share of home mortgage lending is sub-prime. While the volume of both home purchase and refinance mortgage originations has risen since 2002, a growing fraction of these loans are sub-prime. Citywide, the proportion of home purchase loans that are sub-prime more than doubled between 2002 and 2004, from 6.5 percent to 14.9 percent. The sub-prime share of refinance loans increased from 17.1 percent in 2002 to 31.2 percent in 2004. While sub-prime lending may allow borrowers with imperfect credit records to gain access to financing, some subset of these sub-prime loans are predatory and force borrowers to pay unreasonably high interest rates, making them far more vulnerable to foreclosure risk.
- School performance has improved. The percentage of students performing at grade level has increased throughout the city in recent years, with the most dramatic increases in math performance. While 35.3 percent of students in grades 3 through 8 were performing at grade level in math in 2002, 47.2 percent of students were performing at grade level in 2004.
- Crime rates have declined. Felony crime rates have steadily declined throughout the city in recent years. Between 2002 and 2004, the total felony crime rate citywide decreased from 31 to 28.3 crimes per 1,000 residents, the city’s lowest rate since the 1960s.
About the State of New York City’s Housing and Neighborhoods
Recognizing the need for a comprehensive source of information on trends in New York City’s housing and neighborhoods, the Furman Center began publishing this report annually in 2001. Earlier volumes have become the standard reference that policymakers, non-profit organizations, and community leaders turn to for reliable and timely housing and demographic statistics in New York City.
This edition of the report-the 2005 State of the New York City’s Housing and Neighborhoods-can be downloaded free of charge on the Furman Center website: http://furmancenter.nyu.edu. All data included in the reportas well as data on more than 1,800 additional measures of New York City’s housing and neighborhood qualityare also available in the Furman Center’s on-line information and mapping service, the New York City Neighborhood and Information System (NYCHANIS): www.nychanis.com.
About the Furman Center for Real Estate and Urban Policy
Since its founding in 1994, New York University’s Furman Center for Real Estate and Urban Policy has become the leading academic research center in New York City devoted to the public policy aspects of land use, real estate, and housing development. The Furman Center is dedicated to providing objective academic and empirical research on the legal and public policy issues involving land use, real estate, housinhousing,g and urban affairs in the United States, with a particular focus on New York City.