Posted on July 17, 2012 by PATRICK MARKEE A bracing new report reminds us of the major structural cause of record homelessness in New York City: The widening gap between incomes and apartment rents. The Community Service Society’s report, Making the Rent: Before and After the Recession, written by Vic Bach and Tom Waters, analyzes U.S. Census Bureau data going back to 2005 and shows how the gap between NYC renter households’ incomes and apartment rents has grown wider and wider. And while the affordability crunch has been particularly hard on low-income New Yorkers generally, poor renters have suffered enormously. By 2011, 49 percent of all low-income renters had high rent burdens (that is, paid more than half of their incomes towards rent), while an astounding 80 percent of poor tenants had high rent burdens. In fact: After rent, poor renters in the private, unassisted rental market were left with an average of just $4.40 per household member per day to pay for food, transport, medical and education costs, and all other necessities. Only $4.40 a day to get by in NYC? While this is the sort of thing we see everyday here at Coalition for the Homeless, it’s one of those stats that is still shocking to many New Yorkers – and speaks to worsening income inequality citywide. Of course the widening housing affordability gap is at the heart of the record homelessness crisis in New York City. Simply put, poor and low-income families and individuals are priced out of the housing market. And like an inexorable game of musical chairs, more and more affordable housing units are lost each year, at the same time that high unemployment and the lingering economic crisis are driving more and more families into poverty. New York City’s worsening housing affordability crisis is the “elephant in the room” of municipal homeless policy. And it underlines the catastrophic failures of Mayor Bloomberg’s approach to record homelessness, especially his continuing refusal to provide vital Federal housing assistance to help homeless kids and adults escape the shelter system. Following is a summary of the key findings in the Bach and Waters report, which is must-reading for anyone interested in NYC homeless and housing policy: • Rent levels rose persistently throughout the six-year period—during good economic times or bad—outpacing the income gains made by low-income tenants. Median contract rents rose by 25 percent, overtaking a net income gain of only 17 percent. • Low-income tenants who did not benefit from Section 8 vouchers experienced a rapid increase in rent burdens—the portion of household income paid for rent—from 45 to 49 percent of income over the six-year period. The proportion of these tenants paying at least half their income toward rent increased dramatically, from 41 percent to nearly half (49%). Among the poor, rent burdens escalated from 60 to 65 percent of income; the proportion paying 50 percent or more of income spiked from 66 to 80 percent. • Low-income tenants without Section 8 vouchers experienced a net 10 percent decline in real per capita residual income—the income remaining per household member once rent is paid that is available to meet other needs. For the poor, the decline in residual purchasing power was steeper, a 16 percent reduction, leaving them on the average with a meager $4.40 daily per household member to pay for food, transport, medical and educational costs, and other necessities. The near-poor were also adversely affected, experiencing a net 7 percent decrease in per capita residual income over the six years. • A widening gap between rents and incomes was evident in both regulated and unregulated apartments. Even in regulated units, low-income tenants without vouchers experienced a median rent increase of 28 percent over the six years, against a net income increase of 22 percent. Tenants in regulated rentals tend to have lower rent burdens than those in unregulated units, but persistent increases in regulated rent levels over the six years have worsened the high rent-income pressures they were experiencing before the recession. • Most of the increase in rent burdens occurred between 2005 and 2008 before the recession struck. This pattern suggests that escalating market rents, good times or bad, have had a greater impact on the budgets of low-income New Yorkers than post-recession declines in employment and income. The escalating rental market throughout the six-year period, compounded by a troubled post-recession economy since 2008, has been disastrous for low-income tenants trying to survive in these difficult times.
