Close to One Third of New York Renters Spend Half of their Income on Rent
It is common knowledge that the cost of living in the New York metropolitan area is not cheap. In fact, it is one of the most expensive areas to live in the United States. Early in 2015, Business Insider reported that Brooklyn, New York, is the least affordable housing market in the United States relative to the average resident’s income. It’s no surprise that Manhattan is also one of the most expensive places to live, with other areas of New York City close behind.
On a national level, it is currently estimated that 25 percent of American renters spend approximately half of their monthly income on rent and utilities. By 2025, this figure is expected to jump to 30 percent. But here in New York, we have already reached – and far exceeded – that statistic for some time. It is reported that approximately 30 percent of renters in New York, California, New Jersey, and Florida spend half their monthly income on rent now. This number, while seemingly high at first impression, takes on even deeper significance when one considers that during the mortgage crisis of past years, federal legislation that was enacted to assist homeowners with mortgage modifications considers one’s monthly mortgage payment to be excessive of its over 32% of their monthly income. Clearly, spending 50% of one’s monthly income – on property rented and not owned – seems exorbitant. When individuals and families have to spend 50 percent of their income to simply live in their homes, they often have to sacrifice other needs like healthier food choices (which are often more expensive), schooling/ tuition, spending on social and entertaining, and sometimes even healthcare. While some laws do exist which try to limit the extent to which rent can be raised, they do not eliminate the ability to raise rent at all, and even small increases on already high rent can still make the cost of living very difficult for renters. Issues about fair rental practices and affordable housing are part of real estate law.
Why is the Rent So High?
Traditionally, rent in the New York area is higher than it is in other parts of the country because it is a desirable location for several reasons. Professionally, New York is generally regarded as the largest business center in the world, with nearly every major company or corporation having an office or headquarters there, if not several. Socially, New York is an epicenter for cultural and artistic interests, boasting an innumerable number of museums, galleries, and venues for dramatic productions, sports events and other cultural events. New York City provides countless job and cultural opportunities for people in the city, as well as those living in the surrounding suburbs in New York State, New Jersey, Connecticut, and even Pennsylvania. The economical principal of supply and demand is seldom better demonstrated than in the New York City housing market: millions of people want to live in New York City, but there are comparatively much less housing available. Therefore, housing prices – including rents – steadily increase, as demand increases, with the supply being far behind.
Today, the issue of prohibitively high rents has another component: inflation and slow wage growth. Over the past three years, rent in New York has outpaced inflation. New York’s current minimum wage of $8.75 per hour shuts low-income workers out of living alone anywhere in the city. Even at the $15 per hour minimum wage proposed for fast food workers last year, rent in most of New York City would remain inaccessible. Workers in lower wage paying jobs may also experience financial difficulty in commuting into the city to work, from surrounding suburbs where the cost of living may be less, as the increased number of travelers and commuters into the city cause the cost of public and private transportation to rise as well
What to Do if you are Having Trouble Paying your Rent
We all run into hard times with work, medical bills, personal debt, and other expenses. If your expenses are causing you to fall short on your rent, be proactive and contact your landlord immediately. Explain the situation and ask if he or she can work with you to accept a partial or late payment. It is always much better to resolve this type of issue by being upfront about it, rather than simply missing your payments and allowing unpaid rent to accumulate. In addition, most leases provide that if your landlord is forced to take legal action against you to collect rent, the Court may force you to pay your landlord’s legal fees – further increasing the amount of money you owe. Allowing yourself to become delinquent with your rent is not only unfair to your landlord, but will reflect poorly upon you as a tenant when you seek new housing opportunities. Falling behind in rent may also be reported on your credit report, and can lead to your landlord getting a judgment against you. Judgments can be enforced against you in a number of ways, including your landlord collecting the money you owe directly from your employer (which is taken out of your paycheck), freezing your bank accounts and taking the money you owe out of your accounts directly from the bank, and having a Sheriff or Marshall seize your personal property, which would be sold to pay off your debt. Falling behind on your rent can lead to various legal problems, without a competent attorney to assist you.
New York Real Estate Attorneys
If you have questions about a real estate or rent issue or you feel you have been a victim of discriminatory housing practices or other illegal action at the hands of your landlord, contact our team of experienced real estate attorneys at Menicucci Villa Panzella Calcagno, PLLC at 718-667-9090 today to schedule your legal consultation with us. We have three convenient locations to serve you better: Manhattan, Brooklyn, and Staten Island. Do not wait to start working on your real estate dispute with our firm.
New York Real Estate Attorney. If you have legal questions regarding Real Estate, Mortgage or are in need of a Real Estate Lawyer in Staten Island, Brooklyn or New York contact the law firm of Menicucci Villa Panzella Calcagno, PLLC for a no cost case evaluation. We are a Real Estate Law Firm with offices in Staten Island, Brooklyn and New York City.
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