New York’s key workers are empowering the city day in and day out – and the coronavirus pandemic has only explained how much the city depends on this 25% of its workforce.
But for NYC essential workers, providing urban rents average annual income of $ 55,973 it was never easy. To avoid being “rent-laden,” or spending more than 30% of his monthly income on rent, the average essential worker would need to spend no more than $ 1,400 a month on housing.
Record rent declines in 2020 opened up many more housing options for this important group. In 2020, the number of StreetEasy-listed homes affordable for a vital worker has grown by 44% since 2019.
That’s 3,561 additional homes now accessible for health workers, grocery stores, public transportation operators, truckers and postal workers.
However, in order to pay for the average market rate apartment in the city – whose required price was $ 2,600 in 2020 – that essential worker will still have to spend 56% of his monthly income. And a vast 96% of market rate apartments in New York City last year would have the average essential worker paying more each month than they should.
So even after the Covid-19 pandemic brought about historically large declines in urban rents, finding cheap and safe housing remains a terrible challenge for some of New York City’s most vital residents.
Who Are Essential Workers of NYC?
New York’s more than 1 million essential workers are a diverse group in industry and demography. More than half of essential workers are foreigners; 63% are women; and 75% are people of color. These workers often face greater challenges as a result of the city’s ongoing cheap crisis: many no cure, to have long journeys, and lives in overcrowded conditions.
COVID-19 dropped urban rents for the first time since the Great Recession, and caused them to fall at record speed. For the last quarter of 2020, Manhattan rents fell by more than 14% year-over-year, and Brooklyn and Queens rents fell by more than 7%.
But although these declines have certainly increased the number of affordable units at a caregiver or building cleaner’s income, they have not significantly improved the affordable housing challenge faced by these workers.
Wolf Drops Did Not Compensate for the Rent for Many
Between March 16 and December 31, 2020, 11,690 apartments in StreetEasy were affordable for the average essential worker without their rent charged.
That’s 3,561 more units than cheap in 2019, but only 4.1% of StreetEasy’s rental listings. And while StreetEasy may not capture every rental listing available in any neighboring neighborhoods, pricing on the platform represents generally market rents.
Rather than making the city generally more affordable, the effects of COVID-19 exacerbated the rent affordability. Our latest research has found that the a pandemic caused rental prices to fall the most in the city’s most beautiful neighborhoods, and among the most expensive units. Meanwhile, in neighborhoods where many residents are rented, prices have barely changed.
How $ 100 Less Complicates The Home Search 3 Times
Half of the essential workers in NYC earn even less than the average annual income of $ 55,973. For this group, even a small drop in monthly budget can lead to drastically fewer available homes.
For example, the average health worker earns $ 51,866 annually, according to the New York State Department of Labor. This leads to a monthly budget of a maximum of $ 1,300 per rent, only $ 100 less than the average essential worker overall.
However, this $ 100 decrease in monthly housing budgets reduces available options dramatically – from 30,559 affordable housing units in 2020 to just 4,093 housing units.
The fact that a small difference in monthly budget leads to a third of so many housing choices shows the severity of the urban affordable crisis. Apartments under $ 1,400 are simply very rare, both on StreetEasy and in the New York City market as a whole, leaving many essential workers hired.
Rents Did Not Fall Where Essential Workers Live
As our research has shown, rental relationships with pandemics have occurred unevenly across the city. While rents have declined the most in Manhattan, New York’s first workers are alive mainly in Brooklyn (28%), Queens (22%), and Bronx (17%). Only 12% live in Manhattan, with 5% on Staten Island. Another 16% live outside the city.
Many of the neighborhoods where essential workers tend to live – Dyker Heights, Sheepshead Bay, East Flatbush, East New York – have actually lost affordable housing. East Flatbush saw 24% less rental inventory available to the average vital worker in 2020 compared to 2019. In Dyker Heights, that figure was 52%. These neighborhoods are also where residents are most likely to rent loads.
Moreover, most of Manhattan’s newly accessible inventory consists of studios. Considering that 48% of front workers has a child at home, a studio is probably not an ideal option for them.
So while pandemic rents of rents have made New York more affordable to live in, that’s true only in some places. For the 1 million essential workers who take care of this city, last year’s historic fall in rents has made affordable housing just a little more affordable.
How We Did It
Data on essential labor incomes come from the New York State Quarterly Census of Employment and Wages. We defined affordable monthly rent (i.e., non-rented-charged) as annual income divided by 12 multiplied by 0.3, to reflect that tenants who spend more than 30% of their gross rental income are considered rented.
This analysis utilizes more than a million StreetEasy listings published between March 16 and December 31, 2020. We used an advanced statistical process that is based on the methodology behind the StreetEasy Rental Index. The rental rates are monthly rates that track changes in rent for all residential types in New York City on the market, not including public or subsidized housing. These custom-made income indices provide an angle on growth income that is not captured by looking at market medians, and is less susceptible to bias by the types of units available in a given time frame. Each index uses a repeat rate.
To calculate affordability, we used the average market rental rate across New York City between March 16 and December 31, 2020 for units from 1 to more than 3 bedrooms. We calculated: cheap studios (cheap = salary * .3 divided by 12), 1-bedroom (studio * 1.17), 2-bedroom (studio * 1.32), 3-bedroom (studio * 1.56). The multipliers came from the average demand for rents from 1-, 2- and 3-bedroom apartments compared to studios.