Wages Fall Behind Rent Increases as New Yorkers Struggle in “Progressive Utopia”

By: Jared Evan 

A new StreetEasy study found that the gap between real wage growth and rent prices in August 2022 stood at 23% after adjusting for inflation.

While it is important to note real estate purchase prices in NYC peaked earlier this year and have started to fall due to rising interest rates, this is not the case for the rental market.

According to StreetEasy, real wages were down 9.1% due to inflation, while rent prices soared 13.4%. The gap now stands as the widest since the 2008 financial crisis, Thrillist notes.

So much for “a more fair New York”, progressive leadership is failing the same people they claim to legislate for, the working and Middle Class.

NY Post reported:

The report notes that less than half, specifically 48.2%, of the city’s 4-million-person workforce earned enough per year to afford just 10% of the rental apartments that listed over the summer — unless they shelled out more than half their earnings on rent.

What is fascinating to note is how during the pandemic rents dropped to record lows before the wild increase resulting in record highs.

NY Post reported in 2021: in Manhattan, for instance, median rents dipped to a new low of $2,700 per month, marking the borough’s cheapest housing price recorded on StreetEasy since the site began tallying in 2010. That figure marks a significant year-over-year drop. By comparison, in the first quarter of 2020, and in the days right before COVID, the median asking rent was more than $700 higher at $3,417 per month.

In Brooklyn, median rents slipped 10 percent year-over-year to $2,390, Queens saw its prices slip to $1,999, the first time they’ve slid below $2,000 in eight years.

That borough’s rents are down 10.5 percent from 2020 to 2021.  Fast forward to August of 2022 and you will see a dramatic swing up, as the NY Post noted:

The latest rental market report from Douglas Elliman and Miller Samuel — a monthly release tracking pricing in Manhattan, Brooklyn, and parts of Queens — which found that median and average rents in Manhattan climbed to a respective $4,150 and $5,113 per month.

Those figures surpass already-historic highs. The June rental report found that the average rental price in Manhattan broke the $5,000 threshold for the first time ever. In May, the median rent price reached $4,000 for the first time.

Many landlords require lease applicants to earn an annual salary equal to some 40 times their monthly rent, otherwise known as the “40 times rent rule.”, the Post pointed out. This makes things increasingly difficult for those who earn barely adequate salaries in an already expensive city.

The StreetEasy analysis found New Yorkers who have food preparation and serving jobs, which typically pay less than $38,000 a year, could only afford 1.3 percent of available apartments in the city.

Health care support workers could only afford 1.9 percent of city apartments on their median annual wage of $38,730, the study found.

These numbers show the difficulty the Middle and Working class have to deal with in the “progressive: Utopia” that is NYC. Politicians on the left have strived for a more “fair New York”, former Mayor de Blasio made this his campaign slogan, and based his entire rise to power on the concept of “a Tale of Two Cities”, the rich and everyone else.