Why the Rent Is So High in New York

By Vinayak on Tuesday, September 10, 2013 with 0 comments

In a magazine piece this week (and accompanying blog post), I talked about why many of the goods and services that high-income people consume are cheaper in New York — because it has such a large concentration of high-income people. I also mentioned that the big, glaring exception to this is housing, which is expensive for rich people as well as poor people.
So why is housing so expensive here, and getting even more so?
There are a few reasons. One is that New York has become a much more attractive place to live and work over the last few decades as crime has fallen and other amenities have improved. So demand for apartments here is up — and not just among people who live here full time.
“Manhattan and increasingly parts of Brooklyn are part of the global real estate market, attracting part-time people,” said Richard Florida, director of the Martin Prosperity Institute at the University of Toronto’s Rotman School of Management. “It’s similar to London in that way, where it’s not necessarily Londoners and New Yorkers buying and rent apartments. These are the two places where the global super-rich want to be.”

I asked N.Y.U.’s Furman Center for Real Estate and Urban Policy to look into whether the share of homes in New York that are not primary residences has risen in the last few years. It has:
Housing Units Used for Seasonal, Recreational, or Occasional Use in New York City, 2000-2011
Source: Furman Center analysis of the U.S. Census (2000) and the American Community Survey (2005-2011)
Seasonal units per 1,000 total units
Bronx County, New York2.
Kings County, New York2.
New York County, New York24.442.845.448.930.334.040.548.1
Queens County, New York5.
Richmond County, New York3.
New York City, New York8.812.914.416.011.412.715.718.8
In New York City over all, about 8.8 of every 1,000 housing units (or 0.88 percent) were for seasonal/recreational/occasional use in 2000, versus 18.8 out of 1,000 homes (1.88 percent) in 2011, the most recent year for which data are available. In Manhattan alone, the share of part-time units has nearly doubled over that same time, from 24.4 out of 1,000 (2.44 percent) in 2000 up to 48.1 out of 1,000 (4.81 percent) in 2011.


Category: Real Estate



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