- Average rent in New York just hit a new all-time high of $4,000 per month.
- That's nearly all of the city's median pre-tax income.
- As affordability declines, a coalition of workers has launched a campaign to increase minimum wage.
Rents are rising faster than wages in New York — and that means locals are breaking the bank to call the Big Apple home.
Not even Covid-19 could slow New York down. As the city bounces back from the pandemic's economic toll, residents are returning to NYC and it's pushed rents to new highs.
In the last six months, rents in Manhattan have surpassed historical highs, but in May they reached a new milestone — median rent soared to $4,000, according to appraisal firm Miller Samuel for Douglas Elliman.
For New Yorkers earning the city's median income of $52,409 a year, that average rent works out to nearly 92% of their pre-tax pay. Needless to say, that's way above what financial experts recommend budgeting for housing.
"New York City has rebounded beyond anyone's expectations," Bess Freedman, CEO of Brown Stevens, told Insider. "Even though prices have ticked up and interest rates are higher, people feel safer because of the high vaccination rate and the new Mayoral administration."
The city may be on the up and up, but wages are not
In May, the median rental price in Manhattan grew 25.2% from the previous year. The increase was driven by record demand from the city's prospective buyers. During the month, the amount of new leases increased 48% from 2021 levels. At the same time, the vacancy rate remained below 2% for the sixth consecutive month.
Although the city's housing boom has helped to stimulate the local economy, it's bad news for renters grappling with affordability.
That's because New Yorkers are becoming increasingly cash strapped.
"For many New York workers, the minimum wage has been capped at $15 an hour since the end of 2018 and – as prices have gone up with inflation – the economic squeeze impacting working families has worsened," Latoya Joyner (D-Bronx, 77th AD), chair of the Assembly Labor Committee, said in a press statement. "As a result, New York's low-income workers have been increasingly trapped in a cycle that pushes them further down the economic ladder and into poverty."
To address the issue, a coalition of workers, labor unions, community organizations, and business leaders have launched a campaign to increase New York's minimum wage. Under the name Raise Up NY, the groups have introduced legislation that "answers the demands of working New Yorkers who need and deserve better compensation."
Through Senate Bill S3062C, the coalition wants lawmakers to index annual minimum wage increases to a formula that correlates with the rising cost of living. The bill has yet to be voted on, but if passed, will ensure two million New Yorkers receive raises averaging $2,000 each year, thus pushing minimum wage to $20.45 by 2025.
"Now, more than two years into a pandemic-related economic crisis, rent, inflation, the cost of gas and groceries, and billionaires' wealth have all gone up," Sen. Jessica Ramos, sponsor of the bill and the chair of the Senate Labor Committee (D, WF – SD13), said in a press statement. "The only thing that hasn't kept pace is our wages."