The report finds that rents in New York City are rising 7 times faster than wages

Rents in New York City are rising seven times faster than wages, making it difficult for low- and middle-income residents to find affordable living arrangements, according to a new market analysis.

Economists from rental listing platforms Zillow and StreetEasy found that the growing gap between average rent and average wage increases in New York City exceeds those in every other metropolitan area in the country.

While New York City’s average wages rose about 1.2% last year, average rents rose 8.6%, according to the report. analysis Zillow rental data and statistics from the U.S. Bureau of Labor. But nationally, average wages have risen faster than rents.

Kenny Lee, an economist at StreetEasy, attributed the rise in rental costs to a severe housing shortage that is leading to a “vicious cycle” of price hikes by landlords.

“The report really highlights the need for action,” he added. “The real historical shortage of supply of affordable homes in New York City has made it difficult for renters to find an affordable place to live in the city.”

The surge in rents comes as millionaires flock to the five boroughs, and median home sale prices continue to rise. New York City now has a higher concentration of seven-figure income earners than anywhere else in the world, according to Modern analysis By consulting firm Henley & Partners. Median home sale prices also rose more than 18% in the D.C. region in the first quarter of the year, according to a report. New data From the National Association of Realtors.

New York state lawmakers last month approved legislation aimed at limiting large rent increases for many renters by allowing tenants to challenge increases of more than 8.5% in most cases. But the new “good cause” law — so named because landlords are supposed to provide a reasonable justification for evicting tenants or raising rents — includes various exceptions and gray areas that have yet to be litigated.

New York City is trying to subsidize more housing for low- and moderate-income renters, but the affordability metrics used to set rents in most of those units fail to match the income levels of most residents. According to a recent study on rents and income By the non-profit Community Service Association of New York.

StreetEasy’s Lee said local renters face another unique affordability challenge that’s not reflected in monthly rents: burdensome broker fees. “Application fees, credit check costs, as well as broker fees can add up,” he said.

However, the report found that over the past five years, the gap between average rents and wage increases in New York City has diminished compared to those gaps in other parts of the country, especially larger cities in Florida.

During that period, local rents rose by about 27.5%, while wages rose by about 11%. But rents in Tampa rose 50%, more than three times the rate of wage increases, according to the analysis. Meanwhile, Miami’s 53% rent increase was more than twice the rate of wage growth there, and Jacksonville’s 37% rent increase was four times the rate of wage increases in the Northeast Florida metro area.

“Florida has already seen the most dramatic shift in affordability in the country,” Lee said.