Housing Affordability Crisis in New York City

Housing Affordability Crisis in New York City
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Housing Affordability Crisis in New York City
One of the main housing problems in the 21st century is affordability relative to household income. According to Lee et al. (2022), housing affordability has reduced in recent decades, affecting developing and developed economies. The lack of affordable housing has affected housing accessibility among low- and middle-income households. Evidence shows that the ratio of the cost of housing to household income has increased in most countries, contributing to high-cost burdens for housing (Lee et al., 2022). This problem is particularly prevalent in major cities globally. This paper's purpose is to assess the low housing affordability problem in the United States (US) and, more specifically, in New York City (NYC). The paper will also explore the impact of low housing affordability on the elderly living in NYC.
Housing Affordability in the United States
The US is one of the developed economies facing major housing problems. The housing affordability crisis is particularly prevalent in the US. It is characterized by rising housing prices for homeowners and renters. According to Burns et al. (2021), the rate of home ownership in the US has continued to decline since the 2008 Great Recession. This has forced many American families to rent houses, contributing to high rental costs. Also, there has been a decline in affordable housing due to the high costs of land and housing, contributing to low housing affordability (Burns et al., 2021). As such, the lack of affordable housing is a major problem facing the US.
According to a recent Pew Research Center article, the median home sales price has increased in recent years, and the number of active listings in the country has reduced (Schaeffer, 2022). This has contributed to an increase in housing prices and overall spending on housing. In fact, almost half of American renters and about a quarter spend over 30% and over 50% of their income on rent, respectively (Schaeffer, 2022). While spending 30% on rent is within the acceptable limit, more Americans feel that the cost of housing is too high. They are cost-burdened because they must pay more than the recommended amount for housing. According to Schaeffer (2022), in the last five years alone, rent has gone up by at least 18%, more than the rise in inflation. In addition, the incomes generated by households have not kept up with the rising cost of housing, contributing to a housing affordability crisis. The crisis has mostly affected people from low- and middle-income households.
The recent COVID-19 pandemic and the subsequent recession have only worsened the issue. According to the US Government Accountability Office (n.d.), many renters and homeowners in the US have been unable to raise their rental and mortgage payments due to the financial challenges created by the pandemic. Also, Kenan Institute (2023) indicates that the demand for housing went up when people started working from home due to the pandemic, yet, the US needs about 5 million extra homes to meet the demand for housing. This mismatch in demand and supply of housing has further aggravated the housing affordability crisis in the country.
Housing Affordability in New York City
NYC is facing a housing affordability crisis that has been in the making for a decade. According to a recent discussion between the city’s mayor and the citizens, more working families are living in the city, and the housing affordability crisis has limited their ability to access affordable quality houses (City of New York (NYC), 2022). In addition, approximately 60,000 NYC dwellers are on the verge of becoming homeless due to the high cost of housing. NYC has an estimated population of 8,467,513 people and 3,250,657 households (US Census Bureau, 2022). As of 2021, the city had 3,644,000 housing units (New York City Department of Housing Preservation and Development (NYCHPD), 2022). About 33% of these housing units are owner-occupied (US Census Bureau, 2022). The remaining units are renter-occupied.
Many households use a significant percentage of their income on housing. This income does not match the cost of housing. According to NYCHPD (2022), current NYC dwellers would need an income of about $110,000 to afford quality housing, which currently costs $2,750 monthly rent. Yet, according to the US Census Bureau (2022), the median household income for NYC dwellers is $70, 663 and about 17% of the population lives in poverty. This means the city's dwellers spend more on housing than they should or can afford. In fact, the average New Yorker spent $22,174 on housing in 2017 (New York City Comptroller, 2019), which accounts for about 31% of their income. In addition, in the last decade, over half of the city dwellers have spent over 30 % of their income on housing, and a third of them spend more than 50% of their income on the same. This is higher than the national numbers, which indicate that a quarter of Americans spend over 50% of their income on housing (Schaeffer, 2022).
Further, NYC has experienced significant population growth, which the growth of housing units has not matched. For instance, in the last decade, the city's population grew by about 800,000 people, but only 200,000 new homes have been built within the decade (NYC, 2022). The high demand and limited supply of housing leaves many NYC renters at the mercy of landlords. Since housing is a necessity, landlord...