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New data on the challenges of affordable homeownership in New York City
It will surprise very few people to learn that buying a place in Manhattan, even a modest studio apartment, can be an eye-watering experience. But a new study released last week sheds light on just how expensive it has become for the majority of New Yorkers to buy a home in any of New York City’s boroughs.
 The NYU Furman Center/Citi Report on Homeownership & Opportunity in New York City highlights the unique elements of the homeownership market in New York City by analyzing recent home sales data and examining the potential purchasing power of households at various income levels in New York City, as well as the nearby counties of Nassau, Suffolk, and Westchester.
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Most New Yorkers looking to become homeowners face an extremely challenging housing market.
According to the report, more than half of New York City homes are unaffordable to the majority of households -- including those earning up to six figures -- due to the city's severely constrained supply of affordable home buying opportunities. Only 9 percent of 2014 sales were affordable to those earning up to $55,000; yet even households earning up to $114,000 annually – an income segment which makes up 77 percent of the city’s population and includes those earning more than twice the median household income -- could only afford 42 percent of the homes sold in 2014.
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There simply aren’t enough affordable homes for sale.
There were only 33,000 sales across all five boroughs of New York City -- a city of over 8.5 million residents -- during 2014. To put that into perspective, in the Bronx, which has roughly the same population as San Antonio,TX, there were only 8,401 home sales – compared to 22,718 in San Antonio. Only one-third of NYC households own their home, which is the inverse of the national rate of 66 percent.
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“Since 1990, incomes have stagnated while the costs of housing—both rental housing and home sales prices—have skyrocketed. The research suggests that the share of low-, moderate-, and middle-income New York’ers that own their own home may decline over time.”
‐ Mark Willis, Primary Investigator & Senior Policy Fellow at the NYU Furman Center
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Of those who were able to buy, nearly half are in a state of serious financial fragility.
Housing prices rose by nearly 200% between 1990 and 2015, yet real median household income ($53,063) remained 11 percent lower than its 1990 level ($59,499). As a result, the costs of homeownership are draining many families’ financial resiliency: Forty-seven percent of New York City homeowners with a mortgage are considered “housing cost-burdened", which is nearly twice the national rate of 28 percent. More than one in every five NYC homeowners with a mortgage are “severely housing-cost burdened”, and spend half of their income or more on housing costs.
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Data for empowering new approaches to wealth-building
Regardless of your position on homeownership, this data will have implications for both policy and strategy. The findings from this new research demands that we continue to work across sectors on bold new solutions that both expand access to housing that is affordable (for rental as well as purchase), and provide complementary and alternative tools for building long-term wealth and strengthening financial resiliency.
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“In order to respond effectively to the uniquely complex and competitive housing market of the greater New York City area, this new research suggests that we must continue to work across sectors on bold new solutions that ensure all New Yorkers have access to housing that is both safe and affordable – as well as the opportunities to build wealth and assets over the long term.”
‐ Bob Annibale, Global Director, Citi Community Development & Inclusive Finance
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The NYU Furman Center / Citi Report on Homeownership & Opportunity in New York City
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