Monday, January 07, 2008

Where Will All The New Yorkers Go?

No this isn't a story about I Am Legend, the eight million plus people here aren't going to disappear or turn into zombies. The problem here is more financial than Hollywood sci-fi. With all of the gentrification going on here in the city and out in the boroughs, New Yorkers are finding it harder to find decent places to live as the rents and real estate prices keep rising. We're not even talking about those in the lower income brackets, these are "middle class" families that are making $80 to $150K a year.

From Crain's New York:

Living in the city is becoming more unaffordable for the middle class, and not just in trendy Manhattan neighborhoods, where a two-bedroom apartment can cost about $1.5 million or rent for $3,500. Gentrification in parts of Brooklyn, Queens, Harlem and upper Manhattan is putting former middle- and working-class neighborhoods out of reach for many people.

Add a city and state tax burden that can approach 12% of income, and New Yorkers are being priced out of the city, which they don't want to leave.

"For middle- and working-class families, [the city] is unaffordable—increasingly unaffordable," says Vicki Been, director of NYU's Furman Center for Real Estate and Urban Policy.

Living in New York City has always been expensive, and that's the price people pay for its opportunities and vibrancy. But over the past decade, the cost of housing—the largest budget item for most middle- and working-class households—has been rising more steeply than ever. New developments are targeted primarily at the high end of the market, and the mayor's affordable housing program doesn't include a large segment of middle-income households. At the same time, rezoning has limited development in many middle-class neighborhoods.

So while the Mayor isn't doing much in the way of assistance, people are looking towards 2009 and the next Mayor who could possibly solve the real estate woes. Rent stabilization is being eroded by landlords desperately looking to cash in on the real estate boom. Those coveted apartments below market rate are disappearing at a rate that is higher than ever. So Comptroller William Thompson and Congressman Anthony Weiner are already using this issue as their central theme. What they'll do about it once in office, is yet to be seen though.