Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: You know that little social media memes like you walk
Speaker 2: outside New York City just to breeze, you spent seven
Speaker 2: hundred bucks.
Speaker 3: Shanee Benjamin grew up in Knarsi, Brooklyn. She left the
Speaker 3: city as a teenager, but came back in twenty thirteen
Speaker 3: to start a career as a professional illustrator and art director.
Speaker 2: I moved to Crown Heights technically like the border of
Speaker 2: Crown Heights a week ago, and I was lucky. I
Speaker 2: got a run stabilized apartment for eleven ninety five.
Speaker 3: But several years and apartments later, her life in New
Speaker 3: York is getting harder to sustain.
Speaker 2: I have vivid memories of being on Craigslist circut twenty
Speaker 2: thirteen and looking at a one bedroom for five hundred
Speaker 2: bucks off at Eltdop in Williamsburg. Now knowing that that's
Speaker 2: an apartment that I saw, and now sitting pretty for
Speaker 2: like maybe close a five k is just rediculous.
Speaker 3: Shane still lives in Crown Heights, two bedroom with a
Speaker 3: backyard that she upgraded to in twenty twenty one. She
Speaker 3: pays thirty two hundred dollars a month and her landlord
Speaker 3: just told her she's raising the price to fifty five
Speaker 3: hundred dollars a month. Rather than swallow the rent increase,
Speaker 3: Shanee decided it was time to find another spot, preferably
Speaker 3: one in park Slope with some extra space.
Speaker 2: I have key puts, so having a backyard is great,
Speaker 2: you know.
Speaker 3: But this time around, her apartment search has been rougher
Speaker 3: than she expected.
Speaker 2: I make decent money as an illustrator. I'm making around
Speaker 2: one fifty a year, and I am shoggling with find
Speaker 2: a two legroom with an outdoor spee that isn't like
Speaker 2: forty five hundred five thousand by.
Speaker 3: A lot of standards. Shanee makes a competitive salary, but
Speaker 3: her story highlights a new reality in New York City
Speaker 3: in the wake of unprecedented rent hikes. The rent is
Speaker 3: too damn high, even for high earning New Yorkers.
Speaker 4: Since the pandemic, the city has changed quite a bit,
Speaker 4: and in time we've seen rents rise as high as
Speaker 4: sixty percent in some neighborhoods.
Speaker 3: Paulina Cacero is a real estate reporter for Bloomberg.
Speaker 4: According to the most recent New York housing vacancy survey,
Speaker 4: they found about sixty five thousand households those earning between
Speaker 4: one hundred k and three hundred k paying a third
Speaker 4: or more of their gross income towards rent. That's tens
Speaker 4: of thousands more than just four years ago. The golden
Speaker 4: rule of thumb is that you shouldn't spend any more
Speaker 4: than a third of your income on rent. So it's
Speaker 4: really changing the way that people think about New York City,
Speaker 4: what kind of life they can afford, and for some people,
Speaker 4: the long term sustainability of living here.
Speaker 3: I'm Sarah Holder, and this is the big take from
Speaker 3: Bloomberg News Today. On the show, If six figure earners
Speaker 3: in New York can't make it there, who can? How
Speaker 3: a squeezed rental market is fueling the affordability crisis in
Speaker 3: America's largest city, and how some are proposing to fix it.
Speaker 3: It's no surprise that renting in New York right now
Speaker 3: is expensive, but Bloomberg real estate reporter Paulina Cacero says
Speaker 3: there's something new about who is starting to feel the
Speaker 3: burden of high rents New York's growing upper middle class.
Speaker 4: This is a group of people that you might expect
Speaker 4: to have some kind of financial security, but they're really
Speaker 4: being impacted by the rent squeeze.
Speaker 3: Now, I think some people might hear that higher earners
Speaker 3: in the city, people making between one hundred thousand and
Speaker 3: three hundred thousand dollars a year, feel like they can't
Speaker 3: afford rent and kind of scoff at it a little bit.
Speaker 3: It's like, okay, but you're making a lot of money,
Speaker 3: Like it's okay, But what is the takeaway here? If
Speaker 3: it's harder for someone making six figures to find a
Speaker 3: spot without paying more than thirty percent of their income
Speaker 3: on rent, what does that mean for everyone else.
Speaker 4: Part of what's been driving up rents in the city
Speaker 4: and what economists have been observing since the pandemic is this.
Speaker 5: Idea of the great reshuffle.
Speaker 4: Right, So, during the pandemic, COVID nineteen lockdown shuttered offices.
Speaker 5: People who had.
Speaker 4: The means, More often than not, white collar workers were
Speaker 4: able to leave the city, and that provided a rare
Speaker 4: opportunity for some people to get COVID deals. They moved
Speaker 4: into neighborhoods that weren't really affordable to them, like West
Speaker 4: Village or Tribeca. But as the city kind of returned
Speaker 4: to normal. See, these higher earners, they came back, and
Speaker 4: actually they came back in a big way, and that
Speaker 4: trickles down, right, So that's raised the prices of rents
Speaker 4: for everyone. Not to mention, a lot of landlords were
Speaker 4: having to make concessions to get apartments leased. They saw
Speaker 4: all of this demand as people were flooding back to
Speaker 4: the city as an opportunity to recoup some of those
Speaker 4: COVID nineteen losses, and that's when you saw these immense
Speaker 4: rent hikes in twenty twenty two.
Speaker 3: Under other circumstances, these higher earning residents might have come
Speaker 3: back to the city and looking to purchase a home,
Speaker 3: not rent one. But that's gotten harder too.
Speaker 4: People that might have already transitioned out of the rental
Speaker 4: market are still in the rental market, and they have
Speaker 4: more means to pay higher rents as well.
Speaker 5: There's just more people renting.
Speaker 4: It's about like two thirds of New York City's population
Speaker 4: is renting, and that's kept pressure on the rental market
Speaker 4: as well.
Speaker 3: Right, it's more competition, especially from these higher earners.
Speaker 5: Yeah.
Speaker 3: I think I read somewhere that the amount of millionaires
Speaker 3: in general in the country who are renting is higher.
Speaker 4: Yeah, the number of millionaire renters in New York City,
Speaker 4: I think has doubled since twenty nineteen.
Speaker 3: That kind of says it all. Yeah, the number of
Speaker 3: New York City millionaires, renter or otherwise has reached record
Speaker 3: highs in recent years. Some estimates suggest that as of
Speaker 3: twenty twenty three, one out of every twenty four New
Speaker 3: York City residents is worth seven figures or more. But
Speaker 3: as wealthy New Yorkers become even wealthier, lower income residents
Speaker 3: are being pushed farther into the outer boroughs or beyond,
Speaker 3: especially families kids who are more than twice as likely
Speaker 3: to move out of the city than households without.
Speaker 4: Those people that are leaving the city are primarily from
Speaker 4: the city's working class people making less than sixty thousand
Speaker 4: dollars a year, because the cost of living in New
Speaker 4: York has just become untenable for them.
Speaker 3: So you're describing a really interesting dynamic, Like the amount
Speaker 3: of higher earners in the city is increasing, the amount
Speaker 3: of working class folks moving out of the city is increasing. Meanwhile,
Speaker 3: rent is getting less affordable for everyone across that income spectrum. Yeah,
Speaker 3: including for renters like Shane.
Speaker 2: Before once fifty k you could have savings you can travel,
Speaker 2: you know, you could be comfortable in New York. And
Speaker 2: now I feel like we're all just penny pinsion, penny pension.
Speaker 2: And so when other folks from other different cities and
Speaker 2: states listen to us complain about who would show out
Speaker 2: one hundred and fifty K, and I'm like, yeah, live
Speaker 2: in New York brouh.
Speaker 3: One of the fundamental issues driving rents higher is a
Speaker 3: nationwide housing shortage, a shortage that's especially potent in New York.
Speaker 3: Between twenty ten and twenty twenty three, New York City
Speaker 3: added nearly nine hundred thousand jobs, but just under three
Speaker 3: hundred thousand new homes. That means more New Yorkers are
Speaker 3: vying for a limited number of units, and Paulina says
Speaker 3: that economics play a big role in swaying what kinds
Speaker 3: of homes are being built.
Speaker 4: The developer community in New York City points to the
Speaker 4: macro economic conditions.
Speaker 5: Right, there is very little land in New York City.
Speaker 4: Construction and labor costs have gone up along with inflation,
Speaker 4: and they can't get the financing or the funds together
Speaker 4: to build in the first place. If they're not building
Speaker 4: housing that's more expensive, right, it's what they say pencils
Speaker 4: out for them.
Speaker 3: One example is Long Island City, a neighborhood in northwest
Speaker 3: Queens that's seen a lot of development attention over the
Speaker 3: last few years. From twenty twenty to twenty twenty four,
Speaker 3: nearly seventy two hundred net new apartment units were added,
Speaker 3: the majority of them in high rises with elevators.
Speaker 4: We talked to a resident who had moved there in
Speaker 4: nineteen eighty nine. She spent about four hundred dollars for
Speaker 4: a two bedroom and a walk up and.
Speaker 3: How times have changed.
Speaker 5: Times have changed.
Speaker 4: If you've been to Long Island City, now you get
Speaker 4: off at Court Square, there's a sweet green, there's these tall,
Speaker 4: luxury high rise buildings, and that's driven up the rent
Speaker 4: quite a bit.
Speaker 3: New developments now make up nearly a third of the
Speaker 3: rental market in that part of Queen's and median rent
Speaker 3: in those buildings is six hundred and twenty five dollars
Speaker 3: higher a month than a typical apartment.
Speaker 4: It's just an example of how these developments can continue
Speaker 4: to drive at prices and also attract a new type
Speaker 4: of resident.
Speaker 3: Emily Eisner, the chief economist at the Fiscal Policy Institute,
Speaker 3: says the city's constrained housing supply plus its growing supply
Speaker 3: of high earners are exacerbating the housing crisis. From individual
Speaker 3: property owners to larger management companies. Landlord's take into account
Speaker 3: a variety of factors when they set rent, but Emily
Speaker 3: says some end up setting them so high in part
Speaker 3: because there are enough New Yorkers who are willing to pay.
Speaker 6: The landlord can potentially charge you know, three thousand dollars
Speaker 6: a month, let's say for a one bedroom, and that's
Speaker 6: going to push out the like, you know, family with
Speaker 6: a young kid that makes I don't know, let's say
Speaker 6: combined two hundred thousand dollars a year and has to
Speaker 6: pay for childcare because there is demand for the unit
Speaker 6: coming from someone who has fewer overall expenses and a
Speaker 6: high enough income to.
Speaker 3: Pay Paulina How unique is New York here though? How
Speaker 3: have other cities rental landscapes changed in the last few years.
Speaker 3: Have they seen a similar sort of bounce back of
Speaker 3: pandemic rents?
Speaker 4: You know, these boom towns like Austin or even like
Speaker 4: in Florida where people moved during the pandemic, their rent
Speaker 4: price is soared in twenty twenty and twenty twenty one,
Speaker 4: but have.
Speaker 5: Since started to fall.
Speaker 4: And that's true like across the Midwest and the Sun
Speaker 4: Belt where people moved to in San Francisco, housing costs
Speaker 4: dropped and haven't recovered as much. So New York City
Speaker 4: is pretty unique in how rents have continued to rise
Speaker 4: and actually, for like most of the months this year,
Speaker 4: Manhattan run prices have continued to hit a record high
Speaker 4: in the summer four seven hundred dollars a month, which
Speaker 4: is pretty crazy.
Speaker 3: With housing costs this high, New Yorkers are looking for solutions.
Speaker 2: After the break.
Speaker 3: How the issue has reshaped the race for New York
Speaker 3: City Mayor and the proposals on the table to make
Speaker 3: rent more affordable across the board. In November, New Yorkers
Speaker 3: will head to the polls to vote in the mayoral election.
Speaker 3: The race has captured national attention after the upstart Democratic
Speaker 3: Socialist State Assembly member Zoron Mondani dominated the Democratic primary
Speaker 3: in June. Meeting former New York Governor Andrew Poma.
Speaker 1: Today, eight months after launching this campaign with the vision
Speaker 1: of a city that every New Yorker could afford, we
Speaker 1: have won.
Speaker 3: Wow, and with just a month to go, until the
Speaker 3: general poles show Mom Donnie leading by around twenty points.
Speaker 3: Bloomberg Real Estate reporter Paulina Cacerro says that one reason
Speaker 3: Mom Donnie's message is resonating is because housing affordability issues
Speaker 3: are at the top of voters' priority lists, and they're
Speaker 3: also central to Mom Donnie's campaign.
Speaker 5: We saw that.
Speaker 4: A lot of the folks that voted for Mom Donnie
Speaker 4: were like middle class and higher earners in the city
Speaker 4: and people that also tended to rent. So if you
Speaker 4: take a look at Greenpoint, which is this neighborhood in
Speaker 4: North Brooklyn that was once known for its industrial roots
Speaker 4: and kind of Polish immigrant community, saw a flood of
Speaker 4: white colored workers in the past couple years, and rents
Speaker 4: jumped fifty percent from twenty twenty to twenty twenty four,
Speaker 4: and roughly seventy two percent of Democratic voters in the
Speaker 4: area voted for Mom Donnie. Other in demand neighborhoods where
Speaker 4: rents have risen quite a bit also overwhelmingly voted for
Speaker 4: Mom Donnie, including Soho, Brooklyn Heights, and Long Island City.
Speaker 4: So you can see how this rent affordability question has swayed.
Speaker 4: You know, a lot of renters and renters in affluent areas.
Speaker 3: Mom Donnie's proposals include constructing two hundred thousand new affordable
Speaker 3: units over the next ten years and freezing rent increases
Speaker 3: on all rent stabilized apartments. Those are units that have
Speaker 3: limits on how much the rent can increase every year,
Speaker 3: which are set by the city's rent Guidelines Board. Here's
Speaker 3: Mom Donnie talking about his policy proposals on her sisters
Speaker 3: show odd Lots in May.
Speaker 7: In tandem, I am both a candidate who believes we
Speaker 7: need to freeze the rent for rent stabilized tenants, and
Speaker 7: one who believes that we need to end the requirement
Speaker 7: to build parking lots when reconstruct housing, who believes we
Speaker 7: need to increase densitery around mass transit hubs. We need
Speaker 7: to up zone wealthier neighborhoods that have historically not contributed
Speaker 7: to affordable housing production.
Speaker 3: Of course, not everyone is lucky enough to find a
Speaker 3: rent stabilized apartment that would be affected by a potential
Speaker 3: rent freeze that Mom Donnie is proposing. So what explains
Speaker 3: why these policies have resonated with such a broad coalition
Speaker 3: that includes higher earners.
Speaker 4: I think most people know that the rent freeze policy
Speaker 4: would only apply to the New York citi's about one
Speaker 4: million rent stabilized units, but even then, I think it's
Speaker 4: created this kind of solidarity among renters.
Speaker 3: Other candidates have put forth their own housing agendas, albeit
Speaker 3: ones that have gotten less traction. Quomo says he'll prioritize
Speaker 3: quote aggressive affordable housing development, while Republican candidate Kurtis Leiwa
Speaker 3: has centered the needs of small landlords. The city's current mayor,
Speaker 3: Eric Adams, has dropped out of the race, but had
Speaker 3: been highlighting his role in passing a citywide zoning overhaul
Speaker 3: called City of Yes, a plan that's designed to allow
Speaker 3: more development in more places and supposed to unlock an
Speaker 3: estimated eighty thousand units of housing over fifteen years.
Speaker 6: We see that as a really good start, but not enough.
Speaker 3: That's Emily Eisner, again, the chief economist at the Fiscal
Speaker 3: Policy Institute.
Speaker 6: The city needs something on the order of five hundred
Speaker 6: thousand more units over the next ten years, and I
Speaker 6: want to be clear that that includes both market rate
Speaker 6: housing and affordable housing.
Speaker 3: Up Zonings and incentives that push developers to build affordable
Speaker 3: units can spur some of that growth, But Emily says
Speaker 3: there also need to be efforts to preserve the affordable
Speaker 3: housing that already exists.
Speaker 6: Sometimes the affordable housing sort of either leaves the affordability
Speaker 6: zone and goes into market rate, or some of the
Speaker 6: buildings are sort of going to disrepair. So we need
Speaker 6: to see various efforts to sort of keep those housing
Speaker 6: units livable and also keep them affordable.
Speaker 3: And Emily also pointed to policies designed to keep tenants
Speaker 3: in those affordable units, policies like eviction protections that she'd
Speaker 3: advocate for expand to cover more renters. As for Shaney,
Speaker 3: she's starting to feel like the grind to find housing
Speaker 3: in New York that meets her needs and fits her
Speaker 3: budget might not be worth it anymore.
Speaker 4: She's had a lot of friends who moved to the
Speaker 4: Sunbelt region North Carolina, South Carolina. As a native New Yorker,
Speaker 4: it's not something that she thought she would ever have
Speaker 4: to entertain.
Speaker 2: My life in a city has been amazing. I've been
Speaker 2: able to carry a single household for over a decade
Speaker 2: in New York City by myself. I think New York
Speaker 2: has actually brought me more opportunities than I would have
Speaker 2: had if I had stayed at Pittsburgh for college. The
Speaker 2: only difference is that I would have rather been more
Speaker 2: of a homeowner now at this age. But New York
Speaker 2: is kind of like stopping you from a little bit.
Speaker 4: It's just not a sustainable place. She can't have the
Speaker 4: life that she wants to live, even though she, for
Speaker 4: all intents and purposes, like made it cheap. She did
Speaker 4: everything that she thought she was supposed to do.
Speaker 2: The city is a good grip on you, but it
Speaker 2: has caused me to like look long term future, like
Speaker 2: what would life be like at other cities where I
Speaker 2: can afford a home.
Speaker 3: This is the Big Take from Bloomberg News. I'm Sarah Holder.
Speaker 3: To get more from The Big Take and unlimited access
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Speaker 3: Thanks for listening. We'll be back tomorrow.