NYC rents grew seven times faster than wages in 2023

Zillow report shows Big Apple bucked national trend in affordability squeeze

NYC Rents Grew Seven Times Faster Than Wages in 2023
(Illustration by The Real Deal with Getty)

New York City is getting even less affordable for renters. 

While rent increases have outpaced wage growth nationally since 2019, that trend reversed itself last year in almost half of the largest United States metro markets, according to a report from Zillow and StreetEasy. But that wasn’t so in New York City, where rents jumped 8.6 percent, while wages grew by 1.2 percent last year, the largest disparity in the country.

“Despite a strong job market in the city, and in some ways because of it, the gap between what a typical renter can afford and the price of rentals on the market is growing,” said Kenny Lee, senior economist at Zillow-owned listing platform StreetEasy. 

New York City rents have risen since 2019 by 27.5 percent, while wages have grown by just 11.2 percent. 

“New multifamily buildings coming online has eased competitive pressure in many markets, but in New York City, construction just simply can’t keep up with demand,” Lee said.

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New York has weathered supply issues, particularly in the wake of the expiration of the 421a tax abatement, which offered exemptions for buildings with 25 to 30 percent of units designated as below market rates. 

New development starts slowed down dramatically after the state let 421a expire, though it recently passed a replacement called 485x, which may catalyze development.

Nationally, rents have grown 1.5 times faster than wages since 2019, according to Zillow’s report. Last year, a surge in multifamily supply helped wage growth (4.3 percent) outpace rent prices, which grew by 3.4 percent. 

Boston saw the second greatest difference between rent and wage increases last year, with rents jumping 5.8 percent and wages shrinking by 1 percent.

The metro areas where wages have fallen behind rent increases the most since 2019 are Tampa (34.7 percent), Miami (32.2 percent) and Indianapolis (30.6 percent). 

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