Tech Workers Want To Live in New York – This is How to Make It More Affordable
Even as New York remains a top destination for tech talent, soaring rents have made it increasingly difficult to find affordable homes in NYC.
Today, we’re releasing new data, in partnership with StreetEasy, that finds tech workers in NYC could afford about one in three (35%) rentals on the market in 2023.
New Yorkers earning the city’s average annual wage are being squeezed even tighter, affording less than 5% of rentals on the market.
Among our other top findings:
Within the tech sector, a worker earning the average entry-level wage could afford 2.1% of studio and one-bedroom rentals in NYC on their own — that’s one out of every 50 available rentals.
Essential workers earning average wages in their occupation could afford less than 1% of rentals in the city in 2023.
“Housing affordability has been a persistent barrier – and top priority – for all New Yorkers, from the essential workers keeping our city running to the tech workers powering New York’s fastest-growing industry. For New York to keep up, we simply must build more housing and make it more affordable, including targeted zoning reforms and lowering costs associated with renting.”
NYC’S HOUSING SHORTAGE INCREASES COSTS FOR EVERYONE
Since the pandemic, spikes in median rent have far outpaced increases in average wages, deepening the city’s housing affordability crisis. Higher costs are pricing out workers across all occupation groups, including early-career tech workers.
As a result, more workers are being encouraged to take jobs in other cities with more affordable options, making it harder for NYC employers to hire and retain the workers otherwise eager to begin their careers here.
In addition, the city has not been able to create enough homes to keep up with demand. The New York metro area's housing shortage has gotten worse over the last decade, with a deficit of more than 380,000 homes.
Our data shows that, in 2022, for each home for sale or rent in the NYC area there were nearly four families in need of a home, compared to two for each home in 2012.
This competition has driven up asking rents: since 2020, the typical rent in the NYC metro area has risen 22% to $3,158, according to the Zillow Observed Rent Index.
SOLUTIONS FOR MAKING NYC MORE AFFORDABLE
Our report offers a number of key solutions that could meaningfully alleviate the housing shortage and bring down costs. Among them:
Targeted zoning reforms: Making it easier to build new housing in underutilized lots near mass transit routes would unlock opportunities to create up to 1.1 million more homes.
Remove parking requirements and other red tape: Requiring new developments to include off-street parking adds $65,000 in construction costs per unit, leading to one unit of housing lost for every 1.2 parking spots.
Increase the floor-to-area ratio (FAR) in Manhattan: Increasing the FAR – the ratio of a building’s total floor area to the area of its zoning lot – by 20% will increase housing capacity in Manhattan by 85,338 from its present capacity of 421,911 housing units.
Reform upfront costs for rentals: High financial barriers created by upfront costs cause a “lock-in effect” making it more difficult for renters to seek other apartments. Reducing the lock-in effect by lowering upfront costs creates expanded choice in the rental market and increased availability as more renters choose to move.
