If you’ve aged out of your 20s but are still living with roommates in New York (or one of the country’s other most expensive cities), it’s OK to cut yourself some slack about it.
Since spending 30% or less of your annual income on rent is the standard recommendation, those earning $59,631, the estimated median for households in New York City based on the 2017 census, would not be able to afford a median-priced apartment, according to a new report from Apartment List.
Those earning the median income would need to pull in another $16,929 per year, totaling $76,560, to afford a median-priced studio, which costs $1,914 per month, according to the report. New Yorkers need $85,027 per year to afford a median one-bedroom for $2,126 per month, and $101,560 for a median two-bedroom, for $2,532.
From another perspective, the hourly pay needed to float a median-priced one-bedroom in New York is $41, Apartment List found. The city’s minimum wage is $15 for businesses with 11 or more employees and $13.50 for those with fewer.
The outlook isn’t better in other metro areas surveyed by the site, including its hometown of San Francisco, where the annual income needed for the median price of a two-bedroom, $3,096, is $123,440. The estimated median salary in the northern California city is $99,345.
However, the report’s authors said they were most surprised by how expensive it is to live in Newark, where the estimated annual salary is $35,940. Renters in the New Jersey city need an annual income of $42,787 to afford a median-priced studio for $1,070 per month and $57,200 for a median two-bedroom for $1,415.
“Some people think it’s not acceptable to have roommates in your 30s or 40s or when you’re married, but in reality it’s becoming so much more common,” Apartment List chief economist Igor Popov said. “With these rents, no one should feel bad about it. It’s just the way the economy is.”
There are several factors contributing to what some are referring to as a rent crisis in New York, among them being a lack of inventory in the lower-end of the market, which is exacerbated by the demand for it.
Median rents in the five boroughs grew by 13% between 2007 and 2017, Apartment List found, while the median income rose just 4.4%.
New developments, meanwhile, are mostly commanding high-end price points as developers struggle to offset the city’s expensive land and development costs.
New Yorkers opting out of home-ownership puts even more pressure on the rental market. The Apartment List report was released just weeks after another from StreetEasy, which found that New Yorkers earning the median income would need 18 years to save for a down-payment on a median-priced home.