Introduction
The issue of high rental prices has not only been a challenge in New York, but also in other cities across the United States and other parts of the world. Cities such as San Francisco have also been associated with challenges emerging from high rental prices (Barro, Josh). In fact, the high rental rates have elicited debates among concerned stakeholders, including local governments that have seen the need to engage in the formulation of intervention mentions. Other regions such as the Manhattan as well as Brooklyn have been associated with challenges of high rental prices. In an annual report published by StreetEasy, it is indicated that there is a possibility many New York dwellers could spend almost one-third of their salaries or incomes to cater for rental expenditure (Barro). Besides, certain researchers have argued that the rental prices in New York and its surrounding region will continue experiencing increasing rental prices to an extent that it might supersede individual annual or monthly incomes (Barro, Josh).
This paper seeks to discuss the issue of high rental prices experienced in New York. Besides, it will provide a brief overview of the rental challenges as experienced in New York as well as the various concerns that have been raised in accordance with this issue. It will also discuss why high rental prices are a challenge and the reason for implementation of immediate intervention measures.
Overview of New York Rental Prices
As mentioned earlier, stakeholders such as the StreetEesy have released reports indicating that the affordability of houses in New York has been presented various challenges. These challenges emerge due to the ever increasing rental prices in New York and other surrounding regions. Also, there is a projection that the rental prices in New York will continue experiencing a significant increase to an extent that they may surpass individual monthly or annual incomes. In 2015, many residents of New York spent almost 59.7% of their income to cater for their rental expenditure. A predication has been made indicating that individuals residing in New York may have to increase their rental expenditure to over 65 percent. Moreover, the growth of rental expenditure is also expected to supersede income growth from 2016 and beyond. Areas such as South Brox and Manhattan are also expected to experience a tremendous rental price increase characterized by high rent-income ratio.
In an interview report provided by Jed Kolko, a Chief Economist, one of the reasons that has led to the high retain prices in New York and other places such as San Francisco, is because there is no adequate space (Hughes). New York is characterized by the existence of limited spaces for development. In this regard, property developers and other concerned stakeholders tend to hike property and land prices. Moreover, poor zoning rules have also been associated with the current high rate of rental prices. For example, the zoning rules in New York have developers to eject taller and closely parked buildings so much so that there is no adequate space for future development (Barro). In fact, it is projected that the City may experience dense planning; a significant number of houses in Manhattan are highly packed so that there is no adequate space for future development (Barro). Property developers and investors in the Real Estate industry are taking advantage of these conditions, convincing their clients that there is limited number of houses in the city and that there might not be any future property development (Barro, Josh).
Also, there are high rates of rental price control. According to the United States Census Bureau, many people in New York spend about $1,125, although the average rental rates in New York is $3,000 (Hughes). The United States Census Bureau has agreed that there are various cheap houses in New York, having access to the cheap apartments is a challenging process. This is because the rental pricing structures in the City are controlled; it appears that tenants living in houses with controlled rental structures are not willing to relocate to other regions. ("New Yorkers Will Spend Two-Thirds of Their Income on Rent In 2016 "). In 1997, a report was published by Cato Institute indicating that regions without controlled-rents tend to have medium rents. For example, regions like Philadelphia do not have controlled rents; hence the prices are relatively lower.
The other reason that has led to high rental prices in New York City according to certain stakeholders is because of the high rates of property taxes. Research has shown that New York has the highest taxes on rental properties (Barro). In addition, the ever increasing costs of construction have also been associated with high rental prices in New York. A research published in 2003 indicted that construction prices in entire New York increased by about 19 percent; these costs are expected to continue experiencing tremendous increase (Barro, Josh). From a personal perspective, I believe that having access to affordable and high quality housing is a basic need. This means that the need to provide affordable houses by concerned stakeholders including the government is paramount. The current costs of living as well as the cost of health has gone up; in this regard, it is essential for government stakeholders to formulate intervention measures that would enhance the access of affordable houses.
Work Cited
Barro, Josh. "DEAR NEW YORKERS: Here's Why Your Rent Is So Ridiculously High." Business Insider. Business Insider, Inc, 2013. Web. 25 Apr. 2016. <http://www.businessinsider.com/the-8-reasons-why-new-york-rents-are-so-ridiculously-high-2013-7>.
"New Yorkers Will Spend Two-Thirds of Their Income on Rent In 2016." Curbed NY. N.p., 2016. Web. 25 Apr. 2016. <http://ny.curbed.com/2016/4/21/11477788/this-year-new-yorkers-will-spend-two-thirds-of-their-income-on-rent>.
Hughes, C. J. "New York’s New High-End Rentals." The New York Times. The New York Times, 2016. Web. 25 Apr. 2016. <http://www.nytimes.com/2016/02/07/realestate/new-yorks-new-high-end-rentals.html?_r=0
