NYC is known as a melting pot of people and jobs,which embraces the hopes of prosperity, opportunity and growth for itsinhabitants. Unfortunately NYC is notoriously known for its cities high levelsof Income inequality, but still a constant flood of U.S citizens and immigrantscontinue to hope to make NYC their home. This continued growth of populationhas caused pressure on the rent and housing market supply, which has notequivalently expanded to meet the needs. The question I am analyzing is whydoes NYC have such a significant housing/rent crisis, and how does theinequality of income distribution in the area have an affect on this crisis? Therelevance of this housing crisis has reached a record high level, having thegreatest effect on the low to very low income earning households and on recentmovers to the area. While NYC faces a mismatch in supply and demand of housing,its rent and housing crisis is heavily influenced and exemplified on the incomeinequality of NYC’s low to very low-income earners.

  Further into the reading I will analyze theeffects and causes of the continued population surge into NYC, and theconsequences recent movers and low-income households encounter with thecompetition and limitation of the supply of affordable housing. I will alsoanalyze the stagnation of median wages in NYC over time and compare it to themismatch of the raising rent and housing levels. I will later address the slowprogression of low-income housing developments in NYC, due to capitalisticconstruction being focused on urbanization and luxury development that favorsthe higher income groups opposed to low income housing developments. Anotherfactor I will address is the inequality of Rent Control, and how long term NYCrenters are protected with exceptional long term rental deals, which help toescalate properties that are unaffected by rent control. One of the largestproblems in rent and income inequality is the repercussion on households beingconsidered rent-burdened households (households that spend an annual grossincome of over 30% on their rent and utilities.

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The low to very low-incomegroups are the groups that have shown to be most heavily affected, and Ibelieve this is one of the largest factors of low-income earner inequality incorrelation to the housing crisis. II. LITERATURE REVIEW/DISCUSSIONTo start the attractiveness andrange of opportunities, work and entertainment that NYC possesses is a maindeterminant of why these large numbers of people are flocking to NYC. Older generationsare tending to retire in the same NYC households, while young families,businessmen and businesswomen actively enter NYC for work and familydevelopment. The problem economist share is that the growth levels on NYCpopulation are not consistent with the growth levels of available andaffordable housing.

Clearly NYC’s land space will not grow just because morepeople wish to live in the city. NYC also has some of the most expensive and strictestcity construction laws, and regulations that hinder and inhibit development;factors of this include limited storing space, constant traffic, density of pedestriansand the increased desire for construction of wealthier clients over low incomedevelopments. Other research conducted through NYC Bureau of labor statisticshas shown the effects of the slow growth of median wages in NYC on theincreasing growth of rent in NYC. “Between 2005 and 2012 (the most recentyear for which consistent data is available), the median monthly rent acrossthe City increased by about 11 percent, after adjusting for inflation. Over thesame time, the real income of the City’s renters has stagnated, rising from$40,000 in 2005 to just $41,000 in 2012”[1]As we can see from the data and figure there is asignificant disparity between the growths of median gross rent and medianrenter income, as rent increases and wages decrease the pressure of livingincreases heavily on NYC residents. The affects correlate to the majority ofNYC renters becoming rent burden residents. The determinants of what isconsidered as a rental burden is, when a renters or households cost of rent andutilities exceeds 30% of their gross income, severely rent burdened householdspay more than 50% of their gross income on rent.

If a renter pays less than 30%of their gross income on rent the rental is considered affordable. The combinedfactors of scarcity of supply of rental properties, stagnant income/wages andincreased cost of utilizes/living have equated to large portions of rent-burdenedhouseholds.  Figure 2 from US data censusshows the percentage of renters faced with increased rent-burdened livelihood. This data from datacensus shows “In 2012, almost 55 percent of all rental households wererent-burdened, which is an increase of more than 11 percent since 2000.”[2]While every income group reaps the effects on the availability ofaffordable crisis the greatest impacts on the crisis of rental burden are onthe low to very low-income groups. The availability of affordable houses forlow to very low-income groups has had little to no growth or development.

Whilemoving seems like a viable option, the process is incredibly costly anddifficult especially with low-income earners and their ability to survive andfind a new job during their relocation process. Low-income earners are stuckwith having to pay large percentages of their gross income just to put a roughover their head. The US census Data and Housing Bureau estimated that therewere approximately one million low to very low income earning householdslooking for rent in NYC but only about 425,000 rentals available that fit intorental affordability for the various income earners bands.                                                                       Figure 3To further demonstrate thegravity of the inequality faced on low to very low-income earners on NYC rentaland housing The US Census on Housing and Vacancy broke down the availability ofaffordable housing and the quantity of affordable rentals for specific renters ineach income distribution group and the gravity to which they are beingaffected.

As you can see in the distribution in figure 4, the low to severelylow-income earner groups have significant percentages of rent-burdened andseverely rent-burdened situations over the higher income earners and theavailability of housing to meet their gross annual income. The higher incomeearners face little to no repercussion of rent burden shown in the graph andthe quantity of rentals is much lower. This distribution shows that thisproblem of inequality is systemic and is growing with the expanding populationand disparity of income distribution. Economist and census surveys havedetermined some of the reasons for this growth in inequality have been presentin the development of NYC construction and its long term affects of rentcontrol.             While some NYCresidents are protected by long standing rent-controlled units, which preventsthe increase of rent and utilities of a renter over period growth, this abilityof rent-controlled units is a very scare and sought after market.

Figure 5 fromRent guideline data reports show how scare rent-regulated units are in NYC, andwith the increased population growth the affects on the declining regulationand mark up of above market wages.  The effects of rent control can alsodramatically increase the prices of unregulated rent controlled areas andespecially new movers who are prone to be charged with much higher rent prices. The reality may be that there areaffordable housing and renting in NYC, new renters just cant get because thetenants hold onto these rentals for over 20 years. When above average incomeearners/renters abuse the affordable housing market by clinging onto rentalsfor extended periods of time they will effectively reduce the supply ofaffordable housing for the new expanding groups of renters making their rentalprices higher to compensate for the rent controlled areas.             Another variable inthe present inequality is in the new construction and development of NYC spaces.

NYC has been known for its leading progression of urbanization especially inthe luxury market, not only does primarily high end construction get donebecause of the high price for land but also the high price of construction workto be done. The price of construction in NYC in alarmingly high due to the longlist of construction requirements, labor union agreements and accommodationsand the limited working and warehouse space available in NYC. As theconstruction process is more complicated in NYC due to these factors andadditional inspections and regulations this translates into forced higher rentcosts. It has also affected the addition of new low-income affordable housingunits becoming developed, because the costs don’t match the returns ofconstructing and buying land with such high value pricing without balancing itout on higher rent costs. The response to high pricing in construction iseither fewer properties are becoming constructed and developed or rent pricesneed to increase. This problem in construction relates to the miss match insupply and demand of the growing population and the slower growth of newlydeveloped building activity in NYC. Figure 5 represents the developments of newhousing construction in NYC and its slowed decline.

                                      Figure 6NYC’s Low to very Low-income groups has relied ongovernment funding and assistance on housing and the dependence of housingowners and subsidy programs to support under market housing prices.  “According to the Subsidized HousingInformation Project maintained by the Furman Center for Real Estate and UrbanPolicy, which tracks the four largest subsidy programs, 68,000 units ofsubsidized affordable rental housing have opted out of those programs over thelast few decades.”[3]The loss of support from Federal funding for housing and the reactivation ofsubsidy programs for affordable housing has had significant impacts onlow-income earners.

In recent years data has shown that NYC has reduced itsfederal funding and voucher regulation for affordable housing. “NYCHA providesabout 91,000 households, and HPD provides about 32,000 households, with HousingChoice Vouchers every year, so maintaining (and indeed, increasing) HUD’sbudget for vouchers is critical to the City’s ability to provide affordablehousing to the neediest families.”[4]If this funding I severely decreased the low-income households will be greatlyaffected by this insufficient funding for distribution of diverse housing. Thedisregard of the effects on the availability and quilting of living of the lowthe very low-income distribution is incredibly apparent.CONCLUSIONIn relation to myquestion “whydoes NYC have such a significant housing/rent crisis, and how does theinequality of income distribution in the area have an affect on this crisis?”It is evident that not only does NYC face additional problems with universalhousings/rent scarcity and increased population growth, but the mostinfluential affects are on those whom are burdened by low to very low incomegross and their ability for affordable rent/housing. Through US housing andwage census data analysis the factors of this inequality lie in systematicstagnation of wages of low-income groups with the increased rental price due tothe ineffective distribution and investment of federal funded housing programsand the development, investment and availability of rentals that low to verylow income earners can access inside the city. Low income households andrenters are thus not protected from unregulated and increasing rents, to stayinside the city renters are forced to pay high rent levels to the point wherethey are becoming rent-burdened.

The percentages of low-income earnings earnersrent-burdened levels compared to higher income earner bands are also a majordetermination of the inequality of the housing crisis. Low-income earners aretrapped in a cycle of paying a large percentage of their gross income to avoidhomelessness. With little regulation or change and the increased population of low-incomeworkers and the demand for housing inequality in NYC housing has become a long-standingproblem, and effectively the largest in determining the inequality ofdistribution of low-income earner groups of people through NYC.Bill DeBlasio and NYC housing have started todevelop a 10 year housing plan that will help regulate and develop largeportions of affordable housing for NYC resident growth. The plan aims todevelop 200,000 more available housing units for low-income earners anddistribute their location to help enhance low-income neighbors and push backthe effects on low-income inequality.

Plans to help diversify the housing ofincome earner bands are included in the 10 year plan, with developing equalspread of new affordable housing in all five of NYC boroughs, with proper localinvestor and construction. The effects of the promotion of a mixed incomeearning households and renters in a community would reap increased improvementson the inequality of low-income communities and their standards of living.    •      [1] Housing New York: A Five-Borough, Ten-Year Plan Bill DeBlasio •      [2] Housing New York: A Five-Borough, Ten-Year Plan Bill DeBlasio [3]Furman Center for Real Estate and UrbanPolicy, Subsidized Housing Information [4] Housing New York: A Five-Borough, Ten-Year Plan Bill DeBlasio