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Housing Burden in New York City

Housing is typically the single largest expense for families—especially in New York City where housing costs peak at some of the highest in the country. When costs exceed income, families experience hardships, often being forced to choose between which basic needs to meet, and which to do without, with near- and long-term consequences. This is particularly problematic with housing, as it is a rigid cost—one must pay all of the rent, every month, or risk eviction. With other costs, one can choose to buy or skip less expensive items, although those choices may result in consequences such as hunger or medical complications. Thus, a housing cost burden leads to stark choices: doubling up, inadequate housing, homelessness, or foregoing other basic necessities (e.g. nutritious food, quality child care, or health care).

As demonstrated in Figure AC, housing represents a critical issue for those living below the True Cost of Living. Housing burden is traditionally defined as:

Affordable housing = No more than 30% of a household’s gross income is spent on rent and utilities.

Housing-cost burdened = Over 30%, but less than 50%, of household income goes towards housing costs.

Severely housing-cost burdened = Over 50% of household income goes towards housing costs.

In New York City, 50% of all households are considered housing burdened (with more than 30% of household income going towards rent). When examining by households with incomes below the TCL, the situation becomes more dire: more than one half (56%) of New York City households with incomes below the TCL are paying more than 50% of their earnings towards housing and another 23% are paying more than 30% but less than 50% of their income towards housing. Together, that means, almost 80% of households below the True Cost of Living are considered housing cost burdened; that is, four out of every five households in New York City struggles to afford rent under this traditional definition.


Source: U.S.

In New York City, 32% of all households have been able to invest in a home. Only 22% of households below the TCL own a home, with the vast majority of both total households and households with incomes under the TCL being renters.

Currently the U.S. Department of Housing and Urban Development (HUD) sets Section 8 housing voucher reimbursement at 30% of a family’s income, defining that threshold as an affordable percentage of a household’s budget. However, when investigating housing as a percentage of the True Cost of Living for households of different compositions, it is clear that the 30% threshold is not exhaustive. Sometimes 30% is insufficient, and sometimes housing represents a lower percentage of a family’s budget due to higher child care or other expenses.

Figure AD illustrates the differences in the housing percentage of a TCL budget for three different family types in Kings County (Excluding Northwest Brooklyn). The cost of housing constitutes 48% of a basic needs budget for a household with one adult. That portion drops to 37% when another adult is added and overall expenses increase, but the cost of housing is divided by two adults. When the household has one adult and two children (with $2,514 monthly child care costs), the absolute costs increase for this family, but the cost of housing as a percentage of the family’s budget drops to 24%. This analysis inspires further investigation on how much money is left in a family’s income after paying for rent and determining whether that amount is sufficient for covering non-rent expenses in the True Cost of Living. This may provide a more accurate understanding of housing cost burden for families with differing expenses.