Location affordability includes the cost of transportation as well as housing, usually the two largest items in a household’s budget. According to HUD’s Location Affordability Index (LAI) that measures these two costs, a household paying more than 45 percent of their income for these costs is overburdened.
The CBC found that the combination of New York City’s high rent and extremely low transportation costs brought it to the third most affordable city of the 22 measured. The CBC then measured the location affordability of 7 different rental household types in New York City. The 7 household types were categorized into two groups, moderate-and middle-income households, and low-income households.
For household types in the moderate- and middle-income group, location costs ranged from 27 to 37 percent of income, which are all below the 45 percent affordability threshold. This ranks New York in the top 6 most affordable cities for each moderate- and middle-income household type.
For household types in the low-income group, location costs were much higher, with all three household types exceeding the affordability threshold. Location costs ranged from 47 percent of income for a “Low-Income Family”, to 101 percent of income for a “Very Low-Income Single Worker”, or a single person earning a wage at the national poverty line.
Despite these high percentages, New York City still ranks relatively high compared to the other 21 cities in affordability for low-income rental households, with all three household types ranking within the top 6 most affordable.
source: Mike Slattery, Senior Vice President
REBNY Research Department