Last week, newly minted college grads at CUNY, NYU, Fordham, and Columbia celebrated their achievements across the city. While some students may be relieved to have reached the end of their long, expensive education, many of those staying in or moving to New York City are bound to face a new hurdle: the high cost of housing here in NYC.
Median Asking Rent in NYC Was $2,795 in 2016
A recent study from our friends at Trulia and Indeed found that New York City has one of the highest median incomes and one of the lowest shares of affordable listings in the country for new graduates. According to StreetEasy’s data, the median asking rent for NYC in 2016 was $2,795. Applying the general rule-of-thumb that one should spend a maximum of 30 percent of their income on housing, new grads would need to make $111,800 to afford the median rent in NYC. Making more than $100,000 a year is not a realistic prospect for most new grads, and the scale of the housing challenges they face will vary by their entry-level income, and thus by their occupation.
Grads Can Afford $1,190 on Housing In NYC
We decided to look at housing affordability for entry-level jobs for 122 different occupations in New York state requiring a bachelor’s degree and minimal experience. Median entry-level income of all occupations was $47,630, giving new grads just $1,190 to afford a place on their own if they only spend 30 percent of their income on rent. With these parameters, the neighborhoods that had the most affordable inventory for new grads were:
- Bedford-Stuyvesant, Brooklyn
- Bushwick, Brooklyn
- Astoria, Queens
- Crown Heights, Brooklyn
- Washington Heights, Manhattan
However, grads willing to find a roommate will increase the number of listings they can afford by more than 50 times. For example, assuming that a grad makes the median entry-level income of $47,630, which is roughly the starting salary of a teacher and is paying up to $1,190 in rent, means grads could only afford 473 out of 111,518 (0.4 percent) studios or 1-bedroom listings available on StreetEasy in 2016. For two grads each earning the median income and sharing a 2-bedroom apartment, each could afford 16,707 out of 62,744 (26.6 percent) two-bedroom rental listings in NYC. Similarly, three new grads on the same budget can afford 15,492 out of 27,249 (56.9 percent) of the three-bedroom rental listings in 2016.
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Who Wins? Those With Engineering Degrees
It turns out that nuclear engineers have the fewest constraints with a median entry-level salary of $82,450 leaving plenty of options in hot neighborhoods in Manhattan and Brooklyn. Social science research assistants fall on the other end of the earnings rankings and will have a much harder time getting by with a median salary of just $20,530. For these and others earning lower wages, they will need to spend at least 35 percent in order to afford to rent in NYC. And even using 35 percent of their income, the options are limited to neighborhoods such as Crown Heights, Northeast Flatbush, Brownsville, East New York and Rockaway.
Parts of Brooklyn and Queens Are More Affordable
The rental market is far more affordable in parts of East Brooklyn and Northern Queens. A few neighborhoods, in particular, jump out as grad-friendly, including Bedford-Stuyvesant (Brooklyn), Astoria (Queens) and Bushwick (Brooklyn). With two roommates, even the occupations with entry level income of $29,500, such as radio and television announcers, audio-visual multimedia collections specialists, and biological technicians can afford to live in all these neighborhoods. Doctoral students might want to look to Crown Heights, where there were 16 rental listings available for a graduate teaching assistant’s salary of $25,000. In each of these markets, rental inventory is high and asking rents are low relative to the rest of the city. Within Manhattan, Upper Manhattan neighborhoods – Washington Heights, Central Harlem, East Harlem – stand out as grad-friendly.
New grads looking to live Downtown will have to pay up. You will need to make at least $52,000 – the entry-level salary for an accountant or medical lab technician – to live by yourself in Downtown Manhattan. Yet, even with this income, it only gives two out of sixteen neighborhoods that have more than 10 rentals available in a year.
How Did We Do It?
We used salary information from New York State Department of Labor and limited to entry-level salaries with an occupation that requires at least a bachelor’s degree and less than five years of experience. We calculated monthly rent levels associated with 30 percent of income and the number of rental listings on StreetEasy throughout 2016 that met such rent levels for every neighborhood with sufficient data. For zero roommates, we limited inventory to just studio and 1-bedroom listings; for one roommate, we limited inventory to just 2-bedroom listings; and for two roommates, we limited inventory to 3-bedroom listings.
