Manhattan and Brooklyn Are Much Poorer Than You Think

Commentary about business and finance.
Jan. 9 2014 3:44 PM

Brooklyn’s Median Household Income Is Less Than $45,000

So how can anyone afford to live there?

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History. Whereas housing in upscale suburbs has always been expensive, most urban neighborhoods went through a period of disinvestment, high crime, and “white flight.” Anyone buying in Manhattan or brownstone Brooklyn 40 years ago paid a pittance compared to today. An entire subgenre of gentrification literature consists of stories about people of modest means who bought a building in rougher times and are now sitting on a gold mine—and living in neighborhoods that they could never afford if they were starting out buying or renting today.

Demographics. New York’s foreign-born population has just passed 3 million; nearly 1 million of them live in Brooklyn. Some immigrant enclaves in Manhattan (Chinatown, the Dominican community in Washington Heights, etc.) remain intact, so their census tracts stand out on the map as pockets of relatively modest incomes. Immigrants often afford neighborhoods by squeezing in multigenerational or extended families into small apartments. The average Ecuadorian household in New York City, for example, has two wage earners, versus an average of 1.2 for the city as a whole.

Another key demographic clue to the income figures: New York, especially Manhattan, is a magnet for childless adults of all ages. Nearly half of Manhattan households are made up of just one person. Often, these are people with access to money—their own, or their parents’—beyond their income. Retirees may have a modest retirement income but large savings, especially if they sold a house in the suburbs to buy an apartment in the city. Young, college-educated professionals, aspiring artists, and graduate students may not earn much money, but they can still have more expensive tastes—and more disposable income to fritter away on high rents—than middle-aged parents in the same income bracket. They also require less space than families with children.

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Inequality. There is extraordinary income inequality in New York, and even more so in Manhattan, where the mean income of the lowest 20 percent of households was $9,635, compared with $389,007 for the top 20 percent and $799,969 for the top 5 percent. A relatively small number of luxury apartments catering to the super-wealthy bring up average rents, making them much higher than the median. And those eye-popping average rents are the ones the media lazily reports and repeats, without noting that most people actually pay somewhat less.

Living beyond one’s means. Though all housing prices in New York keep rising, the gains of the current recovery have accrued only to the wealthy, while most residents’ incomes remain stagnant. Consequently, people get pushed into paying more than they can afford for their apartment. According to the census, 64 percent of New York City households pay more than 25 percent of their income in rent and utilities, and 44 percent spend more than 35 percent. Homelessness is also at an all-time high, in part because of the growing gap between incomes and rents. “You have this incredible disconnect, where median income has declined and housing costs have gone up,” says Andrew Beveridge, professor of sociology at Queens College. Beveridge attributes Mayor Bill de Blasio’s victory in part to frustration with the lack of affordability. “The average person is not doing as well in New York,” says Beveridge. “Life is harder for them now than it was 10 years ago.”

So next time you’re at a dinner party and somebody complains that New York has become the sole province of rich white people, you can tell him he’s wrong.

Ben Adler is the climate-change policy reporter for Grist and the news-literacy correspondent for Columbia Journalism Review.

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