A new study from New York University’s Furman Center found that more people are renting, rents are increasing and more affluent people are becoming renters. Do these trends hold in Rochester? The study provided other insights into the Rochester rental market.
More people are indeed renting in the Rochester region. Between 2006 and 2015, the Rochester area added about 15,000 renting households, made up of about 35,000 additional renters. The share of all households that rent went from 30.5 percent to 32.8 percent during this time.
Rents are not going up. Bucking the national trend, the median rent in Rochester declined between 2006 and 2015, from $880 to $860 for a two-bedroom (2015 dollars, adjusted for inflation). However, recently available two-bedroom apartments are $70 more expensive. That’s known as a rent premium. The rent premium for a one-bedroom is only $10.
More middle and higher income people are renting. The share of people earning more than 120 percent of the median household income – $64,200 in 2015 — who decided to rent stayed relatively flat between 2006 and 2015. But this group of renters increased in number by about 2,200. The only income group that saw a big shift toward renting was those earning between 80 and 120 percent of the median household income — $42,800 to $64,200 in 2015. The share of renters in that income group went from 23.7 to 30.8 percent, adding about 4,400 households.
The trend of middle and higher-income households living in rentals could be attributable to tighter qualifications to get a mortgage and lifestyle choices. Whatever the reason, that’s 6,800 additional higher-income renting households in the Rochester area.
But half of Rochester’s renters are struggling. Half of renters are considered “burdened,” meaning they pay more than thirty percent of their incomes in rent. Twenty-seven percent of renters are “severely burdened,” meaning they pay more than half their income for rent. Rochester ranks in the top ten among the largest 52 metro areas for the proportion of both severely burdened and burdened renters.
Most apartments are out of reach of the poor. Half of renters earned less than $27,600 in 2015. If they looked for an apartment, they would have found only 28.5 percent of recently available units affordable. Units with more than one-bedroom command a premium when they come on the market, making it difficult for low-income families that rent. This means people are more likely to stay put, if they can. That has consequences for decisions about jobs, schools and lifestyle.
African Americans are falling behind in home ownership. The study found a big jump in the share of African American households that rent – from 63.3 to 68.2 percent between 2006 and 2015. No other racial or ethnic group in Rochester has such a high share of renters. Fifty-five percent of Hispanic households rent, while 26 percent of white households rent. This is concerning because home ownership is a way to build wealth.
We’ve created a lot of new apartments, while others stand empty. The Rochester metro added about 10,000 rental units between 2006 and 2015, a 7 percent increase. This includes single family houses, which make up an increasing share of the rental market. But in 2015, there were almost 10,000 units vacant, a 6.5 percent vacancy rate.
How can that be, when we added 15,000 new renters since 2006? Rochester had a huge vacancy rate back then, with more than 15,000 rental units on the market. With that in mind, these new units are pure surplus.
Why are developers continuing to add units, even though the population has grown only 2 percent? There’s demand for shiny new apartments among middle and upper income renters. Developers know they can rent the new places for high prices. They know they can get government incentives to keep building.
What we’re likely doing, however, is shifting renters around in the middle and higher end of the marketplace. Meantime, the study shows renters in the lower end don’t have many options. We’re not really growing the market. We’re just creating a bigger wealth gap. The people who need apartments are being priced out.
We need to take a serious look at our housing policies. The City of Rochester is starting a housing market study that could inform these decisions. Rochester is known for affordable housing – for everyone except those who need it the most.
Download: Study’s Data on Rochester
Author: Rachel Barnhart
4 thoughts on “Rochester’s Housing Gap”
Kathy Stuewe says:
Rachel, I have rented in the city since 2007. At first I took an apartment that was vacant for months, with broken windows rhodents and a property manager that wanted to collect my rent in cash at my apartment on the 5th of the month. It was all I could afford, but I loved the space and the neighborhood. (Corn Hill) Since that time I am still in the same apartment with many of my own $ invested in my place. Three owners later, with no improvements, this most recent landlord just raised my rent 150.00 per month, ‘to bring me up to market.’ This has driven me up to 40-50% of my income for rent. He told me to ‘apply for programs’ that might help me with my rent. I am newly retired and really don’t want to give up my home of over 10 years, but I looked around for something that maybe I could better afford. I foud a few, some with utilities included, but all within 50.00 or so of this new increase. I decided for that amount I would stay, I would just work more in order to afford it, which is putting me in line with the working poor. My point is that with this increase of higher rent properties, it affects the rents charged by out of the neighborhood landlords who just want to make a buck. This is hard and sad, and has nothing to do with the color of my skin.
Scott Spencer says:
I agree with you Rachel. I’m currently homeless because my credit is bad and many places that rent are checking that. I guess that even though one works and could afford a place to live but due to ones low credit score they believe it’s ok to just throw you out on the street. It’s sad and pathetic that these housing corporations feel it ok. Also, as a single white male I do not qualify for any assistance. I’m ready to move out of New York state and Rochester because of this.
Roza Eisenman says:
I think that where I live in Cobb’s Hill Village is a PERFECT EXAMPLE OF AFFORDABLE HOUSING. mY RENT IS so low now and our Management Company is in Major dispute from the City Council and the Monroe Avenue Association to REJECT THE MANAGEMENT’S PROPOSAL FOR A MORE BEAUTIFUL BUILDING PLAN.
I am Very Disappointed that all the Mayoral Candidates rejected this Proposal to Rebuild the Cobb’s Hill Project…. I think, you included. I believe the Plan is a Good one for me and the Future Generations of living in a Beautiful Park Setting and being AFFORDABLE……I JUST WATCHED ON CHANNEL 10….ANOTHER COUNCIL MTG. WHERE THE OPPOSITION ONLY SPOKE. We were Not asked to speak at this Meeting by our Management Company. I don’t know Why….but I can honestly tell you.. IT IS A GREAT PLAN…
Rochester For All says:
Roza, I’m glad you are so lucky to have an affordable place to live. Thanks for keeping us posted on what’s going on with the proposed project. Rachel