It seems like there’s, you know, BREAKING NEWS every day about the craziness of New York real estate prices and the out-of-control, stratospheric heights being reached and how once undesirable neighborhoods are now among the most coveted spots on earth and the depressing fact that you’d need to be a millionaire to ever even contemplate owning a home in Manhattan or Brooklyn or Queens and on and on and on. And, you know, it’s all true! Real estate prices have risen dramatically in the last 20 years, and it’s depressing to think too much about it because you might start seriously considering about moving somewhere else and you’re not just going to give up like that, are you? No, of course not. But also, are you ever really going to be able to afford a home here? Well, sadly, the answer for many of us is also, of course not. But the reason isn’t just about real estate prices, it’s about something that might not make for as sexy a headline (yes! headlines are planned in terms of, ew, “sexiness”), but is actually even more troubling: income inequality.
Gothamist reported on the unprecedented income gap in the city and writer Christopher Robbins notes, “In 1990, the upper 20% of all household earners controlled 48% of the total household income; by 2010 their share had risen to 54%, higher than the national trend of 50%. During the same period, the lower 20% of earners saw its hold slip from 3.3% to 3%. The top 1% of earners (The Job Creators, The Beneficent Tax Base, The Doers, The Skin-In-The Gamers etc.) felt their median income increase from $452,415 to $716,625 over that 20-year period. The lowest 10% of earners went from $8,468 to $9,455, well below the inflation rate.” Also alarming is that the concentration of wealth is disproportionately in the hands of non-Hispanic white households, making this income divide also a racial one. Robbins quotes from a study done by the Center for Latin America, Caribbean and Latino Studies which reports that by “2010 42% of all non-Hispanic white households earned $100,000 or more and they controlled 78% of total income derived by all non-Hispanic white households. By way of comparison 19% of Latino households, 23% of non-Hispanic black households, and 30% of Asian households were in this income category.”
Taking a look at these figures alongside the sky-rocketing real estate market and it’s easy to see that the crazy sales and rentals numbers are not just some by-product of New York being a great place to live because of the fact that the city’s job market didn’t suffer as badly as did those in other parts of the country or because, you know, Brooklyn is cool. No, what these numbers demonstrate is that the crazy real estate in the city is a product of the fact that the wealthiest residents here can afford to buy and buy and buy and drive up the prices to a place that might still remain affordable to those people who median income has practically doubled over the last two decades (in line with real estate prices), effectively shutting out all of the other people whose wages have stagnated. Add to that the fact that most of these high earners are white, and it suddenly makes perfect sense that areas that were once diverse and multi-cultural are now predominately populated by white New Yorkers. As with so many things, it’s not the real estate market that is forcing change, it’s the people with all the money who are ruining it for the rest of us, and doing their best to guarantee that one day New York absolutely will be just a playground for the rich. I don’t know. Happy hump day, everybody.
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