The American Dream trajectory of renting while young and owning a home later doesn’t quite apply in NYC.
Renters run New York City. Renting is fate for the young and trending in Brooklyn and Queens and the Bronx. It’s also just a cold, hard fact of life for most everyone else in NYC.
It’s no surprise that renters outnumber owners in New York altogether. About 51 percent of the city’s housing units are renter-occupied, versus 41 percent that are owner-occupied, according to Census data. (The rest are vacant or seasonal.) What’s surprising about New York City is the spread. In nearly every age category, from 25 to 75, renters outnumber homeowners in New York. And in most age groups, renters win by a wide margin.
Newly released American Housing Survey data confirm the changing picture of New York City metro area, along with several metropolitan statistical areas. While some places have seen big surges in renters, only in New York City do renters outpace homeowners at so many points along the demographic spectrum.
There are about four times as many 30-year-old renters in New York as there are 30-year-old homeowners. Compare that to the Philadelphia metro area, where the number of renters and buyers are pretty much equal at 30. In the Boston, Chicago, Austin, Hartford, and Washington, D.C., metro areas, there are more renters than buyers at age 30, but for all those cities, buyers outstrip renters by around age 35.
For New Yorkers in in their 20s, 30s, and early 40s, the renters outpace the buyers by substantial numbers. Only when the householder age reaches the 50s does the number of homeowners catch up with the number of renters—and that’s only when you factor in owners who own their homes free and clear (i.e., magical, mortgage-free unicorns).
Check out almost other city and the pattern is different: A spike in renters (20s and 30s) followed by a jump in mortgage holders (40s and 50s) followed by a rise in owners who have paid off their mortgages (60s and 70s). That’s the American Dream, in one chart.
It’s harder to trace that dream in New York City. Millions of renters aren’t making the leap to homeownership. That may be fine, in one sense; one cost of living in New York City may be giving up on the typical aspiration to homeownership. While New York is an outlier, it isn’t alone. In the Los Angeles and San Francisco metro areas in particular, the owner-renter graphs are trending in the direction of New York.
The real problem with New York City is that renters pay a wildly disproportionate share of the property tax burden. High property taxes for renters defray the correspondingly low property taxes for owners. So renters are in a direct sense subsidizing the high quality of life enjoyed by owners in New York City. Gotham renters are paying the way for owners, and renters are not exactly living the dream.