- Stagnant wages and cratered home inventory push Hudson Valley's low earners out and pinch middle class, report finds.
- Rents and mortgages are sapping more and more of Hudson Valley incomes, Hudson Valley Pattern for Progress reports.
Those looking to buy a home or rent an apartment don't need a report to tell them how impossible that seems these days, but Hudson Valley Pattern for Progress has put it all in black and white: slack wages, surging rents and gentrification in the past year have priced many out of the market.
The Newburgh-based research group on Tuesday released "Out of Reach 2024," which shows how dire things have gotten. Among its findings: "While housing stress is most acute for those who earn the least amount of money in our economy, the latest data show that even the core of our middle class in the Hudson Valley is now struggling to find an affordable place to live."
'The mortgage gap':One number shows how difficult housing market is to crack
The report looks at the market across the entire nine-county Hudson Valley — Westchester, Rockland, Putnam, Orange, Dutchess, Ulster, Columbia, Sullivan and Greene counties — and reaches a sobering conclusion: The housing crisis is only getting worse as gentrification drives prices beyond what most can afford.
How bad is it?
- Rent increases have been double that of wage increases in recent years, but rose even more significantly over the past year. "The biggest gap was in Westchester County, where average tenant wages dropped by 9% and fair-market rents increased by 16%," the report said.
- A single worker making average wages cannot afford fair-market rent in any of the nine counties. "Tenants’ wages would need to increase between $2.50 and $31.67 (per hour) to afford fair-market rents in their respective counties," the report said.
- The gap between tenant wages and fair-market rent grew substantially in every county except Greene. "Fair-market rents would need to decline anywhere from $130 to $1,647 per month to make them affordable for a person earning average renter wages across the region."
- And it's not just renters. Homeownership is also out of reach, as median-earning households cannot qualify for a mortgage to buy the median priced home anywhere in the Hudson Valley.
“The struggle to create housing that is affordable for people across the entire spectrum of income will be the defining civic issue for this generation of leaders in the Hudson Valley,” said Adam Bosch, CEO of Pattern for Progress.
“There is ample evidence that the housing crisis is exacerbating our regional workforce shortage, as more people pack up and leave the Hudson Valley in search of a more affordable standard of living elsewhere. We cannot look away from this challenge. To preserve our wellbeing and quality of life, the Hudson Valley must allow and encourage more housing, rather than opposing and protesting it.”
The report is based on data from the National Low Income Housing Coalition, and uses wages and "fair-market rents" to examine the affordability of rental housing. ("Fair-market rent," the report says, is the 40th percentile of renters who have moved within the past two years, which means it is lower than median market-rate rents.)
Rent increases far outpacing wages
What, exactly is "affordable"? The standard is that a family should spend no more than 30% of its income on housing. And the report concludes that those percentages — given the rising costs and slack wages — are not sustainable.
"The typical Westchester County renters have seen their rents increase by 16 percent but their purchasing power slide by 9 percent," Bosch said Tuesday. "That means that a great proportion of their income is going toward housing, leaving less money for food, clothing, and other essentials. In other words, people need to maintain a more constrained standard of living if they make average wages and want to rent in Westchester."
The report notes how the pressure on renters, and would-be renters, accelerated in the last year alone.
"Wages earned by a typical renter ranged from 34% to 51% of the area median income in each county, a key metric for housing policies and programs," the report said. "In 2023, average renters earned 39% to 61% of the area median income. This change underscores that greater wage growth is happening in the higher income brackets, while renter wages remain stagnant."
The report also addresses the "mortgage gap," a yawning financial difference between the mortgage that a family can afford and the median price of real estate in the marketplace.
"This is true for one-person, two-person, and four-person households making median wages in each county," the report said. "A two-person household falls anywhere from $99,665 (Sullivan) to $280,410 (Rockland) short of qualifying for enough mortgage to buy the typical home in each county."
As a result, the report said, more middle-class households are leaving the Hudson Valley for more affordable options in neighboring states or in southern states such as Florida, North Carolina, and South Carolina.
Gentrification inflates housing prices up the Hudson Valley
Taking the place of those leaving the area, the report found, are well-heeled buyers who started arriving during the pandemic, ushering in a wave of gentrification that turned housing stress into a housing crisis.
"For example, households that moved into Columbia County during the brunt of the pandemic brought an average adjusted gross income of approximately $160,000, while those who left the county earned an average of just under $70,000. This same trend occurred at different scales in Dutchess, Greene, Sullivan and Ulster counties.
"The influx of new wealth pushed up the cost of all types of housing — along with the assessed values of land and homes — making it less viable for low- and moderate-income people to move or buy a home in the region."
Read the 'Out of Reach 2024' report
Waves of buyers priced out
For generations, New York’s suburbs have seen waves of new homeowners, attracted by affordable houses that could still be within a manageable commute to jobs in New York City.
But those waves of home buyers may be in the process of skipping a generation, as housing prices and a lack of inventory have put home ownership out of reach for most, the Progress report suggests.
Waves of buyers in the post-war era filled bedroom communities in Scarsdale and White Plains. The building of the Tappan Zee Bridge in 1955 made Rockland County commutable.
When New York secretary Rosemary Pillkington dreamed of the ideal home — in 1961’s “How to Succeed in Business Without Really Trying” on Broadway — her dreams took her to New Rochelle. That same year, TV audiences were introduced to Rob and Laurie Petrie, whose suburban life in New Rochelle had everything they could ever want.
The affordability line moves north
As demand mushroomed, commutes got longer as the affordability line crept farther north, to Putnam County and points beyond.
Bosch has tracked that line of affordability, first as a reporter and now as CEO of Pattern for Progress. He said the invisible line that indicates supposed affordability keeps moving north, affecting even those seeking homes in more rural areas. They could once look to certain parts of Ulster, certain parts of Sullivan, certain parts of Columbia, or Greene counties.
“You think of Columbia County as a rural county, a farm county that has a population of 60,000. It is bound to be affordable, right? No,” Bosch said. “Columbia County has seen its median cost go up by $205,000 in five years.”
That’s not the price tag: $205,000 is the increase in the median price tag. In Columbia County, a median-priced home sells for $450,000.
NYC people came and stayed
Bosch said recent waves of home buyers have come in response to world events — 9/11 and the pandemic — but those waves were different. Those who fled New York City because of 9/11 mostly returned in the years that followed, Bosch said.
Those who fled the pandemic and flooded the market with offers for dwindling inventory are staying put. The option to work remotely has rendered the commute moot.
“This most recent wave of people who've moved out of the metro area and into this region and made all-cash offers and made offers above asking price — combined with the fact that we have built very, very little housing in the past 15 years in this region — has resulted in there being no affordable haven for anyone who is really looking to buy a home and doesn't care about commute time or location.
“There's no place to go,” he said.
Inventory dries up
There’s no suburban foothold. Not even a toehold.
“Right now, the only thing that's on the market — because the middle has just been gobbled away — is super luxury homes or they're not even fixer-uppers," Bosch said. "They're practically falling down. And that's what we see in the market.”
The inventory has cratered, he said.
“Comparing 2019 until now, the amount of stock that's on the Multiple Listing Service for sale is 64% less than what it was in 2019. There's no long-term data on this, but you talk to anyone who's been in real estate for 30 or 40 years, they'll say the stock that's for sale now is at historic lows in their lifetime.”
Bosch paints a bleak picture of the situation facing the next would-be wave: “We have stock at historic lows, prices at historic highs and a citizenry that finds itself asking, 'Where are we gonna live?' ”
Reach Peter D. Kramer at pkramer@gannett.com.
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