ITHACA, N.Y. — Ithacans pay a disproportionately large amount of their wages towards housing.
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But just how bad is it? Let’s put the numbers in perspective.
One of the statistics that the federal Bureau of Labor Statistics keeps in track of is the mean wage for a metropolitan area. Below are the 2014 values for seven upstate metros – the big ones (Buffalo, Rochester, Syracuse, Albany), Ithaca’s neighbors Elmira and Binghamton, and the city of gorges itself. Also included for the sake of reference is the U.S. national average.
None of them stray too far from the national average of $22.71/hour. Ithaca has the highest, at $25.01/hour. That’s about $52,000 a year for those of you keeping track.
Federal guidelines say that for rental housing to be considered affordable, no more than 30% of one’s wages should be paid towards housing, and no more than 10% towards essential utilities (electric, heat, water; not phone, internet or cable). Doing the math, here’s what the monthly rent should be for each region for someone earning the mean wage and paying 40% to cover their housing and utility costs.
Including the cost of utilities might seem a little odd, but it’s for comparison to another statistic – Fair Market Rent, or FMR. To quote FMR’s administrative office, the U.S. Department of Housing and Urban Development:
“The FMRs are gross rent estimates. They include the shelter rent plus the cost of all tenant-paid utilities, except telephones, cable or satellite television service, and internet service…The current definition used is the 40th percentile rent, the dollar amount below which 40 percent of the standard-quality rental housing units are rented . The 40th percentile rent is drawn from the distribution of rents of all units occupied by recent movers (renter households who moved to their present residence within the past 15 months). “
Perhaps this comes as no surprise to some, but none of the other upstate metropolitan areas sampled here come even close to Ithaca’s fair market (40th percentile) rents. But let’s put this into perspective – the next plot looks at the rent as a proportion of the monthly mean wage.
Well, this drives the point home – even though Ithacans might make a little more money on average than their peers in other upstate communities, they also pay out a much greater proportion of it to keep a roof over their heads. Technically, since FMR is the 40th percentile of rent and utilities combined, one could try to make the argument that utilities are somehow much more expensive in Ithaca than Elmira, Binghamton and Syracuse. But that would be a huge stretch.
By the way – for those of you that own homes, the picture isn’t any better. the data below is from housing website Trulia for February-May 2015:
With the exception of the Albany area, Ithaca nearly doubles every other region on the list.
One last comment before wrapping this up. Some readers might think, ‘I’m not moving anytime soon, what do I care?” But this has an impact on things like taxes as well – higher prices means higher tax assessments, since assessments use the sale of comparable properties as part of the formulation. So everyone’s pocketbooks will feel that extra pinch.