Understanding NYC’s Rental Income Requirements

In a piece for Curbed, Clio Chang probes the origins of New York City’s income requirement for apartment rentals, which typically asks for 40 times the rent in annual income.

“The financial crash of 2008 seemed like a plausible theory, so I started looking at newspaper archives to see if I could find early mentions of the income requirement. After a little poking around, I found a New York Times piece from 1997 in which a broker told the paper that “strict” buildings require up to 50 times the monthly rent while a more “liberal” landlord accepts 40 times.” A tenant lawyer told Chang that the requirement could also be related to the 30 percent figure that most government agencies use as the maximum percentage of their income a household should spend on housing.

Looking further into where the 30 percent rule comes from, Chang found that the concept first came about in the early 1900s, when housing activists called for rents not exceeding 20 percent of family income. “When the Section 8 program started in the 1970s, it was considered standard that households would only pay 25 percent of their income, which under Reagan was later raised to 30 percent, and today, that number pops up in all kinds of housing policies.”

Chang concludes, “A big problem is that rents are simply too high — a recent report found that between 2019 and 2023, median rents rose by 18 percent while incomes grew by just 11.5 percent. Today, a fifth of New Yorkers now pay 50 percent of their income on rent.”