New Yorkers Face High Housing Cost Burden: Here’s How the President’s Budget Will Help

Buying a home is more expensive than ever before – and more renters than ever are feeling the burden of rising rent prices across the United States. Nationally, the cost of housing has risen 50% more than household income over the last 20 years, and nearly 45% of renters are cost-burdened (spending over 30% of their income on housing). Housing unaffordability and shortages have been felt the most by low and middle-income families. President Biden’s proposed budget would bring much-needed relief. 

New Yorkers are no stranger to feeling the ill effects of today’s housing affordability crisis: almost three million New York households spend more than 30% of their household income on housing costs, making up 38.9% of all households. 1 in 5 families are considered severely cost-burdened, spending more than 50% of their income on housing. New York has the 3rd highest rate of housing cost burden in the nation.

Both homeowners and renters are cost-burdened by housing in New York. 52.4% of New York renters are considered cost-burdened (13th in the nation in 2022), with rates of cost burden for renters increasing across all income groups since 2012. Additionally, 28% of homeowners are cost-burdened (3rd in the nation in 2022). Monthly costs also increased for both renters (39% increase) and homeowners (28% increase) from 2012 to 2022.

In the President’s proposed budget, the Biden Administration calls for a historic investment of more than $258 billion to help cut housing costs, increase housing supply, and expand access to housing that’s affordable for everyone. New Yorkers are feeling the strain of housing costs – here’s how the Biden Administration wants to help:

Addressing the Supply of Housing Units

The Low-Income Housing Tax Credit (LIHTC) is the biggest federal program that encourages the construction and renovation of affordable housing. The President’s Budget would invest $37 billion to expand this tax credit, aiming to increase the availability of affordable housing for low-income renters. The Budget would also permanently raise the allocation of tax credits that states receive, which would help in growing New York’s housing supply. 

The President’s Budget also allocates $20 billion for competitive grants to encourage state and local governments to expand housing supply. These grants will support various initiatives, including funding multifamily developments, facilitating commercial-to-residential conversions, and promoting projects near transit and community amenities. 

Availability of housing is a large factor in determining cost burden – between 2012 and 2022, New York only increased its amount of housing units by 5.7%, ranking 32nd nationally. By working to grow New York’s housing supply, renters and homeowners may see a lower cost burden.

Easing Financial Burdens for First-Time and First-Generation Home Buyers 

President Biden is calling on Congress to enact a Mortgage Relief Credit aimed at assisting middle-class first-time homebuyers. The credit offers up to $10,000, distributed over two years, which is akin to lowering mortgage rates by 1.5 percentage points for two years. This initiative would aid over 3.5 million middle-class families in purchasing their first homes within the next two years.

Promoting Rental Affordability 

The President’s Budget would create two housing voucher guarantees: one for low-income veterans and the other for youth aging out of foster care. Veterans who have incomes under the federal poverty line or 30% of the area median income, pay over half of their income in rental costs or live in inadequate housing, and receive no housing assistance would be eligible for rental assistance starting in 2026. Youth aging out of foster care would also be eligible for guaranteed housing voucher assistance starting in 2026. About 7.7% of veterans in New York live below the federal poverty level, and New York has the 5th highest population of veterans in the country. Similarly, 74% of youth in New York’s foster care system age out without any permanent connections to family or caretakers, putting them at high risk of becoming homeless. President Biden’s proposed housing voucher guarantees would provide much-needed support for vulnerable New Yorkers.

The President’s Budget also calls for an increase in funding for the Housing Choice Voucher (HCV) Program, which aids extremely low-income families, senior citizens, and individuals with disabilities in affording safe housing. Since housing support is offered for the benefit of the family or individual, they have the freedom to secure their own housing in the private market.

Increasing this federal assistance to New Yorkers is paramount to fighting poverty and reducing rental cost burden with poverty rates projected to fall by 3.7% in the state after expanding HCV. 

President Biden knows that rising housing costs are hurting our families. His budget would deliver real relief for New Yorkers.