There’s no doubt New York is an expensive city. We’ve all heard of young renters working hard and struggling to make ends meet, but it turns out these struggles aren’t limited to people in their 20s. It’s becoming common for people in their 30s or 40s to need guarantors to sign a lease.
A guarantor is someone who is responsible for a lease if the renter cannot pay. Given the high rental prices in New York, many people relocating or moving within the city are unable to meet the stringent requirements of landlords. In this case, the renter can use a guarantor to make up for falling short of the landlord’s requirements.
Here are some numbers that illustrate the difficulty of renting in New York. Rents in New York City increased by 3.9 percent annually from 2010 to 2017, while wages only increased by 1.8 percent. Meanwhile:
- The median rental price in Manhattan is $3,400.
- The median rental price in Brooklyn is $2,950.
- The median rental price in Queens is $2,995.
Why are these numbers important? Most landlords want renters to make 40 times their monthly rent. The median household income in the United States is $61,372, which means an individual making an average wage could only afford to pay $1,534 per month — well below the average rent prices in Manhattan, Brooklyn and Queens.
In some cases, people making as much as $80,000 to $90,000 per year struggle to meet the 40 percent threshold. A salary that used to be sufficient doesn’t go as far now that rents are continuing to rise.
In addition, it has become more common for New York residents to work as contractors. This type of work may lead to less income certainty, which can cause landlords to question a potential renter’s ability to pay the rent.
Personal financial circumstances can be overcome with the help of a guarantor. It’s an option more people are needing to use, even those who may be considered well-established in their careers.