On-Site.com: Growth in tech and creative off-set dwindling financial sector for New York City owners, while lawyers can still afford to pay more rent
New York – For the past decade, On-Site has been tracking statistics such as the industry in which renters work. New York City has long been known as an epicenter for fashion and media industries, and these creative sectors have contributed to an increasing share of Manhattan’s renter pool. But the larger trend over the past several years has been the slow death of Wall Street jobs in favor of technology ones.
Giants like Google, Facebook and Twitter have established beachheads here. CornellNYC is opening a 2-million square foot campus on Roosevelt Island with the unabashed support of Mayor Bloomberg. “The fact is, New York was Start-up City before there were start-ups,” he said last year. Indeed, fledgling startups are drawn to a thriving ecosystem fed by money from private investors and supported by incubator labs, some of them sponsored by the city. Between 2005 and 2010, the city’s tech workforce grew 10 times faster than city employment according to the Center for an Urban Future.
The rental applications of our customers tell the story in dramatic fashion. In Manhattan, for example, financial jobs have fallen by nearly a third over six years, while technology and creative have nearly doubled. In Brooklyn, 2012 employment in creative industries such as advertising and media outpaced financial (25.4% to 23% of total jobs). In Queens, the story is similar, though less pronounced, with Wall Street jobs constituting a smaller portion of the renter pool than creative and technology combined.
A measurement perhaps more intriguing to landlords is which of these industries attract the optimal renter? In 2012, owners achieved the highest average rent per square foot from lawyers ($62.50) and the lowest from those working in medicine ($56.28). Lawyers are also the highest earners on average. More intriguing, though, is that this group yet represents the biggest untapped capacity to absorb rent increases. Typically a renter must earn 40x the rent to qualify to lease an apartment, but lawyers earn almost a third more than that; they spend the least percentage of their incomes toward housing among industries, demonstrating a capability to pay more than they did in 2012.