Newark tops U.S. cities for homeowners ‘severely’ burdened by housing costs

Published July 29, 2022
By Steve Strunsky

A survey of the nation’s large cities found that Newark tops the list for homeowners who are “severely housing cost-burdened” and spend at least 50% of their income on mortgage payments. And, the survey found that Newark ranks nearly as high nationwide for severely burdened renters.

The survey by SmartAsset based on 2020 Census data found that 26.1% of Newark homeowners spend at least half of their income on housing costs, the largest share of severely burdened homeowners among the nation’s 150 largest cities.

A pair of Florida cities, Hialeah and Miami, had the two next-highest shares of severely burdened homeowners, at 19.2% and 19%, respectively, according to the SmartAsset survey, a private financial advisory firm that regularly surveys financial and other data.

Less than one-quarter of Newark’s 310,000 residents, or 23.5%, live in houses or condominiums that they or a family member own, compared to the statewide homeownership rate of 64%. According to Census data, there are about 24,000 privately-owned houses or apartments in Newark.

More than three-quarters of Newark residents — or about 78,000 households — are tenants, and the city ranked seventh nationwide for the share of residents who spent more than half their income on rent, at 31.3%. Glendale, California, topped the list for severely burdened renters, at 37.8%, followed by Hialeah, at 36.7%. A Rutgers report last year put the city’s affordable housing shortage at 16,000 units, followed five months later by Mayor Ras Baraka’s announcement of a plan to create or preserve 6,600 affordable units by 2026.

More recently, a Rutgers report found that Newark’s rents and home purchase prices were being driven up partly by increased corporate investment in single- and multi-family homes.

This week’s SmartAsset survey comes amid the city’s recent announcements or actions to make Newark housing more affordable to rent or own.

On Tuesday, the City Council approved expanding the city’s inclusionary zoning ordinance requiring developers to set aside 20% of newly constructed apartments for people with low and moderate incomes. The expansion involved lowering the size of projects subject to the set aside and increasing the contribution developers must pay into an affordable housing trust fund to avoid building affordable units on-site.

Last week, the Baraka administration joined the Newark Housing Authority and the non-profit Neighborhood Assistance Corporation of America to announce a program allowing residents receiving Section 8 rental subsidies to put them toward mortgage payments instead.

The SmartAsset survey was released the same day as the findings that New Jersey rents statewide were the 7th highest in the nation on average, according to joint report by the Housing and Community Development Network of New Jersey and the National Low Income Housing Coalition.

The report found, for example, that New Jerseyans need to make more than $65,000 a year — at least $31.32 an hour — to afford the average rent on a two-bedroom apartment. Nina Rainiero, a Housing and Community Network spokesperson, said the situation in Newark was consistent with the rest of the Garden State.

“A lot of families are facing incredible pressure right now,” she said.