Paterson and Passaic City among least affordable housing markets in U.S., study | Paterson Times

Paterson and Passaic City among least affordable housing markets in U.S., study


The housing market in Paterson is the sixth least affordable in the United States, according to a new study released by New York City-based personal finance firm SmartAsset. The situation is far worse in neighboring Passaic City which ranks first place as the least affordable housing market in the country.

Residents in both cities face enormous difficulty in affording housing. For example, the study found on average renters in Paterson spend 44-percent of their income on housing while in Passaic City renters spend 50-percent – highest in the U.S.– of their income on rent.

The Department of Housing and Urban Development (HUD) generally recommends a spend family 30-percent or less of its income on housing. Families spending over 30-percent of their income on housing are considered “cost burdened” and have a tough time “affording necessities such as food, clothing, transportation and medical care,” according to HUD.

least_affordable_housing_2_mapThe culprit in Paterson is stagnant or declining household income. “We found that the least affordable housing markets are often cities where incomes have not risen. From 2011 to 2015, rents in Paterson remained the same, but the average household incomes dropped, from $32,400 per year to $31,500 per year, worsening the housing cost burden for residents,” A.J. Smith, vice president of financial education for SmartAsset, said.

The picture is not much better for homeowners. Homeowners in Paterson on average spend 44-percent of their income on housing expenses while in Passaic City housing cost ate up 53-percent of a household’s budget.

When families spend so much of their income on housing they tend to cut costs in areas like food and healthcare at the detriment of the local economy. “This reduced spending impairs the household’s quality of life and can be a drag on the local economy. Additionally, these families have less money to secure their financial future (saving for retirement) or meet other financial goals (saving for their child’s education),” Smith said.

The study focused on uncovering least affordable housing markets in America and did not research local solutions to addressing the issue.

“The silver lining for Paterson residents is that the city has the second-lowest home value to income ratio in our top 10. Therefore, buying a home is slightly less out of reach for the average Paterson household compared to average households in other unaffordable housing markets nationwide,” Smith said.

  • Plumber

    Homeowners in Paterson on average spend 44-percent of their income on housing expenses or do you mean property taxes that are super high along with sewer taxes, water bills, property maintenance, the bare bone services the city provides, such as the bullshit street cleaning, snow removal, street repairs, DPW riding around six deep hitting the local liquor stores for their booze, but would ride right by a pile of garbage on the streets, huge rats around 20 on the corner of Broadway and summer st were I contacted the broad of health, building dept, even the mayors office they promised they would send someone out the next day and to this day no one showed up, I'm retired and kept an eye out for someone to show up, the city spending money on a stupid dog park on river st, money mis-spent that's why taxes or high and rents follow, no body cares

    • Yogi Zuna

      As former mayor and Councilman Rooney once told me: "Things move very slowly in Paterson."

  • The Goat

    NJ economic segregation.

  • MB

    The average property taxes are easily $10,000 per house. Plus another 1,500 for homeowners insurance, plus $2,000 more in Sewer and Water. That's already at $1,125 and this doesn't even include the mortgage. On top of that you have a top heavy government, with everyone at the top getting big bucks not to do their job, but to steal even more from the people of the town.

    Street Cleaning – What street cleaning? Street cleaning was set up to give people tickets who do not move their car to opposite side of the road twice a week, even though the streets don't get cleaned.

    DPW- Visible corruption. Groups of employees are always riding around doing NOTHING.

    How are other towns able to have less property taxes, and still maintain their towns so well. So close to the NY Metro Area. People who run this town, grew up in this town. This town made you, its your home, why would you want to live in filth. You should all be ashamed of yourselves for sucking the blood out of this town to fill your own pockets.