Reader Case Study

Guest Post: Living in NYC Case Study

Reader Case StudyI have been yapping on this blog for over a year now. So when Stephen, a reader and relatively recent NYC transplant contacted me to say he enjoyed reading the site, I had an idea. Stephen told me about his experience in NYC and how he actually lives a less expensive lifestyle than he used to. Of course, this is not to say that everyone’s situation is the same, but I thought it might be a good idea to take a look at Stephen’s situation as a case study. With a little work, New York and other big cities don’t HAVE to be as expensive as you expect.

Stephen graciously agreed to write a guest post about his experience. So without further yapping from Mr. NYBudget, enjoy:


To be living in New York City today is exciting for myriad reasons, not the least of which is the collective social and economic focus on the cost of living. This is playing out largely in terms of housing costs, and under the de Blasio administration, we have the first ever Deputy Mayor for Housing and Economic Development and arguably one of the most ambitious plans for the provision of affordable housing ever set in motion in the United States.

Like many who call this beautiful complexity home, my wife and I are transplants, having arrived fresh off the plane from another state and another income bracket – we had both recently finished grad school – at a time when the Bloomberg administration was racing to complete certain priorities before a new mayor would be ushered in and showing clear signs of winding down in other areas. We established temporary base camp in Fort Greene, then in the Upper West Side, before settling into more permanent digs in Astoria. With the exception of the occasional outlier, the question we are almost asked first about our neighborhood and apartment is not, “Why Astoria?” or “Didn’t you love walking to Central Park?” or “How far do you commute?” – instead, it’s “How much is your rent?”

Here, perhaps more so than in most other parts of the country, this is not only an acceptable question among friends, it’s perfectly reasonable for someone whom you’ve just met to pop the question. And while I admit it’s a valid one (we pay $1475, by the way), it’s only a narrowly defined proxy for a much more interesting question: what’s the utility return on your cost of living?

People are pretty bad at making choices, not because we can’t be trusted with our feelings or because we lack robust decision making thought processes, but generally just because we do not have complete and unfettered information for any given topic. Consequently, making huge, life-changing decisions, like where to live, is enormously difficult. How were we to know, really, if it would be easier to establish a stable career path here than in, say, Miami, or if we might prefer a 40 minute commute over a walk to work if it meant we could be located closer to something else we value?

The interaction of all of the things we “like,” such as being able to walk to a park or earning good income, combined with the things that make us better off but would otherwise be left off of a list of likes, such as not dying from the contraction of disease, comprise what economists refer to as utility. And though we know that people are almost always bereft of perfect information, we still have to make hard choices about where to live and what to do in life. Luckily, my wife and I already had a pretty good idea of what gives us high utility.

I hate driving. She isn’t a big fan either, but I really do not like it. So we made an early assumption in the search for a new city that narrowed down the field considerably: we wanted to locate ourselves within a very high concentration of employment opportunities and be able to get to all of them easily and exclusively on public transit. There may be a handful of cities out there that offer this option, but New York it had to be. Right?!

As any Post headline, apartment renter, union member, or subway rider will likely tell you, the City can be expensive. Again, this generally refers to housing expense, and if one is no longer paying for vehicle insurance, gas, or maintenance, let alone a title payment, that opportunity cost is not lost on something I don’t even enjoy – which provides more flexibility for paying for things from which I do derive utility, like shelter. Even so, families and individuals have only so much income. Where then, is it possible to find a good deal on housing? Many neighborhoods, if you look carefully.

When I was in college, I had a one-bedroom apartment in walking distance of campus and paid a whopping $475 per month. We didn’t find a place in that range here, of course, but our situation is also different. For one, we are not roommates in the traditional sense: we are married, both work full time, and like many other contemporary couples, we share expenses. Meaning that my half of the rent is about $740, or only $265 more than I paid in college. Offset this with the savings in transportation every month – a monthly unlimited metro card is $112 – and I come close to breaking even. Subtract out the cost of a gym membership, because there are great parks nearby, and a TV subscription, because there are unlimited free and engaging activities around, and we’re coming out ahead – all while living in one of the most expensive cities in the U.S., at a time when our incomes are as low as they will ever be.

Others opt for roommates. Mr. NYBudget himself has written about paying $875 per month for his apartment in Manhattan. The point is, NYC is not one singular thing. Yes, there’s a shortage of affordable housing options for many thousands of working people and families across the boroughs, but there are also thousands of others, living on living wages, and doing pretty well at it.

In my neighborhood of Astoria, for example, the median household income ranges by census tract from about $37,000 to $83,000, with a mode, I’m estimating, of about $60,000. That’s not a lot, but a person in a situation like mine, paying $740 for rent while earning a $30,000 salary would still only be paying about 37% of after-tax income on rent, which is also not a lot.

I do not mean to downplay the current housing affordability crisis. Many families earn significantly less than $60,000 and/or must provide care for large or extended families. But it does give me pause when family members back home cringe at the idea of paying nearly $1500 for a small apartment in a walk-up building from which I must walk several blocks to the train station every day, when our standard of living is, in many ways, higher: we’re surrounded by excitement and activity and fascinated by the grime, grit, and daily reality of living in New York on normal wages. We simply choose to be conscious of the bigger picture and are more than willing to pay a little more less for it.

Like this post? Sign up to receive posts via email and never miss a tip for living well and saving money!


4 thoughts on “Guest Post: Living in NYC Case Study

  1. Erin January 19, 2015 at 2:33 pm

    Great explanation, Stephen – I especially love the fact you said “NYC is not one singular thing.” There are so many factors to consider when deciding where we should live, and there are definitely ways we can cut costs to make places more affordable. NYC offers so many options for people to take advantage of!
    Erin recently posted: Living in an Expensive City: Worth It?My Profile

  2. jlcollinsnh January 20, 2015 at 5:43 pm

    Interesting post and perspective, Stephen.

    I’m curious as to what your apartment is like?

    Up here in NH we pay about the same – $1495 – for our 110o- sq ft, 2bed/2bath loft in an old mill building in Manchester.
    jlcollinsnh recently posted: 2014 Annual Louis Rukeyser Memorial Market Prediction Contest results, and my forecast for 2015My Profile

  3. Stephen January 22, 2015 at 7:49 am

    Hi Jim – It’s a pleasure to be speaking with you. While the range of (rental) housing in NYC is extremely wide, we’re likely near the lower end. Here in Astoria, which is 15 min. from Midtown, that price gets us a cozy 1 bedroom in a pre-war walkup. Newly constructed buildings of about the same size apartments would charge 2000+ and may come with additional amenities, but one good trade off of ours is that many of those buildings are locating along prime property riverfront rather than near the subway, so we have a relatively unobstructed view towards the City.

  4. Ina March 2, 2015 at 12:23 am

    When searching to rent an apartment in New York City, you can save a lot of money by looking for no-fee apartments. Brokers fees are typically one month rent, which can range from 3,000 – 6,000 for a one-bedroom apartment in New York City.
    Here’s a no-fee apartment resource guide:

    Also, Zumper has a special filter for no fee apartments for their NYC listings:

Leave a Reply

Name *
Email *

CommentLuv badge