For new renters, New York might be more affordable than it seems

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Hear us out: No one's pretending that New York isn't a maddeningly expensive, difficult city to live in (particularly if you ever have hopes of actually owning your own home). There's a good reason that so many of us, whether artists in need of time and studio space to actually work, or parents looking to raise their kids with a little more room, grapple with the question of whether or not to throw in the towel and just move somewhere cheaper.

All that said, the idea that life will be so much more simple and affordable if we pick up and move somewhere else? We're not totally buying it.

In part, because as young buyers and renters keep flocking to cities and eschewing the suburbs, other urban areas have quietly started to match or best us when it comes to unaffordability. (Per one recent study, NYC is only the fifth least affordable place for homeowners, and in the world of rentals, San Francisco has been reliably surpassing us for a while now.)

But also, the actual cost of living for most people is a far more complicated picture than what you'll see in headline-grabbing market report numbers. "One of the reasons people like to complain about New York is because the numbers are higher, but there's no context there to compare the total financial picture to, say, someone in Omaha," says Miller Samuel appraiser and data guru Jonathan Miller. In other words, it's hard to get a sense of a city's real affordability, says Miller, "unless you drill down to look at a specific example of someone's situation, and say 'This factor is offset by this other factor'."

He adds: "We're very cavalier about talking about numbers in aggregate, but most people don't live that way." 

Below, four reasons NYC can be more of a bargain than it seems:

You don't have to have a car

This is really the big one. Whenever we find ourselves daydreaming over Los Angeles listings that are a couple hundred dollars cheaper (and infinitely more spacious) than our digs here in the city, there's always a record-scratch moment: "But wait, I'd have to have a car." 

Though prices obviously vary, between monthly payments, insurance, gas, taxes and registration fees, and maintenance, Nerd Wallet estimates the average cost of owning a car at around $725 per month. And that's not including parking spaces, which in Manhattan, can run $400/month or even more. (Parking is generally much cheaper in other cities, except, again, SF where a quick peek at Parking Panda shows a range of $198/month to $406.60/month). And even if you don't pay for parking space here, that means facing the unwiedly hassle that is alternate-side parking. (And anecdotally, the inevitable expensive tickets you get for messing up said alternate-side parking.)

So even if you have to buy a monthly MetroCard, at $116.50, and spend an extra $100/month on cabs, that's still an extra $500 or so you save. Which makes the lower rents in other, car-centric cities suddenly seem like a whole lot less of a bargain.

"When my wife and I first left the city for Connecticut, I made a spreadsheet of our cost of living—and it turned out to be identical," says Miller. While the cost of housing was cheaper, those savings were eaten up by the cost of commuting into the city and owning a car. "So the move was really a lifestyle decision, not a savings decision."

And that's to say nothing of all the mental space you save by simply zoning out on the subway in the morning, rather than battling through traffic and parking.

You'll probably get paid more

"You can make the case that New York is expensive, but you're also likely making quite a bit more," says Andrew Woo, director of data science and growth for Apartment List. "If you look at percentage of income that goes towards rent in different metropolitan areas across the U.S., Miami is the highest, with high rents and relatively low incomes. Renters there spend 41 percent of their incomes on rent, in Los Angeles, it's 37 percent and in New York, it's 36 percent." (Though keep in mind that the threshold for being considered officially rent-burdened is spending 30 percent of your income on rent, so none of these numbers exactly spell affordability.)

"You see some analyses of 'the best cities for millenials!'' but this demographic isn't a monolithic market. Some might be extremely career-driven, while some might prefer a calmer existence. And the metrics used for these stories tend to focus only on monthly expenses, so the cities that end up topping the lists are very affordable, but also have fewer job opportunities and limited room for career advancement. The trade-off makes sense for some renters, but not all of them," says NeighborhoodX founder Constantine Valhouli. "The draw of cities like New York, San Francisco, and Washington D.C. is the promise of considerable career upside, and the high rental and purchases prices reflect the willingness to pay to be here to access those opportunities. If you're looking early in your career, the first couple of years can really shape the long term, so it can be worth sucking it up and saying that you might take a hit on quality of life now, in exchange for much higher quality of life down the road."

In Los Angeles, for example, unaffordability has been a concern for years, Valhouli adds. "In real terms, both the purchase and rental prices are considerably lower than New York and San Francisco. But when you compare these prices against the median incomes in each city, it becomes apparent that L.A. isn't overpriced, but is rather underpaid."

Of course, this advice largely applies to upwardly mobile, college-educated professionals, and depends heavily on your given industry and experience level. (Though more broadly NYC did recently rank as the best city in the country for job seekers in a variety of industries.) But the bottom line is that if you take into account factors like job opportunity and salary into your calculations, "Those numbers would suggest that New York isn't quite as bad as it seems," says Woo.

The commute might suck, but there are more "cheap" apartments

This is one area where New York's sheer size, and volume of housing, works to our advantage. While our city is home to some of the world's most preposterously overpriced properties, if you're willing to endure a long train ride or multiple roommates, there are bargains to be had.

"The spread is wider in NYC from the low end of the market to the high end," says Miller.

"Real estate markets tend to get reported on as though the average price for a neighborhood represents the full range," says Valhouli. "But prices vary hugely even with a single neighborhood, and just looking at the average or median, bargains get concealed. (Take, for example, Riverdale, where per-square-foot sales prices range from $121 to $836, an enormous difference.)

"As a renter, you can always find a room for like $800/month—but what are you willing to give up?" adds Valhouli. "We fundamentally have more city to fill in."

A clear counterpoint to this is San Francisco, which has comparatively low inventory, less room to spread out, and a tighter spread of pricing options. "Their fancy areas aren't as expensive as New York's, but their inexpensive areas aren't as inexpensive, either," says Valhouli. "The city is shaping itself into something increasingly monolithic and homogenous."

Rents in other cities are climbing faster than ours

Though NYC has plenty of positive selling points—among them, our abundance of food, nightlife, and entertainment options geared towards the young and broke—it's also worth considering a compelling argument against most other cities: they're all getting more expensive, anyway.

While New York rents have (finally) started to level off and even drop in recent months, in other cities like Denver, Seattle, and Austin, they're still rising at a rapid clip, per data compiled by ApartmentList.

"The rent growth cycle in the most expensive coastal cities has almost run its course, in a way," says Woo. "The rents are already so high that they can't go much higher. I think the worst days for rent growth are behind us, in part due to increased options from new construction, and in part due to the fact that rents have already hit their ceiling."

On the other hand, says Woo, "in places like Nashville, Dallas, and Colorado Springs, for instance, they're in the middle of the growth curve right now, and we're seeing growth numbers we used to see in New York and San Francisco."

"That said, you still have to take everything with a grain of salt," says Woo. "New York is expensive, and there's really no getting around that." But if you need a handy comeback the next time your extended family hassles you about throwing away money on rent (the holidays are looming, after all...), consider yourself armed.


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