This morning, en route to work, I glanced at the early-morning newspaper and saw the headline that many young New Yorkers are giving up on homeownership because of the price range. (note: requires registration, but you get the gist)
At risk of being crass…duh hey, Captain Obvious! Of course they’ll give up on homeownership, because there’s no way to stretch money any further than living in this city stretches it already. Salaries have not kept up pace with living costs here for nearly two decades; how in the hell does anyone expect a young person or young couple, who is just settling down in a job, starting to get a feel for job security, etc., to be able to even think about affording a house when they’re lucky their monthly salary stretches enough to cover the usual bills? And let’s not forget that there’s a pretty good chance that said young person or young couple also has student loans to repay, and depending on how they are structured, that paycheck has to stretch even further. So yes, something does have to give, and something inevitably will, and owning one’s own home, whether a house in Queens or an apartment in Manhattan, is the first thing to go.
I’m a licensed real estate agent, though not exactly actively practicing, and a huge reason why I went on hiatus with that in the winter is because I feel something very fundamentally wrong with trying to sell someone a 300sqft closet-like 1BR for over $2,000/mo. Prices in NY are completely, without question, out of control. There might be a great job market here, with over 100,000 small businesses to start with, but what good is a job market if you can’t find a place to live that won’t eat most of your income?
Even the cheap areas of Brooklyn are starting to get expensive. I grew up in a building where, at the time we had signed the lease for the two-bedroom that my family had started out in, it was $700/mo. That same two-bed, right now, is being rented out at double that price. And the salary of the tenants had not changed. My parents working together back when I was 10 made exactly what I make right now at nearly 28. That’s the reality of living in NYC, and it’s actually the primary reason that I’ve decided to jump the NYC ship and find my fortunes elsewhere – in a more affordable city, for starters.
Something has to give. Something has to change. Never mind the absolutely prohibitive costs of living in Manhattan, I have no idea when a 400sqft studio in Brooklyn became worth $1,200/mo. I also have no idea when a three-bedroom one-bathroom house in Queens got to be $500K. The NY property taxes are up there, but they are definitely not up there to the point where the rent roll is completely wiped out by the property tax payment. Currently, I work in property management and oversee the rent rolls and property taxes for three buildings. I see it firsthand. There’s no need, none whatsoever, for a residential rental to be priced the way it is.
One of two things has to happen: a global cap on both rents and property taxes to be proportionate to the median income (which is nowhere near as high as most people think it to be), or the median income needs to go up. The second won’t happen, because unfortunately, running a city of this size takes an inordinate amount of resources and this is one of the most heavily taxed states on the income-tax spectrum with the primary reason being simply having enough funds to keep the base administration of this city running. The first is debatable, because while it’s possible in some areas within the state, I severely doubt about how plausible it’s going to be to implement it in Metro NY.
It’s pretty damn rare for someone under 35 to land a job that pays more than $40K per year, and having a passable survival in NYC, if you consider the base expenses of rent, food, bills, student loan payments, and transportation, requires a minimum of about $60K. It does all come down to money, and I’m seeing people who can more than afford to pay a little extra in tax, go up in arms the minute anyone dares to suggest that they pay a little more in tax so that their secretary doesn’t have to survive on ramen noodles because her Bronx apartment is eating up most of her take-home income. The people who can afford the extra in taxes are in the minority; Wall Street is only a 5-block stretch from Broadway to Water Street. And we have people all over the five boroughs who are skipping a meal to cover their rents just because the people who work in that little five-block stretch are up in arms at the idea of closed loopholes and paying more in tax; an amount they can, in all actuality, afford without ill effect on their life and lifestyles.
Yes, it’s possible to get that golden 60K/year job, but consider that there are only so many jobs to go around that grant that passable income. You can get a job easily in this city, yes, but the likelihood is much higher that it won’t have the salary that you require. In fact, I’m ready to guarantee that your income offer will not be nearly enough to qualify as survivable. You’ll take the job, of course. You’ll take it because you need to survive and pay bills, only to find that you can’t survive, at least not where you can say that you’re making it on your own. You can pull yourself by the bootstraps only so much when you have an anvil on the boot. And between holding out for that comfortable 60K job and taking the very readily available 35K job, guess what: you’re taking that 35K because your stomach doesn’t like being empty. You’ll rent a corner in someone’s apartment and pay an amount that, in any other city, will grant you your own place.
Really, no joke, that’s what making it in NY amounts to nowadays. If you make under a certain amount and you’re not living at home, you rent a corner in someone’s living room, often with no rental agreement or sublet contract, still lose more than half your monthly income on that rent, make your bill payments best you can, and eat on credit. And you know, maybe it’s just me and I “don’t understand” what it’s like to be a New Yorker (no joke, heard that from a few of my peers…uh, I lived in this city for most of my life already), but I think that if you’re pushing at 30 and live in this city, you deserve something more out of life than a corner in someone else’s apartment and getting into debt to have food in your stomach. Someone who’s working their ass off to survive deserves better than living hand-to-mouth until their forties. And food is expensive, especially if it’s not coming from a box or a can. Don’t ever, ever wonder why people always go for fast food when broke: a salad is $10, a burger is $3. Math.
And unfortunately, it’s not just in NYC. Any major city has this sort of stratification, especially where the cost of living is out of alignment with salaries. People wonder why their college-aged kids aren’t leaving home and starting their own families. Simple answer: they can’t afford to. And loath though I am to admit it, there’s a pretty fair possibility that they never will, depending on their situations.