Friday, July 23, 2010

How to Live Cheaply in New York: Housing

This is part of a series of living cheaply in New York. See previous post: Grocery shopping

New York has the highest housing cost in America:$4,300 per month for a two-bedroom, unfurnished luxury apartment. How can you cut down your costs if you want to live in the Big Apple?

Many people in New York live with roommates for far longer than people in other parts of the country. It's not unusual to share an apartment with people you're not related to into your thirties or forties here. There are obvious drawbacks to this -- lack of privacy, living with someone else's stuff, having a roommate in general -- but a lot of benefits like halving rent and utility bills, a built-in social life, and someone to water your plants when you're on vacation.

Seriously, if you are moving here and do not have a fancy high-paying job, just expect to have roommates. And expect to meet them on the internet, usually Craigslist or a fee-based site like It usually works really well -- I'm still very good friends with three of my first roommates from here. And if it doesn't, well, hopefully you moved into a share so you can move out whenever you want.

There are a couple different ways people share apartments here in New York: subletting, sharing, and co-tenants.

In a sublet, you rent the apartment from someone who probably doesn't live there. They can charge up to 10% over their agreed rent if they leave the place furnished. This works well for short-term arrangements, like if you're here for three to six months. Many sublets are illegal because the original tenant doesn't follow procedure, especially in co-op buildings, so I don't recommend them for sub-lessees.

Sharing is when you move into an apartment where you're not on the lease. One or more of the people who live there are on the lease, but they agree to let you move in and share the space with them for X amount of rent. This is less risky than subletting -- tenants in New York are allowed to have a roommate not related to them. The landlord cannot prevent it, and you're given rights in terms of eviction that sublessees don't always enjoy. If you sign an agreement regarding the security deposit and other particulars with your roommates, there's no reason this can't work out very well for you (my first two and a half years in New York were this type of arrangement). Another benefit is that you often just have to give 30 days' notice and can leave whenever you want. Just make sure you can either pay your rent directly to the landlord or trust that your roommate is doing it for you.

Co-tenanting is when you sign the lease jointly with a roommate (or several!). You'll all have to be approved for the lease via credit check, income (40X the monthly rent is a common requirement), etc, or have guarantors. Each person is individually responsible for the entire amount of rent, and if one of you wants to leave, notifying your landlord does break the lease and may involve penalties (or more likely, that person just leaves and the others rent out the room as a share to make up the difference). This is the arrangement I had with my last roommate and with Peanut.

You can also live alone in New York -- I did it on $35,000 a year and it was awesome. I had a tiny one-bedroom apartment but studios are also common.

Rent stabilized vs. rent controlled
I'm hardly going to get into this -- it's basically impossible to get a rent controlled apartment unless you're related to the person who's still there and have been living with them until they die. And then the apartment has not been updated in so long, it's almost unlivable. Most apartments I've lived in are rent stabilized, which limits the amount the rent can increase per year. That's likely to be the case for any apartment priced below $2,000. The city does maintain a list of rent stabilized buildings, in case you're interested.

Longer Commute
One great way to reduce your housing costs is to not live in Manhattan, or to live in the "undesirable" parts like Harlem, Hamilton Heights, or Washington Heights. Moving into Queens or Brooklyn makes rent MUCH more affordable and often doesn't extend a commute by all that much (it actually shortened mine). Moving to the Bronx, Staten Island, or New Jersey are also viable options, but I don't prefer the commutes.

Other Housing Costs
Other common housing costs to watch out for in New York include application fees, broker's fees (one month to 15% of the annual rent), utilities (Con Ed keeps raising electric and gas prices, but heat and hot water should be included in all large buildings), cable/internet (many large buildings have contracts with either Time Warner or RCN, which preclude you from getting a better deal somewhere else), and security deposits. New York landlords are almost infamous for failing to return security deposits (which cannot be used as last months' rent, so if you have problems, start with the attorney general's office and file a rent security complaint form. Related, "key money" (a deposit paid to a superintendent to get the keys) is an illegal fee, and you should also report that to the attorney general if you are asked to pay it.

If you live in a luxury building, doormen and other staff expect a tip at holidays. We gave our super $60 last year and will probably do so again this year. Unfortunately, people do expect to get tipped for doing their jobs.

How do you keep your housing costs down? Would you take in a roommate as an adult if it meant you could live in New York City?


  1. Living alone is quite a rarity in NZ (or at least in Auckland) - going flatting with others is a rite of passage (either subletting or co-tenanting, as you define them).

    I'd say having multiple people on the lease is rare - mostly LLs just like to deal with one person. Some real estate agents will insist on all tenants signing the agreement though. There are occasionally situations where rooms in a shared house are rented individually (ie each person pays their rent directly to the LL rather than a head tenant having the responsibility for everyone) but that's rare, too - too much hassle for the LL generally.

  2. One extra recommendation (and yes - I moved there myself) is Hoboken, across the river from Manhattan. My commute to downtown on the Path is 12 minutes, and rent for a large 2 bedder is $2200. Much better deal than I previously had in the lower east side. The other advantage of NJ is that you don't pay the NYC city income tax...

  3. $2200 is still a lot if you're trying to keep rents down. I live in Brooklyn, about 30 minutes from Manhattan on two subway lines and I pay $1800 for a large (1300sf) 2 bed/2bath in a nice, safe, green 'hood with lots of amenities. I don't have 30 bars or restaurants to choose from though. When I did, I paid $2300 for a small 1+ den in a walk-up. Swings and roundabouts!

  4. You're right, anonymous -- Jersey is an affordable option and I know a number of people who make that commute. Thanks for the reminder!


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