Is The Rent Just Too Damn High?
I recently read this article, which suggests that there may finally be some relief in sight for Manhattan renters:
It called to mind a recent conversation with a colleague in which we were lamenting the difficulties faced by the first-time NYC renters.
[Anybody remember this guy??]
I moved to NYC from my hometown of Ann Arbor, Michigan in the summer of 1991. Bright-eyed and bushy-tailed for sure, I had a good job with Citibank paying $31,500/yr and was feeling awesome. $31,500 in 1991 certainly didn't put me anywhere near penthouse territory, but I was able to find a great affordable duplex studio at 98/Amsterdam for $775/month.
[790 Amsterdam Ave, NYC]
[Who’s this handsome gentleman? Can I please have his hair??]
In NYC landlords generally want to see tenants earning around 40x the monthly rent. So at $775/month, I was good to go ($775 x 40 = $31,000). Yay! Fast-forward to 2016. The average price of a studio rental in February was $2,191/month [CH Rental Report], requiring a salary of ($2,191 x 40) = $87,640. According , the average starting salary for recent college grads is $51,000 [bitly http://www.simplyhired.com/salaries-k-college-graduate-l-new-york-ny-jobs.html] .. So the bottom line is this: the average starting salary today pays less than 60% of what's needed to rent the average starter apartment.. D’oh! So what to do? These are the usual remedies:
1. Pay the year's rent up-front + security deposit (what? you can't cut a check for $89,831 on your $51K salary?)
2. Get a guarantor - this is the usual route, but doesn't work for everyone (1991 me included). The guarantor must make not 40, but 80x the monthly rent, live relatively close by (most NYC landlords prefer NY, NJ, Conn. Tx, Fla, Ca are rarely excepted because they are homestead states.. tough for landlords to sue you there if things go wrong), and most importantly, be able and WILLING to provide FULL financial documentation (tax returns, employment letter, bank statements, etc.)
3. Some 3rd party services such as Insurent http://www.insurent.com/ have swooped in to pick up the slack .. for a fee. It will cost you (I've heard about 1.5 months rent) but if your job and credit are solid, this may be an option.
[To see what’s needed to rent a NYC apartment under normal circumstances please see my video tutorial: https://www.youtube.com/watch?v=SwBHOkhb_NM&feature=youtu.be] Unfortunately for many people these are just not feasible solutions. And then there's that other issue... For many NYC newbies (including 1991 me), moving here is a statement of personal ambition & independence. Having to involve parents or take on even MORE personal debt just to get started is, to say the least, a let-down. And what about the future of our beloved city? What happens when the fresh blood (new hires) and creative folks (artists, musicians, etc.) who bring the magic can just plain no longer afford it? Will NYC come to mean No, You Can’t?
New York City is in a perpetual state of evolution, I have no doubt she will continue to grow and flourish. Let's just hope that the barriers to entry don't become completely insurmountable.