In today’s NY Post slugged ‘its basically impossible to find a rental in Manhattan’ we are alerted to an average rent of $4,081. This comes on the heels of the SFChronicle announcing $3,458 being the average for the Bay Area.
These headlines may (I’ll give them the benefit of the doubt) be factually correct, but I find them somewhat disingenuous in the way that they elicit reactions in people. People who read these facts think that ‘its basically impossible to find a rental in Manhattan’, or the Bay Area, and if they could it would come in at an astronomical rate.
Firstly, many people don’t understand skewness when it comes to averages. Here’s two different ways to average $4,081.
As you can see, while the average (arithmetic mean) remains the same in both data patterns, I show how 4 properties of $999 and 1 property over $16000 in rent create the same ‘average’.
The next problem renters face is occupancy rates. The Post indicates that vacancy rates are at an all time low of 1.07%. They don’t mention that 1.07% is actually quite a lot when you consider just how many apartments are packed into Manhattan. As of the 2008 census it was 2,581,170. Some speculate that with new builds and subdivisions that number may be closer to 3 million today. So we are looking at about 32,000 vacant apartments.
Under Occupation is not measured
The reality is that many apartments in Manhattan include splitting or sharing the rental with room mates, if a 3 bedroom in Midtown typically has 3 young professionals splitting the rent, and one returns home to the Bay Area, that’s a rental option, and one that is likely to cost a lot less than $4,081.
What’s happening in Manhattan?
Rents are high, but we are experiencing distribution skew here. A quick look at Zillow will show rentals like:
- Studios in Spanish Harlem under $1500
- 1 beds in various locations (downtown, midtown) $2,000-2,500
- 2 beds around the city $2500 or less.
The 2 Bedroom in Chinatown goes to show that property is available, and ‘somewhat’ affordable. You have to come at things a little differently in Manhattan, if you are moving there for work then you aren’t likely to aim for a 2 bed so you have a spare room for visitors from Kansas, you’d be getting a 2 bed to share it with someone, that’s two salaries to split the rent.
Suck it up, buttercup
There’s no doubt that accommodation in big cities isn’t cheap, but if you want it hard enough, you can make it work. Unlike the NY Post article it is very possible to find a place to live. If you’re young and moving into a city like this for economic migration reasons, you’re coming in poor, with a goal of hitting the big time.
Embrace that feeling – it’s actually fun to be poor and make it work. I’ve moved to a big city 3 times now:
1st month in a hostel with a shared room with a bunch of other guys, 2nd-8th month in a 100-150sqft room, shared bathroom, no kitchen, 8-18th month, split a house with a co-worker.
1st month in a crappy town called Motohasunuma in (perhaps this apartment) 2nd-12th month in a town called Tanashi (translated to the land of no rice) 13th-36th in the hip town of Shimo Kitazawa.
1st year Harlem, illegal duplex apartment. 2nd-4th Brooklyn (first purchase)
If you want to live in Manhattan, it’s very do-able. But if you are coming in from a place of not very much wealth, then be prepared to make some sacrifices. From my experience, an apartment in Brooklyn or Queens would make a much better option, as they have more of a neighborhood feeling, and most locations are quite accessible for Manhattan.