Tag Archives: housing

Housing Dilemma

Gantry State Park

Last year, when our family went up to Buffalo to visit my brother-in-law, I saw a sign at the local supermarket. It was advertising some contest where you could win $250,000. It said, “Win $250,000 and buy your DREAM HOUSE!!” With $250,000 you can buy a beautiful house in a great neighborhood in Buffalo. With $250,000 in NYC where I live, you are most likely not buying a house…any house. Maybe a foreclosure or short sale in need of serious repairs in a bad part of town. With $250,000, you can put a 20% down payment on a dream house!

When I got back home, I told everybody how frustrating it was that $250,000 could buy a “dream home” upstate, but was not enough to buy anything down here. Most people said that they wouldn’t want to live in Buffalo anyway! Too cold and too much snow. That may be true, but there are many nice parts of the country where housing costs aren’t as high and the weather is a lot nicer. If I was single or if I was married but did not have children, there would definitely be more options. However, when children are added into the mix, most people who want a little more room as well as a neighborhood with good schools.

Reading various blogs, there are a few methods I see related to dealing with high housing costs. I think they are great methods, but they may not necessarily work in high cost of living areas. Here are a few suggestions I’ve heard to reduce housing costs and my explanation why it might not work in an expensive city:

House Hacking

House hacking is basically buying a multifamily house, living in one unit and renting out the other unit to cover all or most of your mortgage and expenses. Looking at multifamily houses in areas where I would consider living, which consists of a safe neighborhood, good school district, and decent transportation options, I’d be looking at around $1,000,000. With prices in that range, I’m not sure house hacking is a viable choice for most people in reducing their housing costs. The closest “hacking” I’ve seen in NYC is perhaps “rent hacking” when young and single New Yorkers share a 3 bedroom apartment which rents for $3000, paying $1000 each. This reduces their housing costs as it would cost about $1500 for a one bedroom in a similar location. Rent hacking is less ideal when you have a family.

Note: The numbers I’m using are rental and housing costs in and around my neighborhood. I live in Queens and not in Manhattan or a “hip” part of Brooklyn. It’s not a hip part of Queens either, but it has great schools, it’s very safe, and has great transportation options.

Buy a fixer-upper/Stay in your starter home

Another common suggestion to people who struggle with housing costs is to tell them to buy a fixer-upper. You can buy a house for cheap and slowly update the house as you live there. Some homeowners have the urge to upgrade to a bigger or nicer home when it makes more financial sense to just stay in their current starter home. I did a quick search in my neighborhood and surrounding neighborhoods where I’d consider buying. I saw a small 3 bedroom 1 bathroom starter house which is a short sale. Even being a distressed property, it is going for $649,000.

Move farther away from downtown

Those living in New York City have the longest commute compared to other big cities. Most people already live farther away from Manhattan where the majority of the them work. The data shows that NYC dwellers have the longest commute which is about 35 minutes, but many people I know have commutes of at least an hour or more. Some people move EVEN FARTHER away from their jobs to find a house they can afford by going to the suburbs of New Jersey, Westchester, and Long Island. Some even farther away! Three percent of the NYC workforce are “super-commuters” who travel at least 90 minutes or 90 miles each way to get to work. While living farther away might reduce your housing costs, you definitely wastes a large portion of your day commuting. Plus, you increase your transportation costs and many of the suburbs surrounding NYC have onerous property taxes which you better take into account when looking at the lower housing prices. In Long Island, many houses have annual property taxes of over $10,000.

Rent instead of Buy

Too expensive to buy? Just rent! Problem solved right? If the choice was to buy a $700,000 property versus rent for $1000 a month, the choice would be a no brainer. But what if the choice was between buying a $700,000 property or renting for $3000 a month? The decision becomes a little harder. In NYC and in a few other cities, there is a housing option known as a co-op. When you purchase a co-op, you do not technically own the apartment unit, but you own shares of a co-op corporation that owns the building. There is a monthly maintenance fees that covers expenses such as heat, hot water, property taxes and staff salaries. For many in NYC, co-ops are their best bet to own property (though technically they’re not property owners but shareholders). Co-ops are more attainable compared to a house, but they aren’t that affordable either. In my neighborhood, a three bedroom co-op would cost over $500,000 and have a monthly maintenance fee of at least $1100.

As I mentioned earlier, if I were single or married with kids, there would be many more options available. However, with two kids, I would love to find a place with a little more room in a neighborhood with good schools and decent transportation options. We live in a co-op that is about 800 square feet which is a converted 2 bedroom. The second room is very small but since my kids are small we can put them in bunk beds for a little while. So we have a few more years to figure it all out.

What do you do to reduce your housing costs?

Is NYC Really That Expensive?

Freedom Tower
Yes it is. End of post. With the way I often complain about living in this high cost of living city, I was tempted to write that three word post. I have to admit, I am a bit of a complainypants about the costs of living in NYC. But is living in NYC really that expensive?

Well of course it is expensive. That is undeniable. NYC is often listed among the most expensive places to live in, both in the United States and worldwide. However, the biggest reason why NYC is so expensive is its housing costs.

The average rental price of apartments in Manhattan and Brooklyn are crazy. According to the Daily News, the average rent in Manhattan is $3,902 and in Brooklyn $2,411. Home prices are equally obscene. In Manhattan, the average is $1,303,421 and in Brooklyn, it’s $959,907. The media loves to throw out those numbers to make a point, but I think most can find a suitable place for much less than the average rent and home price cited above. It is pretty much impossible to avoid the high cost of housing, unless you can somehow live rent free because a long lost relative left you a paid for apartment or some other crazy scenario like that. I’ve listed some ways you can try to reduce the costs of housing in a previous post that you may want to check out.

Now, let’s move on to reasons why living in NYC isn’t as expensive as you may think.


In many cities and towns, having a car is pretty much a must. For a family or couple, a two-car household is also a necessity. Having to buy a car or two cars and paying for maintenance, gas, and insurance costs a lot of money. In New York City, often times, a car is not necessary. For $2.50 a ride or $112 for unlimited rides for a month, you can pretty much get to any part of the city. The transit system in NYC is pretty amazing and it is open 24 hours a day. Depending on where you live in New York City, most neighborhoods are very walkable. There is often no need to spend money for a car, or even if you have a car, there is no need to waste money on gas. Where I live now, I can walk a few blocks to a supermarket, a drugstore, a movie theater, restaurants and plenty of other places where a person would want to go. While I do have a car because I commute out to the suburbs for work, I know many living here who don’t have one and have no need for one.


There are so many things to do in New York City. Sure, there are plenty of expensive things to do, but there are also many cheap and affordable things to do. My favorite attractions include the museums, Governor’s Island (with free ferry service and free events), the Highline and free movies and ice skating at Bryant Park (not at the same time of course!). Actually visiting and walking around the various diverse and eclectic neighborhoods is entertaining enough for me.

I could compile an exhaustive list of the free and affordable things that you can do in New York City, but Erin who blogs at BrokeMillenial has already posted an extensive list here.

Stefanie who blogs at The Broke and Beautiful Life also has a list of posts about cool and free things to do in NYC. Just click on the NYC tab on her blog.

Groupon type deals
I’ve read some people mention that there are not many Groupon type deals in the areas where they live, but there are plenty in the NYC metro area. While Groupon does not always provide good deals, they do sometimes offer great deals for activities that you may be interested in. Groupon and other deal sites often have deeply discounted deals for museums, tours, sporting events, among other events.

Thai lunch special


I think there is a common misconception that New York City is expensive when dining out. Sure, there are plenty of outrageously expensive restaurants here, that doesn’t mean you can’t have a great affordable meal when dining out. You don’t have to go to the fancy Zagat or Michelin rated restaurants to have a good meal. My wife bought recently bought lunch for $4.75 (including a bottle of water) near where she works. No this was not in Manhattan, but even there, cheap eats are available. Also, with restaurants, Groupon deals and Restaurant.com deals are available to get a discounted meal at various places.

Cost of Goods and Services

Once again, similar to everything else in New York City, I think the cost of things here can be very expensive or it can pretty affordable. You just have to know where to look. It depends on what you’re buying and where you go to buy it. For many people, most things they purchase is purchased online so it doesn’t matter where you live. For things like fresh produce and groceries where it is much more difficult to purchase online, I still do not think the price in NYC is necessarily higher. Of course, if you do your grocery shopping in Manhattan, the options for lower costs may be harder to find. Read my post about saving on groceries here.


I think one advantage of living in NYC is that there is a lot of competition for your money. If you don’t like the service or price at one store, there’s probably another store that offers the same service or product very close by. It is not like in a small rural area where a store has a monopoly. You can use this to your advantage by negotiating the price or by shopping around.

Thrift shop/Freecycle/Craigslist
Another advantage of living in such a big city is that there are a lot of people getting rid of their stuff. There are many thrift shops and many people who donate some gently used items. And in a well-to-do neighborhood (think upper east side), you can score some pretty nice things. There are also many people selling things on Craigslist at a deep discount or people using freecycle to give away things they no longer need. Because of the amount of people here, you can often find what you’re looking for.

Nick who blogs at Pretired.org had an interesting post about great cities and listed factors including safety, affordability, walkability, Transit, bicycle friendliness, cleanliness, weather, infrastructure, open space, culture and aesthetic beauty. Based on these factors, I think New York City scores very high in all of these factors, except maybe the affordability factor. However, if you live frugally, you can enjoy the city’s amenities and cultural offerings. I don’t feel deprived living here (well not most of the time!), but my wants and needs are modest.

Does the media portray NYC living as outrageously expensive? Would you ever want to live here? If you are a fellow New Yorker, what other ways is NYC not as expensive as it seems?

Week in Review

My wife and I went to an open house at this luxury condo (not co-op) for fun and to check out how the wealthy live.  A 2-bedroom and 2-bath, 900 square foot apartment was over $600,000.  Maintenance was over $1000.  They did have a swimming pool, game room, children's playroom, doormen, porters, gym and many other amenities, but that is just way too expensive.

My wife and I went to an open house at this luxury condo (not co-op) for fun and to check out how the wealthy live. A 2-bedroom and 2-bath, 900 square foot apartment was over $600,000. Maintenance was over $1000. They did have a swimming pool, game room, children’s playroom, doormen, porters, gym and many other amenities, but that is just way too expensive.

I only posted one time this week. It seems that there are just not enough hours in the day. I’m not sure if I’m allowed to post an “update” or “roundup” as I’ve only posted once, but I didn’t find any rule against it in my blogger’s handbook. As I mentioned in my one and only post this week, the Living Rich Cheaply family would like to buy a place. While I don’t feel that renting means flushing money down the drain…we’ve been renting for awhile now and feel that this is the neighborhood where we’d like to stay. I’d say that we would stay for a minimum of 5-7 years. A 2-bedroom co-op is what we’ve been looking for, and even if we eventually had another child, I think it’ll be fine. That’s what bunk beds are for right?

Interesting posts this week:

I chose posts that deal with housing as that is what is on my mind.

Holly from Club Thrifty posted in September Budget Breakdown and Update that the Club Thrifty family will also be house hunting. And in Things I Hate About My House, she posted pictures of her house and explained what she likes and dislikes about it. I must say her house is immaculate even with two young kids. I could post 2 pictures of our 600 square foot apartment and you could see the entire space. I won’t do that because unlike Holly, our place is a bit messy. I’m pretty jealous of the space they have and the prices of houses there. Makes me want to move to Indiana.

Mr. Money Mustache is also moving and posted How (and How Not to Buy a House). Check out his sage advice as to what to consider when buying a house.

Tara from Streets Ahead Living posted When You Realize You’ve Had Enough where she writes that the high cost of housing and taxes here in NYC has made her decide it might be time to leave this high cost of living area. I absolutely know how she feels. When my wife and I see prices of houses in other areas and visit friends and family in lower cost areas with lovely houses, we want out of NYC too. But with both of our parents here, plus many other family and friends, we don’t know if we could leave.

Matt from Mom and Dad Money posts Where Should Buying a House Fit in Your Priorities? and also Is the Mortgage Deduction for Real? Check out Matt’s list of financial priorities before you decide to buy a house and make sure you don’t overvalue the benefit of the mortgage interest deduction (or assume you can use it).

Todd posted in Modest Money Are You Watching Mortgage Interest Rates Surge Through the Roof? While mortgage rates are still at historically low levels, the recent jump put a crimp in a lot of people’s home buying plans. When I ran the calculations with the new mortgage rates, it definitely makes me think twice about whether we should buy.

Thank you to Frugal Rules for including me in the Yakezie Carnival.