When Half Your Income Goes to Rent

Jessica Ralston, 26 years old, was living in a Midtown West apartment with three roommates when they learned their individual shares of the rent would climb to more than $1,300 from about $1,000 a month. Although the apartment was large and the neighborhood is on the rise, Ms. Ralston, who works in a photography studio, decided to strike out on her own.

She found a studio on the Upper West Side through her broker, Ivan Jara of Citi Habitats, but privacy came at a price: $1,500 a month. The extra cost would have chewed through all her disposable income but for a promotion and raise that came just in time.

I read this story this morning about how 29 percent of households in New York City spent more than half their income on rent in 2011, compared to 26 percent in 2008, according to a report by the Community Service Society, and although I know it’s not uncommon, am still blown away when I read about four young people living together as roommates and needing to pay $1,300 each to make their monthly rent.

I also did some calculations: At $1,500 a month, Jessica Ralston would be paying $18,000 a year in rent, and knowing Citi Habitats, she would have also had to pay a 15 percent broker’s fee, or $2,700 by certified check. She’d also need to put down a $1,500 security deposit. You can see why it’s so expensive to move in the city, and why everyone desperately tries to look for that almost impossible no-fee apartment on Craigslist.

Ralston would also have to be earning at least $60,000 (or making at least 40 times the monthly rent) to avoid having to find a guarantor who needs to earn at least 80 times the monthly rent. After taxes, it doesn’t leave very much in terms of disposable income.

Gosh, I hope she negotiated that fee down. Armed with paperwork showing an excellent credit score, my tax return, and letters of recommendations from my employer and previous landlord, I was able to convince my broker to lower the 15 percent broker’s fee to nine percent (I asked for seven, but settled for nine). I’ve been lucky that my landlord hasn’t raised my rent after a year—and I’m not going to say anything until he brings it up.

Photo: Shutterstock/Horiyan


59 Comments / Post A Comment

OK honestly, I don’t get why anyone would do that. I live in New York City myself, and pay just over 1/4th of my income to rent. Don’t be snobby, move to a slightly less nice area. Manhattan is for rich people.

hallelujah (#802)

@The Dauphine Except for East Harlem! 127 & Madison represent. I was smack in the middle of the 2/3 and 4/5/6 & could get anywhere (save Brooklyn) in 20 minutes. Granted, the hood is not for everyone (vast understatment), but damn it beat paying twice as much in rent.

@The Dauphine Living on the border between Washington Heights and Harlem (Sugar Hill) is also an incredibly lovely area as well as affordable.

@armagnacforbreakfast Although with a grad student stipend, I’m pretty much resigned to the fact that even in affordable/commute-friendly locations, 30-40% of my income will be swallowed up in rent (right now I’m at 35%).

@armagnacforbreakfast Yeah. I don’t know how I could ever say, go to City College, or Columbia and not have to move back to Harlem (which is lovely! I loved living there when I moved to NYC after college) but 1,300 a month is too much money for rent in your twenties. It just is. So says I.

RachelG8489 (#1,297)

@The Dauphine That definitely requires having a high enough income for that to be possible. I am paying IMPOSSIBLY cheap rent for my place in the 100s on the west side- we’re talking below $700/month. But my take-home pay is only about $2100/month. It wouldn’t matter what borough I lived in- my workplace finds it acceptable to pay people amounts that don’t translate to our cost of living!

aetataureate (#1,310)

@RachelG8489 I think when we talk about fractions toward rent we mean gross, not net. The NYT doesn’t specify this (weird?) but that’s the general rule. So yes, below $700 a month is less than 1/4 of your gross, if your takehome is $2100 a month.

I get twitchy about paying more than 1/4 of my takehome. If I paid 1/4 of my gross towards my rent, holy hell, I’d be able to afford to live alone.

RachelG8489 (#1,297)

@aetataureate Yea, but no. I just did the math- my rent comes out to 24.7% of my gross. So I’m paying about a quarter of my gross income on rent for a pretty run-down apartment in the slightly ghetto but awesome northeast corner of the Upper West Side with three roommates and one bathroom.

Between taxes (federal, NY, and NYC), health insurance (1.25% of salary), dental insurance (about $13/month), 403(b) contributions (3% of my salary, because they match that much), and my flex spending account ($104/month, used for my metrocard), my takehome is severely reduced. My salary doesn’t sound nearly as low as it is as a pre-tax number!

I want to add- I’m not at all uncomfortable with how much I pay on rent, and I’m doing pretty damn well with budgeting these days! I’m contributing to my savings, paying off student loans, spending a little money on fun stuff and eating out when I want to. But there is really no way my rent could be any lower if I want to keep a reasonable commute time, and more importantly to me, if I want to retain my walking-distance access to my religious community. Young observant egalitarian Jews congregate in just a couple of neighborhoods in a couple of cities.

neener (#242)

40 times the MONTHLY rent, right?

And she should move to a cheaper neighborhood if she can’t afford it. It’s OK that some neighborhoods are too expensive for recent college grads to live in, as long as there are cheaper neighborhoods nearby.

Mike Dang (#2)

@blahstudent Oh good catch! Yes, annual rent would be insane. And—totally, I am all about making it work. If you are paying your rent and your bills, and you’re making it work for your life, great, keep doing what you’re doing.

moreteawesley (#545)

Every time I read one of these posts about rent in New York, I appreciate Philly a little bit more. I pay just over 1/3 of that and live in a tiny apartment, but in a reasonably nice area. For $1,500 a month you could get a swank apartment in Rittenhouse and still have money left over for dinner. The real estate situation up there is NUTS.

MikeTY (#3,731)

@moreteawesley but you’re living in philly. Philly may be good for women but its a horrible city for guys. I’ve lived in both places and the amount of single, successful women in Philly is very low. Unless you are in very specific industries, it also doesn’t have much in terms of career growth. I wish I could live in Philly but the downsides are just too high unfortunately so I have to pay insane rents.

bgprincipessa (#699)

I pay about 40% of my monthly income to rent (not in NYC). I have no idea if that’s too high, but my income isn’t very great and I’m okay with paying that cost to live: close to work; close to bars/restaurants; close to water; close to stores. It’s all about the pro/con weight.

lrodrigue (#1,315)

Bedford-Stuyvesant, Brooklyn: $625/mo for me, plus all the $4 sandwiches a girl could ever want. Anyone who says NYC is too expensive is silly, because, bed-stuy!

@lrodrigue Holllaaa. I moved to Bushwick two years ago and miss Bed Stuy so hard.

navigateher (#555)

I am in no way saying that NYC rents are at a very reasonable level, or that it is not expensive to live there. Over $1,000 for an apartment with roommates is way too much, and those fees are ridiculous. But these stories about people not being able to live where they want to / do what they want to for a living, or having to make sacrifices to do so (roommates, high rents, low salaries, competition etc.) seem to be everywhere, and as a no-nonsense person it is starting to get a little old. I mean, if you can’t live in an expensive area, move to a cheaper one. If you can’t get a job in your (highly competitive, creative, low-paying) field, consider changing it to another one, or deal with it. Not everyone gets to do what they want, it’s called life.

I know this is not a popular opinion and goes against what I feel is the “American” mindset, but where I am coming from, it’s starting to sound a bit ridiculous, and I’m having a hard time relating. Also, I don’t think I even have a point, just needed to get that out of my system.

liznieve (#37)

Completely. I don’t get the inability to work toward something and just expect it from the get go. What happened to working your way up, living in a shitty neighborhood, but also learning how to deal with living in subpar conditions and people you might otherwise not have intimate contact with? There are plenty of places in NYC to live for well under $1000/month in rent, and living in those places give you more perspective on life than living in an overpriced apartment in Manhattan because OMG SO MUCH CLOSER TO THE BARSSSSSS.

Ugh, maybe I just smelled a fart. Or a brat. Or a bratty fart. IDK.

@navigateher While I sort of agree with you on a gut level, that kind of thinking is its own slippery slope. If an area is pricing out recent college grads, public sector workers (teachers, sanitation workers, bus drivers), and the other low-to-middle income people needed to make a city function, it’s a MAJOR public policy issue.

Maybe Manhattan would like to be an island fortress populated only by millionaires, but who will drive the taxis, man the valet booths, educate the children, pick up the garbage? Is it fair if everyone who works in Manhattan making less than $100k has to also spend two or three hours a day (unpaid) commuting from the Bronx or Queens?

@liznieve And, to your point, one of the thinks that has made New York so successful as a city over the years is that the shitty and nice neighborhoods were all jumbled together in close proximity. The further we push “shitty” neighborhoods out into the suburbs, the less interesting of a city New York becomes.

For a city whose position in the global economy and ability to attract young, educated workers is largely based around its contributions to culture, this is a Problem. Unless New Yorkers want their city to become a soulless financial hub like Frankfurt. (I mean, I’m sure Frankfurt is lovely, but you get the point.)

@stuffisthings *things

liznieve (#37)

I completely agree, and certainly am not advocating for Manhattan to become some homogeneous nightmare of uniform wealth. I think economically integrated neighborhoods *do* still exist in New York, they’re just becoming fewer and farther between. I was speaking more toward the entitlement some youngs feel to live a certain lifestyle in the city that’s far beyond their means.

EvelynGarcia (#849)

My unhelpful advice is to move to a happening midwestern city (they exist) and live like a king on $20/hr! Rent a two bedroom in a cool and walkable neighborhood with a yard and a basement! Take international trips every year!

@EvelynGarcia This. I live in Grand Rapids, MI (Give us a few years and you’ll know who we are) and pay $510/month for a massive one bedroom in a good neighborhood that’s walkable to downtown and the more hipstery/arty Eastown.

TheDilettantista (#1,255)

@Sean Dailey@twitter I live in the Raleigh-Durham area of NC and pretty much love it here (I do get the NYC/big city blues sometimes, sigh). I pay half of $1080 a month for a nice, big, two-bedroom townhome in Chapel Hill and I work in awesome, happening downtown Durham. I work for an arts non-profit so I make very little money, but I can still afford trips and fun things. All the universities that are in the area keep things happening culturally, and our local food and restaurant scene is insane.

@EvelynGarcia Yup. Columbus, OH is super cheap and surprisingly diverse! We pay less than $1,000/month (total) for AN ENTIRE HOUSE (well kept, lots of character) in a cute area close to downtown with lots of shops. Not too shabby!

EvelynGarcia (#849)

@Amanda Webber@facebook Yep, Columbus rules. Our Vic Village 2 bedroom is $750. I mean!

Katzen-party (#219)

@EvelynGarcia I know; I tend to get really tired of the NYC IS THE ONLY PLACE mentality…but I guess that’s what I get for looking at the internet because All The Bloggers live there (even though you can theoretically blog from anywhere, right?).

Killerpants (#972)

@EvelynGarcia Amen. I’m from the midwest (hello ohioans!), but I live in a small east coast city (portland, me), and even rent here for my one bedroom in a great neighborhood with great restaurants and local market 2 blocks away and heart of the city 5 minutes away on foot, aaaand 2 blocks from the ocean is $780/mo (heat included, which is important here since heat costs $$$$).

Aaaaah yes, and I bet NYC folks get tired of us going “geez, NYC is not the only place on earth, why would you even pay that for rent, give us a break” and talking about our cheap(er) rents as much as we get tired of NYC-centricity.

City_Dater (#565)


Yes, I think we do get tired of the oversimplified “why don’t you move someplace cheaper?” as if all US cities were absolutely created equal. Many New Yorkers live here because the work we do is here and not someplace else with cheaper rents.

@EvelynGarcia Yup yup. I live in Tucson, AZ and have wonderful weather most of the year, make good money, and we have some amazing culture and events here. Not to mention desert and mountains and canyons to hike around all day long. Living is super cheap, too. When I read these NY stories I am horrified. My boyfriend and I make decent salaries, and we’re paying a mortgage, my student loans, and all of our bills with about 30% of our monthly income.

SHUTUP SHUTUP SHUTUP!!!! It is post like these that have created the estimates of population doubling in 15 years. We are getting over ridden with “Normals” from places like Indiana, Michigan, and NYC. The triangle is going to rapidly become the hell-on-earth which is the Atlanta metroplex. In the last month, they have flattened and removed 3 large forests near my house (Crabtree Valley, NCStates Umstead property, Lead Mine) to put in apartments for the onslaught. Please, I beg you, delete your post. Seriously.

If i were to put away 1/3rd of my income after taxes to rent, I’d be living in a place costing $900 per month. Even THAT sounds like wayyyyy too much money for me (although not for the city I live in).

Megano! (#124)

@redheaded&crazy Yeah. I pay $1100 a month inclusive, and I’m not even downtown! It is a huge apartment though.

@Megano! ughhhhhhhh I paid $750 in montreal, which a)is a ridiculous price to pay in montreal (although it was also a huge apartment) and b) felt like an insane amount of rent.

I predict that adjusting to paying Toronto rent is going to make me an unhappy camper for a little while.

Megano! (#124)

@redheaded&crazy Man, Montreal is even cheaper than Ottawa! Which is slowly becoming not so cheap because there are not enough rental properties.

thenotestaken (#542)

@Megano! Ottawa is surprisingly pricey! I’m in Montreal (cheap rent hollaaa) but I helped my dude look for a place there and to be in the city proper is pretty expensive! Not to mention my friend’s parents live in Sandy Hill and their neighbors are always asking them when they’re going to “get a student” because spare bedrooms in that area go for like $2000. My bf ended up in Hull for about $500 but the lack of grocery stores is astonishing.

mouthalmighty (#165)

Broker fees? What is this? I have lived in apartments my whole life and… nope. Not really understanding?

@mouthalmighty http://www.broowaha.com/articles/1691/apartment-brokers-are-lowly-scum

Maybe it’s just an NYC thing, but a broker’s job is to show you apartments, strongarm you in to leasing one that’s slightly out of your budget, and then you pay them a fee (usually equivocal to a months rent) for that service.

@mouthalmighty Finding an apartment in NYC can be pretty difficult so some helpful guides have taken it upon themselves to assist newcomers in the search. They do this for the measly fee of usually around 1.5-2 months rent.

Nowadays, some properties rent exclusively through brokers so you pay if you want to live there.

That said, I’ve never paid a broker’s fee in my life. It takes more work and you’ll have to hustle since apartments can go a day after listing. But that’s really a lot of money.

neener (#242)

@mouthalmighty i’ve only heard of it in NYC and boston. you can still scrounge stuff up on craigslist if you really hustle, but it’s a lot harder.

@blahstudent I’ve never used a broker. I simply refuse to. It’s really only slightly more work.

Megano! (#124)

I am so freaking glad that none of this is allowed in Ontario. Brokers, raising the rent whenever you feel like it, etc. Landlords are only allowed to raise the rent by 3% a year for current tenants. If they want more, they have to apply for it with the Tenants board (and the only really valid rason is if they did extensive repairs on the building), and they usually don’t go very high. And tenants are allowed to oppose it.

@Megano! all of this makes me feel slightly better though

This reminds me that the apartment I will be moving to in August will take up…. 85% of my student stipend. Sigh.

@myrna.minkoff just kidding. I actually did the math. It’s 90%

thewurst (#435)

@myrna.minkoff You’ve found a place? I’m impressed! We’re doing the stupid thing and waiting until we get there to find one.

@thewurst It just so happened that a friend of mine living in Brooklyn was looking for a roommate August 1st… totally a happy freak accident. Of course, the caveat of this is that the apartment is so expensive (it’s in Williamsburg, sigh). I’m really paying for the convenience of having a place when I arrive, with someone I know isn’t a psycho, that will allow me to bring my cat.

Also, I always like to point out that a person who spends more than 1/3 of their income on rent is considered “cost-burdened” by the US government. 1/2 qualifies you as “severely cost-burdened.” And the US is not generally known for the generosity of its poverty thresholds…

aetataureate (#1,310)

@stuffisthings Yeah, people are missing that the primary demo of “paying more than half of income in rent” is really seriously poor people who already live in the worst place you can think of and want to continue to live there by any means necessary.

Marissa (#467)

I work for a non-profit (not making the big bucks) and live in an expensive city (San Francisco), so about half of my monthly income goes toward rent and bills (I budget all my regular monthly payments including my student loans in one fell swoop). I guess this always seemed normal to me! I’m pretty frugal in many ways and don’t have any car/gas payments to worry about, so it has worked for me so far. I’m still able to put a decent chunk into savings each month, too.

But now I wish rent wasn’t so ridiculous here. Dagnabbit, Billfold!

IWannaBeKate (#1,323)

I live with the BF in a two bedroom place in Brooklyn for $1,775. We split ‘er up, and it’s exactly 42% of my monthly income, which saddens my heart. We get a lot of perks living there (central air, laundry in the building, a block from the subway, courtyard, rooftop, we love the area, etc. etc.), so maybe it’s worth it? I still seriously can’t wait to blow this popsicle stand and move out of the city.

MuffyStJohn (#280)

I pay just under half of my income in rent and utilities. I cannot wait to be let out of my lease so I can move somewhere less expensive (still not 33% of my income, but something more manageable). Thank God DC doesn’t have the insane broker’s fees to deal with (no, instead we have cutthroat apartment-hunting experiences modeled after something from The Hunger Games).

Manhattan below Harlem has been out of the price-range of most people since you started being able to walk around the LES in flip-flops without getting Hep B.

We’d all love to live in the exact neighborhood/location we want and pursue our dream career in the arts but most of us choose not to and don’t bitch about it. Get over it.

MikeTY (#3,731)

Obviously living in NYC versus a place like Columbus, OH is comparing apples and oranges. Everyone has their own view of what’s valuable. For me, living in the most vibrant city in the US if not the world, filled with motivated, super intelligent, creative people is worth the 35% i pay in rent. I meet people from all over the world who live in NYC – its something that doesn’t really happen in any other city. Having a large house in some boring suburban neighborhood is simply not worth it for me. For others, that lifestyle is not boring but what they prefer. I’m sure when I have kids I’ll move out of the city but for now the networking in my career field, the access to some of the best restaurants, parks, cultural options, etc… all make over paying for rent worth it. Obviously it would be great if it was lower but its simply supply and demand.

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