What is the True Cost of Living in NYC?
Everyone dreams of making New York home, but not many can foot the costs of it. With $15 hamburgers and $200-per month gym memberships, the city’s reputation for being one of the most expensive in the world is well deserved. The income taxes alone are some of the highest in the country at between 7% and 12%. And that’s before we even get to the costs of keeping a roof over your head. Taking everything into account, the cost of living in NYC is at least 68.8% higher than the national average. If you live in central Manhattan, it’s even worse with the cost of living more than double the national average.
If you’re thinking of making a move to NYC, then it helps to fully know what you’re getting into. Here’s the data on what it costs for housing, food, transportation and other living expenses in the Big Apple.
Cost of renting in NYC
As everyone who’s lived there knows, the rent is way too high. This shows no signs of abating either, in fact, it’s going up. In 2017, the median annual asking rent in Manhattan was a crushing $3,150 and in Brooklyn, it was $2,500. Things are a little more affordable in Queens but not by much. Rental prices will vary widely across the city and change from one neighborhood to the next. The U.S. census defines “affordable” as any household with a rent-to-income ratio of 30% or lower. Meaning that if you’re paying 30% or less of your income on rent, you’re doing pretty well. Most renter’s in New York Cory are running close to 50%.
Cost of buying in NYC
Rents may be crazy, but when you start looking at house prices, you start to see why most people rent. In 2017, the median home price in Manhattan was $1,567,000. For Brooklyn and Queens, it was $920,000 and $629,000 respectively. Just like rentals, these are also going through a price surge which could put them further out of reach in the years to come. But with the present buyer’s market in the city, it is possible that you could get a low-ball offer accepted. Also, like rentals, prices will vary widely from each borough and neighborhood to another so do some shopping and asking around to see what’s on offer.
When considering whether to buy or rent in NYC, it’s important to think in the long-term. At a certain point, it’s more economical to buy rather than rent. Recent data from StreetEasy found that this tipping point is 5.6 years. If you’re moving to NYC for a long-term job, then try to see yourself five years from now. Think about how your needs might change and whether any place you’re interested in will meet those. Mortgage payments will be less than your rent, so if you have enough to cover the down payment on a home, it’s well worth considering the buying option.
Cost of transportation in NYC
After housing comes transportation as the next most expensive cost of living in NYC. Most New Yorkers don’t have cars, and it’s easy to understand why. Traffic jams aside, the cost of annual auto insurance rates often exceeds $4,000, well above the national average. Parking spaces are almost like a piece of real estate with the average parking rate in downtown Manhattan being $533 a month. It’s a bit cheaper in other parts of the city like Brooklyn and Queens, but you’ll still be shelling out a few hundred dollars each month. Let’s not forget gas either which is often 5-10% higher than the national average.
The subway is the preferred mode of transport in the city which can quickly get you just about anywhere. But that convenience comes at a high cost with a single ride costing $2.75 a ticket and an unlimited monthly pass costing $121. This is almost double the national average of $67. It’s the same when it comes to using Uber or hailing a cab. Uber rates along in NYC are the highest in the whole country and the seventh highest in the whole world. The one advantage for New Yorkers when it comes to transportation costs is that most people don’t have a car. The costs of it are too high, and the cities extensive public transport makes it unnecessary. This means you won’t have to worry about gas, insurance, and parking when making up your monthly budget.
Food costs in NYC
So far it’s looking like everything in the city costs double the national average. Sorry to say it but it’s the same for food. The cost of a trip to the grocery store is 28-39% higher than the national average. To take an example, if you spend $200 a month on groceries living somewhere else in the country, you’ll spend $260 in NYC for the same amount. For dining out, it’s even worse with the average cost for a meal being $48. This is what a survey by Zagat found which is slightly above the national average of $36. All that said, NYC has such an abundance of food options, and with such competition, you can probably do a lot better than that.
Entertainment costs in NYC
After covering costs for all the essentials, you’ll want to enjoy yourself on the weekend. Well, surprise, it’s above the national average. The cost of a movie ticket is about $14, the national average being $10. You can take heart though with knowing that the price varies a bit depending on location and theater company. Broadway tickets are also on the rise with theatergoers paying an average of $103.88 this season. Which is an increase of 5.5% from last season. As this 2007-2018 chart shows, that can only be expected to climb higher. One benefit New Yorkers can take though is the abundance of free events available all year. The cities many parks almost always have something going on. Many museums also do free events, and if you’re a student, you can expect some pleasant discounts.
NYC is undoubtedly an expensive city to call home but all the same, it’s still one of the most desired cities in the world to live in. You might pay quite a bit more than living elsewhere, but you won’t find the same level of excitement and opportunities as you would here. There are still plenty of free things to see and do in the city and if you’re a student a bit of planning can help you get settled.
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