Frugal Life in NYC: Housing

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I’m the first to admit that not only am I not well-versed in housing economics, I can honestly only hear/read so much on the subject before I space out and start singing “Spanish Flea” in my brain.

Fortunately, this article on the realities of home ownership both lays out an apples-to-apples comparison of renting or buying and deconstructs some of the myths of renting (renting is throwing away your money, owning your own home is a forced savings plan, etc.) far better than I ever could.

So, what does this all have to do with frugal life in NYC? Well, I spent some time using the interactive widget on NYTimes.com mentioned in that article.

Right off the bat, buying in NYC — even something in my unfashionable neighborhood — definitely won’t be cheaper. So, let’s say I theoretically move out of NYC, but remain in the northeastern US (current median home price $244,300). Initially, it appears as though after 6 years, I’d have more money if I owned a home rather than if I rented… but I don’t own a car.

If I consider the additional cost of one car (using the national car-cost averages I cited last time) as a utility I would now have to pay (while also factoring in the heat, hot water, and municipal water bill that are part of my rent now), buying becomes better than renting after 26 years.

And that’s assuming I just have one car. Lower housing prices, particularly in the north-east, often mean longer commutes, which would possibly make two cars a necessary evil.

I could go on like this for a while, inventing various scenarios and coming up with plausible figures to plug into the calculator, but I think you get the general idea:although many NYC rents often appear to be exorbitant, factoring in transportation costs can often mean that you’re paying nearly as much as you would for a suburban mortgage + car(s).

There’s still one last factor I didn’t cover here, because it’s something that can’t really be quantified — the simplicity of renting.

Here’s the best example of what I mean: I have a subscription to Consumer Reports and with nearly every month’s issue, I read comparisons of products that, as a renter, I will never have to research, purchase, repair or replace. Stovetops, water heaters, kitchen counters, leaf blowers, gas grills, refrigerators, roofing, desk sealants… a seemingly endless list of stuff.

It makes me wonder, how many hours would I spend just thinking about those things? How much of my life would be taken up by wanting/buying/fixing/shopping for all that stuff? Suppose I could remodel my kitchen — would food taste better if it was prepped on a slate countertop? Would a $4,000 Viking range really make me a better cook?

Renting where I live forces me to step off that treadmill of keeping up with the Joneses — even keeping up with the frugal Joneses across town who do all their own appliance repairs and home remodeling.

Do you still favor buying rather than renting or is a backlash against home ownership long overdue? Sound off in the comments below or over on Facebook.

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7 thoughts on “Frugal Life in NYC: Housing

  1. I like buying BUT I also like working on my house almost every weekend. Often I think people get on the bandwagon ‘I have to buy, I have to buy’ without really thinking about what their individual lifestyle is really like.

    1. I think part of that “I. Must. Buy.” mentality comes in part from the fact renting is still kind of… sneered at a bit. Like, renting is for people who are too young/too poor/too irresponsible (pick any) to own a house.

  2. Your reasoning makes perfect sense. As long as you like the apartment and the neighborhood, stay where you are. We never got ahead of the game with buying three houses, since we refinanced to put in a new kitchen, or a new roof, flooring, a pool, etc. and we never spent the kind of money that the Joneses do. We rented for ten years and it was almost as good as owning. I admire you for “step[ping] off the treadmill.” Unfortunate events gave us the money to pay cash for our cheap little house in a run-down neighborhood, but we like living here more than any other place we’ve lived. We have some great neighbors, including Tom’s two sisters. Now that we’re retired, it’s helpful not to have a mortgage. But you’re young enough to live how you wish now; you might change your mind in ten years and want to buy then. It’s never too late.

    1. Between Dave and I, with each of our parents in different houses all over the place… eh, we’ll just wait for one of ’em to kick off and then we’ll slip all our stuff in during the will reading. We call it our Hermit Crab Homeownership Plan. :D

  3. First, I’m really liking the new Gezellig Girl. Now, as a New Yorker trapped in a Chicagoan’s body, I’ve been thinking the very things you document so well here for a long time. Take the need for a car out of the equation and suddenly the playing field starts looking pretty darned level. Rent costs aside, the costs of life in New York are on par with other big cities, I think. And finally, costs aside period, when you step outside your door, you are in New York City. I’m looking for some cool closer here, but honestly, I’m suddenly just struck dumb by pangs of New York longing. Dang.

    1. I have been thinking about doing a cost-of-life comparison post too, because it’s not as insane as people (read: most tourists) think it is. It is about comparable to any other city and there are a lot of bargains to be had.

  4. Once in a while I get hit with homeowners-lust (though I’ve cut out so much design blog reading to curb that feeling). We rent in one of the most expensive cities in the world to buy and we’re so lucky that we live in a co-op with reasonable rent in a great area. We don’t have a car, we bike most places and we walk to get groceries. We’ve done the rent buy calculator and it’s so much more affordable to rent. We love our city and we love where we live.

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