Not true, you can find cheap places to live, if you're willing to live outside Manhattan. Jersey City, Queens, BK, are all viable options for the scrappy founder.
Places like Prospect Heights, Crown Heights, and Clinton Hill are gentrifying quickly, and rents are getting up near the $2k month for a 1 bedroom mark. It's just not sustainable.
I think on of the biggest problems is looking for a reasonable place to live in NYC is a total beat down. It takes time, and diligence and you can become disillusioned very, very quickly. You can also get screwed if you are new and don't know the various neighborhood profiles. And brokers... I don't even want to get started on brokers.
I live in a 1BR in Brooklyn (Carroll Gardens), but I work remotely for a startup. I still live here because it's easily on the short list for best city in the world. If I had to take a hit in salary to work at a local startup, I'd probably look at Sunset Park or Bay Ridge. Living in the boonies (by Manhattan standards, they are perfectly nice neighborhoods) is a trade off you have to make to interact with such a great city on a budget.
In most cities, you can raise a family in a $1275/month apartment.
Brooklyn Heights is close to Manhattan and beautiful-- probably one of the nicest neighborhoods in New York-- but it's almost as expensive as living on the island. There are also affordable, beautiful places in the outer boroughs, but an hour's commute away.
Brooklyn Heights is a terrible example. It's where the executives who work across the water live. Of course that is going to be super expensive.
There are lots of places that you can find, that are comparable to SF & Boston, and sometimes cheaper. Let me know if you need help here!
The best values IMO are in the NJ suburbs, where you can catch a 40 min direct train into Penn Station, but pay half the rent of Manhattan, Hoboken, Astoria, etc. But that's obviously not quite as sexy and appealing.
I think a point everyone's missing is that even if you both live and work in Manhattan, you could have a 45 minute commute each way.
Overall, I would agree. NJ seems to have the most cheap places.
Great point about 45 commute just inside Manhattan.
EDIT: I live in fort greene and I pay 735 a month -- for validation purposes.
With roomates or 1BR/Studio?
Defining "reasonable rent" as 30% of after-tax income (which is about the point at which governments should limit rent levels, IMO) and noting that an entry-level job in New York pays about $3500/month after tax, reasonable rent would be $1050 for a starter apartment.
It's not impossible to find a decent apartment for under $1000/month in "the greater New York area", but it is impossible to do so with less than a 30-minute commute.
"Defining "reasonable rent" as 30% of after-tax income (which is about the point at which governments should limit rent levels, IMO)"
How on earth would that work?
Now the glut of idiots (and parentally-funded schmucks who currently live in $4000+/month apartments while working unpaid marketing/fashion internships, who would be forced out of the city) willing to destroy their finances in order to live in New York is gone; they're forced by law out of the auction. Our rents are high because we have to compete with these assholes. So let's take them out.
Landlords will either lower their rents to reasonable values or accept vacancies.
In Brooklyn you can find places to live along the N that are 3 or 4 stops to Union Square.
And yeah, Brooklyn Heights is nice, but other than the promenade and some large apartment buildings, there is nothing there that set it apart from Cobble Hill/Carroll Gardens/Park Slope/etc (although those places are expensive in their own right, but nothing like the city).