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Comment by i_like_waiting | Hacker News Reader

>In New York, for example, starting salaries for FBI agents hover around $73,000. But a nonprofit group in the city reported people need to earn at least $100,000 to afford food, housing and transportation there.

Does this hold truth? I know it's expensive city, but 73k is also median salary here, do they want to say that more than half people here cannot afford basic needs? That doesn't sound right

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In NYC, you typically need to earn 40x the monthly rent in annual income to not need a guarantor. 73k / 40 = $1825/month in rent.

The median 1 bedroom apartment in NYC is $3,263 according to Zillow https://www.zillow.com/rental-manager/market-trends/new-york...

you're saying people look at gross income to determine if someone can rent a place rather than net ?

This is common practice across the US and the rule-of-thumb 40x generally tries to take most cases into account. i.e., 40x after taxes and other typical debt levels is "risk appropriate" for landlords... Though don't get me started on how this reduces landlord risk to a level where they should not see profits...

It does seem odd though when you consider one person with 40x may have a completely different net than another.

Just off the top off my head I can think of

1. student loans 2. alimony 3. child support 4. back taxes to one or more governments

that can cut the net income of someone in half quite quickly

Yes

Yup!

It's just a heuristic to determine basic qualification: it's up to the renter to determine what they can afford once they're basically qualified.

The issue I see with comparing median salary to median rent for a one bedroom is that tons of people (especially young folks just starting out) want to live in desirable places and are willing to share living costs in order to do so. So even if you could magically reset a desirable locality to have comparable median rent and salary, very quickly rent would exceed salary as people that really can’t afford it move anyway.

And if you instead pin salary and say that the median salary at every company must be $X, rents will increase for the same reason.

I suppose you could ban living with roommates, and require median salary at every company to equal some state mandated number. I don’t think that will go well for anyone but you could.

It's also a problem because the median tells you nothing about who goes without. For that you need to know the distribution. Bottom 5% of housing cost vs bottom 5% household income is more informative.

The $150K number for a family of 4 sounds about right, but $100K for one person in NYC seems pretty far off. I have a lot of friends living in desirable neighborhoods making half that.

(The disconnect here is always around expectations: it will invariably be revealed that this includes a 1/2BR with no roommates within walking distance of the person’s workplace, when in reality much of this city has roommates and uses mass transit. Law enforcement are mere mortals like the rest of us; they can stoop to taking the subway to work.)

I don't think it's unfair to expect adults to be able to afford a 1 bedroom with no roommates

New American dream is a grown adult living with roommates like a child, and dying in a small box connected to a thousand other boxes that you’ll never even own.

I don’t disagree, but it’s not really about fair: it’s about what the expected standard of living is in NYC. NYC is historically a city of renters and roommates, and that is reflected in the split view between average “asking” rents ($3500) and actual rents ($~1700)[1].

This isn’t to say the city can’t or shouldn’t be more affordable. But the idea that everybody gets their own 1BR at average US rental prices is not immediately compatible with the city’s housing stock (or troubling trends, like dedensification).

[1]: https://comptroller.nyc.gov/reports/spotlight-new-york-citys...

In hindsight I really meant "unreasonable" more than "unfair"

For big cities I disagree, was it ever standard for single people to be able to afford 1 bedroom?

People were able to afford places, but being single for majority of adult life is semi-new trend. Especially in very dense cities.

I do. At least if you want to live in the popular areas, New Yorkers who make 73k can choose to live in a 1 bd in a cheaper area if they prefer.

You need to be "grand fathered" into proper housing to afford it.

My theory is that the churn of workers in the metropoles due to housing costs is why there are vacant jobs which made the workers move there in the first place. A self enforcing loop.

73k is definitely the median, but the disconnect with 100k is due to the shortcuts people probably take vs what the nonprofit reports.

For example, people may be getting roommates, living with family, Getting packages dinners, etc to make ends meet.

Also NYCHA (public housing) has hundreds of thousands of residents who definitely mostly make below 70k. That’s probably bringing the median down.

A quick google gives me median rent of $3500. After tax, 73k comes to about 54,599. Divided by 12 is 4,546 per month. So you have about $1,000 a month for utilities, food, gas/train, etc. It seems difficult to live on.

No one will rent to you if your rent would be 80% of your income anyway.

And on top of it that’s a paycheck to paycheck lifestyle. Forbid wanting to have a 401k or some savings, afford any amount of travel or continue education…

I knew people making 100K in California spending up to 60% of their income on housing.

Housing prices are destroying everything.

What about the free enterprise????

Housing isn't a free market; it's heavily regulated, subsidized, and politicized.

Houses are also not fungible. If people have a reason to live in a particular area (e.g., work, jurisdictional issues), and housing isn't regulated, you get places like Kowloon: https://upload.wikimedia.org/wikipedia/commons/archive/a/a7/...

The most extreme example the world has to offer is not representative of what would happen if the US legalized housing. HK has almost 200x the population density of the US and almost 100x the population density of California.

Slums can be found in nearly every country's history. Housing regulations are important: it's zoning restrictions that cause availability problems, not quality regs, and it's important to make the distinction. (When your community is exempt from zoning regulations, you can do things about the problem: https://macleans.ca/society/sen%CC%93a%E1%B8%B5w-vancouver)

But zoning restrictions on housing maintain the prices of existing real-estate "investments" (see https://www.mcsweeneys.net/articles/housing-should-be-afford...). We're not going to have change until real-estate owners abandon the idea that housing is supposed to be profitable.

(Btw, I still think "don't build on floodplains"-type restrictions are important, even though those are also zoning restrictions.)

> We're not going to have change until real-estate owners abandon the idea that housing is supposed to be profitable.

"Housing can't be simultaneously affordable and a good investment."

Exactly. Regulations have made it so expensive and difficult to build housing in many parts of California (and other major cities in the US), that the demand outstrips the supply and it leads to unaffordable housing.

I keep seeing memes about housing costs in the 1960s being so cheap. I also wonder what the housing regulations were at this time. I'm guessing pretty light compared to now.

There was a lot fewer people back then, in most places the ratio of people to available housing was much lower. The network effects were also far weaker, expensive air travel and worse communications meant that people didn't move to big cities as often.

Regulation is the culprit, though. Even if you banned Blackrock, foreign investors, and multiple investment properties, rents would be unchanged because the housing stock is simply deficient near people's workplaces, and it's regulations that prevent that from changing.

Housing is a cartel with very artificially restricted supply. It’s not a free market.

Places in the US that allow housing construction to meet demand have more reasonable housing costs.

I make 200k and spend >60% on housing in California. Pay ~75k in income taxes,leaving 125k,then another 20k in property taxes, then 60k mortgage. Leaves about 40k for bills and retirement.

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