Divide Your Rent Fairly | Hacker News Reader

Divide Your Rent Fairly

nytimes.com

239 pointswallflower113 comments

If you often split the bill on anything Rent/Utilities/Drinks/etc you should check out Splitwise [0]. They have a Web/iOS/Android apps and it has been a life saver. I've used it for a little over a year now and it makes all expenses a breeze. It keeps track of who owes who what and can (when enabled) even simplify the debts so if person A owes $10 to person B and person B owes $10 to person C then Splitwise will report that person A owes person C $10.

Note: I have no affiliation with Splitwise, I just love the product.

[0] https://www.splitwise.com/

> if person A owes $10 to person B and person B owes $10 to person C then Splitwise will report that person A owes person C $10.

What happens if I'm person C, B is a decent guy but A is a deadbeat? I lent money to B, not A, and can't be bothered to hunt down A for my cash?

Or is that what's implied in "when enabled"?

(Yes, I have (mostly past) friends like that and yes I've been in that exact scenario, unassisted by any apps.)

Ideally, A's credit is discounted and B can only relieve $7 of their debt to you with the $10 A-note (or whatever you value A's debt at). They can choose to take it, or try to collect their $10. Eventually, as people's value of A's debt goes down, splitting a bill with A makes them take a larger portion of it because of their "default" risk.

In person, A thinks that's bullshit and immediately refuses to pay anything, out of principle. People stop splitting with A unless he has the cash on hand and eventually have to kick him out of the house.

Not saying the app works that way. In fact, that's probably why the app doesn't work that way.

Unfortunately it doesn't work that way. I will say that it would be nice if you could choose to charge interest on debts not repaid after X amount of time. I don't enjoy acting like a 0% interest bank but it's better than not getting paid at all. Before I would just forget or give up trying to "collect" but now there is a ledger and I know I will eventually get paid. The cool thing about Splitwise is it makes it really easy to buy things for the group as a way to pay off debt. For example: One of my roommates was behind on their debts and so every time they had a little money they would buy some/all of the groceries on the list and then put the bill in Splitwise. In this way 2/3rds of the cost of the bill was applied to their debt and they slowly paid it off. In my experience this is a much better way to collect as they see benefit from from it as well (food) and it feels less like just having to hand over money to the lender.

EDIT: As it turns out they have an API [0] so I guess I could write something that would auto-add "bills" for interest if I wanted to but my current setup works fine ATM and I feel like some of my friends would not be happy with being charged interest :).

[0] http://dev.splitwise.com/

Jon from Splitwise here. Yep - we don't include interest rates or try to price debt transfers, because we want to keep things casual. The "debt simplification" is an awesome feature but is not on by default because some people have differing levels of trust with different friends.

We do send monthly reminders to make sure people are good about either paying back or picking up the check next time. People often just use it to keep track of who should pay next and that is the way I primarily use Splitwise personally. With good friends, Splitwise is just a way to let our balance roll and figure out who should pay today.

With more distant or very diligent friends who don't like being in debt, they settle up right away and like the monthly reminder emails. To each his or her own!

We have our API just for things like this. I actually have personally borrowed money with interest (a large amount to pay off a credit card) from a friend, and tracked the debt, payments, and interest on Splitwise. We did repayments via PayPal and I added interest each month using my own calculations. We were both very happy and it's been paid off for a while now.

If someone wrote a general Splitwise interest-on-your-balance app (I would make it be opt-in for friends who agreed, with 0% still as the default for balances) on our API, that'd be awesome.

Thanks Jon! When I get some free time I might play with the API a little bit. I'm sure flat interest % for balance at the end of the month (or any other point in time) would be fairly simple but I would want to take it a step further. I would like it have a "grace period" of X months (or X time intervals) from money lend date before interest kicks in and even then you would only be charged interest on money that hadn't been paid in X time intervals not all you owe. Of course this would be much more difficult than a simple:

    $interestBillAmount = $amountOwed*$interestRate

That ran each month. Anyways keep up the great work, I use Splitwise all the time and it's a huge time and stress saver!

You don't have to enable "Simplify Debts" also debts are only simplified within a group of friends that you control. I have a group for my roommates (which makes it easy to just apply rent/utils to a group) who I trust to pay me back. I wouldn't join a group with a deadbeat or invite one to join one I am a part of.

Splitwise even has a really well thought out rent calculator: https://www.splitwise.com/calculators/rent

This even allows you to do the "Two people sharing a single room in a two-bedroom" calculation, unlike the NYTimes calculator.

Yes, and they have quite a few calculators [0] for other stuff as well:

* Should you get renters insurance? [1]

* The Splitwise Furniture Calculator [2]

* The Splitwise Guest Calculator [3]

* The Loud Sex (and other night-time noises) Calculator [4]

* The Splitwise Travel Calculator [5]

[0] https://www.splitwise.com/calculators

[1] https://www.splitwise.com/calculators/renters

[2] https://www.splitwise.com/calculators/furniture

[3] https://www.splitwise.com/calculators/guest

[4] https://www.splitwise.com/calculators/noise

[5] https://www.splitwise.com/calculators/travel

All those forms output through an "in-page pop up" ("pop over"?) window that dims the rest of the page. It doesn't correctly display on any of my Android browsers. Mobile vs desktop page request doesn't matter. Can only see part of the results, and can't scroll over to the close button so I have to leave the tab all together.

I see this kind of brokenness all the time. Is there a well known way to fix it on my end? Is this just bad web design?

Yea but the prices there are arbitrary. With the NYT calculator if you make "rational" choices you are guaranteed at least a fair split (better if your mate is irrational)

Jon from Splitwise here, thanks @mjmahone17 for mentioning our answer to this problem.

I think if you have complex or specific preferences about rent splitting (ie I don't want to live next to the kitchen) and live with a bunch of fellow nerds, an implicit fair division system may work well. The NYT calc is a great new implementation the Francis Su paper - the old Java one was broken.

If you have non-nerd roommates, couples living together, or are already assigned to rooms by fate or immutable preference, that's what the Splitwise calculator is for. The price are based on square-footage, survey data, and common sense. Not everyone is willing to change from the room they like, or sit for an auction.

Rationale: http://blog.splitwise.com/rent-calculator-faq/ Survey: http://blog.splitwise.com/2011/02/20/survey-results-split-th... Follow up: http://blog.splitwise.com/2011/03/01/does-it-really-work-fee... My Quora answer: https://www.quora.com/Whats-the-fairest-way-to-assign-rooms-...

Happy to answer questions at jon at splitwise dot com

Good point, for cases where you can't actually make a choice a curated price calculator is the best one can really hope for. In any case splitwise is a nice product btw :)

They're arbitrary, but in my experience, are generally fair, and leave fewer feelings of resentment than with a bidding system.

Which is kind of insane, right? The whole point of the bidding system is that it ends in an optimal position, where nobody would pay more for a room than someone else is already paying. Whereas with an arbitrary system, you might well end up in that situation.

I suppose the insight is that (some or many) people are more ready to accept an unfair situation dictated by a dispassionate external authority (even if that authority is just some JavaScript!) than a fair situation reached by negotiation.

Part of what might make this reasonable is that this process takes who is moving in together as a given. Say you and I want to be roommates, and you happen to know that I have a pathological fear of sleeping in big bedrooms. Clearly the efficient thing to happen if you're a normal person is for you to get the large room and me to get the small room. But how much do we pay?

It seems rather unfair of you to incorporate that information into the bidding system and bid up the price of the small room (a sort of strategic bidding). But it also seems unfair that if we both answer honestly the system has a good chance of making the smaller room priced the same (or more than) the big room.

With any other roommate, especially one who didn't know about my pathological fear, I could expect to pay less for the smaller room. These "external authorities" might reflect such widespread notions, as well as avoid the risk of strategic bidding that can occur after roommate selection is fixed.

I remember a trade unionist saying: "a good deal is one that everyone's unhappy with".

Splitwise has been an argument saver for dividing up rent. When you have huge discrepancies in bedroom size and people on different budgets, the arguments get really awkward unless you're using some type of "unbiased" tool.

two people sharing a single room can be done in NYT's one also by simply talking in terms of beds (top bunk, room1; lower bunk, room1; room2)

I don't think this has anything to do with the article/calculator. The OP is about an auction process to determine who pays what, not actually exchanging the money or tracking it.

It has to do with splitting the cost of shared resources, I will agree that it's not the same as the OP but I will argue that it is in the same vein and further more that people that are interested in how best to split rent might also be interested in a way to facilitate the collection and tracking of said rent.

Edit: Also see Splitwise's rent calculator: https://www.splitwise.com/calculators/rent

Agreed, I think it's totally relevant and thanks for the Splitwise link.

I've been waiting for Venmo to integrate roommate-inspired features for ages.

Splitwise used to have a link to Venmo but I can't find it now, they do have Paypal integration that you can use (you have to pay Paypal fees though). That said you can of course use whatever you want to exchange money and my roommates use Venmo and Simple Instant (and goods/services like groceries/utilities in their name) to pay each other.

This worked for me in the past. Once we settled on rooms, we bid for the largest ones. Very efficient. Still split utilities multiple ways. The only problem is in one situation when one of the guys moved his girlfriend in without asking.

But the OP is quite a claim. I find the difficulty with "fair" is that it means different things to different people.

This looks awesome. I like the UI at first glance. I have been using https://www.buxfer.com/ for the past 5+ years for tracking expenses with roommates. It works really well, but the UI leaves much to be desired.

Ok, it's kind of like a (feature-wise) Mint + Splitwise?

I think I might check it out. I will probably keep using Splitwise but if it can do everything mint can do and track iou's I might try to use it as a mint replacement then write something that can mirror my Splitwise history to Buxfer and keep using Splitwise.

I have only ever used it for the feature set similar to Splitwise, so I can't comment on the Mint like features. Sounds like a good plan though. I hope it works out for you!

I've been using and loving Splittr[1] frequently on iOS.

[1] https://itunes.apple.com/us/app/splittr-cost-sharing-made/id...

I'll have to check that one out. Thanks for the link!

Edit: It appears to be for iOS only according to the website [0]. This wouldn't be an issue for my current roommates but I do have some friends on android that I use splitwise with that wouldn't be able to use this. If they ever add Android support I will be sure to check it out.

[0] http://www.splittrapp.com/

Just bought this per your recommendation and I'm excited. My girlfriend and I have just been keeping a bunch of the receipts for shared expenses in an envelope -- this is way better.

I have to say, I really don't like that 'simplification' of debts. If I extend credit to B, I don't want repayment to be contingent on the creditworthiness of A instead.

I second that. I have been using Splitwise for few years and absolutely love the product.

This app did not make much sense to me because I was sitting at my computer making choices for myself and my non-present roommate. So the related article with useful visual explanation of Sperner's Lemma may be more useful reading if you don't have a quorum of your roommates to work with this morning:

http://www.nytimes.com/2014/04/29/science/to-divide-the-rent...

Sperner's Lemma is cool, but since it can be gamed and your preferences will change anyway (so the envy-freeness is only temporary) it's more of a curiosity than a true solution.

Myself and my g/f moved into a house with 2 friends. We figured a fair way to divide the rent and expenses.

We measured out the sqft of the bedrooms, and used the percentages of each room from the total bedroom sqft to split the rent and any fixed expenses like internet and lawn care (since those costs don't change based on per person usage). We applied the same to cleaning supplies and things like light bulbs in common spaces.

(Chosen Bedroom SQFT / Total Bedroom SQFT = Chosen Bedroom Expense %)

For power, since that can vary month to month based on usage, we split it by the number of people in the house.

This month, one of the friends is moving out and we're taking her room over as an office, so the power split changes to 3 way instead of 4 way, but the other friend won't see a change in her other expenses because her percentage of the bedrooms floor space is still the same.

Easy on math and easy to manage.

All expenses are tracked in a Google Doc shared to all of us, and at the end of each month I run the numbers to calculate who pays what to who to balance it out.

That approach is directly suggested in the accompanying article. The suggested problem is that square footage may not be sufficient to express the actual value preference difference between rooms. For instance, as the article suggests, what is the value of having a window?

That's, thus, exactly the neat part of this algorithm. So long as the participants are honest then it converges on an "envy-free" set of room selections and prices. In other words, by using only your own preference for room-X-at-price-Y it builds a set of compatible room-X-at-price-Y choices provided to each participant such that they've shown they would not want to trade with anyone else for their room-X-at-price-Y option.

The beauty of this is that the entire interface is done through these room-X-at-price-Y preferences and options so it abstracts over technical details like the relative value of a window. It's simply up to the participants to decide what they value.

The huge problem with dividing rent this way is that it's effectively saying that a house is only as good as its bedroom. It puts the price of the kitchen, bathrooms, common spaces, yard, etc. at exactly $0. Meanwhile, those rooms are what most people use most of the day!

E.g., if one bedroom is a tiny 70 sqft and the other a whopping 210 sqft, your algorithm would have the smaller pay only 25% of the rent! Is their home life really 66% worse/cheaper just because their bedroom is small? They have equal access to the TV, couch, oven, fridge, laundry, etc. etc. etc.

The way we did it was to evenly split the common spaces among the renters, while accounting for room size.

individual_rent = total_rent * (room_size + common_share)/house_size)

Utilities are split evenly among roommates.

It works, although I probably would have prefered to use something like the system here were I to do it over. Things like "has a master bathroom so you don't have to share with everyone else" tend to be worth more per square foot than regular bedroom space.

That's a good start but it doesn't account for bedrooms that are better. For example, one bedroom may have a huge bay window with a nice view and the other has a tiny alley alley facing window. How do you count that into the cost?

Generally you don't. First come, first serve. If you're not willing to pay the area-proportional price of the room, someone else will be.

The only situation where this would be relevant is if you're a group of friends all looking for a new apartment together. After university, that's pretty unusual.

You're saying that if a unit has two 500 square foot bedrooms, and one is in the basement with no windows next to the furnace and the other is upstairs with bay windows on two walls facing a garden, there is always someone willing to pay half of the overall rent for the basement unit? How exactly are you arriving at this extremely counter intuitive conclusion?

Supply & Demand; especially if you are in NY.

As a son of a landlord who rents rooms, I can tell you that people are not willing to rent a room with no windows for the same price as one with a window, even if they have the same area.

If we adopted a single price, it would either force us to lower the price of the other rooms significantly or keep the interior rooms unoccupied.

"If we adopted a single price, it would either force us to lower the price of the other rooms significantly"

If you did that though wouldn't people still feel that it was unfair? (The frame of reference would just be lowered).

I'm also curious if there is a difference between stating something as a discount (to offset inferiority) vs. the same thing where the better room is state as a premium.

My gut says better to price as "premium" for something better than to offer a discount. (This seems to be the way hotels usually do pricing as only one example).

If you did that though wouldn't people still feel that it was unfair?

I wasn't really referring to people's sense of fairness - people just decide that a window is valuable enough that they're willing to pay a premium for it (it's around 20%, in our case).

I can see it generating some resentment, but we've never tried it, so I can't say for sure.

I'm also curious if there is a difference between stating something as a discount vs. the same thing where the better room is state as a premium.

Well, we don't label it as neither of those, but I think that calling a window a "premium" might be difficult, especially when almost all the products in the market (rented rooms) have one or more. The interior rooms are really an exception.

"If you did that though wouldn't people still feel that it was unfair? (The frame of reference would just be lowered)."

I think it's reasonable to assume that the frame of reference also includes other properties, at least to some extent.

If everyone feels it's fair then by definition it's "right", however such an approach wouldn't feel fair to me because I have different preferences and usage habits that aren't getting factored in here. The tool linked in the OP is very simple to use, and importantly it will capture all revealed preferences (provided who the roommates are is accepted as a given).

What about common areas? It doesn't make sense to me that someone with a 2x larger bedroom would pay 2x the rent, since the person with the smaller bedroom still has all the same access to the kitchen, living room, and whatever else.

If we're going by square footage, it would make more sense to me to calculate each person's rent as:

(Bedroom area + common area / total number of people) / (total bedroom area + common area)

In short, everyone pays for an equal slice of the common area in addition to their own room.

Were you ever a student living in a stranger's house?

While 'you have access to everything', it sometimes doesn't work like that in practice.

A stranger living with a family has to put up with unwashed dishes/unavailability of kitchen, kids screaming, the man of the house watching/owning the living room after working hours (4pm/5pm to 10pm), the family having supper and cooking, etc.

All of a sudden, the student is basically restricted to living in a 70 sqft room. And usually, these small rooms aren't 'proper rooms' (e.g., no ventilation, no insulation, many times no window or small window).

The reason I say this is because this is exactly my situation. With the exception that I have a 9-to-5, as well. I pay $400 to share a room with someone. A room that is divided by a piece of wood. I have no window and it was built as a pretty poor annex with no A/C or heating reaching my room. I have no window either, as the other side does where my roommate is.

We're talking about roommates sharing an apartment as equals, not a person renting a single room from the owners of a house.

Fair point

Found this fairly annoying - only because I went through this exercise recently, and now all the research i did has been made redundant.

I bought this book to help me out:

http://www.amazon.com/Fair-Division-Cake-Cutting-Dispute-Res...

It's a great book, though it didn't include exactly what i was looking for regarding this subject. I emailed one of the authors and he kindly pointed me in the direction of Sperner's Lemma:

http://www.inet.tu-berlin.de/fileadmin/fg234_tdc1-s11/FDS_SS...

and I was able to find:

http://www.math.hmc.edu/~su/fairdivision/calc/

Which is the same sort of calculator...

Anyway same end result...though i highly recommend the book above if anyone is interested in the subject.

In particular, the NYT's new calculator is a reimplementation of the calculator you found by Francis Su and his student(s) (which it cites).

My favorite introduction to the subject of fair division was Ian Stewart's "Your Half's Bigger Than My Half!", Scientific American, December 1998:

http://www.whydomath.org/Reading_Room_Material/ian_stewart/y...

It's an interesting, accessible, practical application of mathematics and logic. Fun for the whole family!

Sperner's Lemma is probably my favorite mathematical result. It is easy to explain, and pretty easy to prove, but it has a higher than average number of "aha" moments along the way. The mathematics is not too intimidating - probably the scariest thing is the generalization to n dimensions, which requires induction. It is also fun to explain the connections to Nash's theorem and so on, as invoked in this article.

Reminds me of an old puzzle: how to split bread in two parts so no one is upset? Alice splits, Bob chooses the one he wants. If both prefer at least half, Alice will try hard to split as close to 50/50 as possible and, most importantly, no one will feel bad because everyone had his say.

Yes, these are a generalization of "I split, you choose" to more general cases. It is a way of getting an envy-free distribution. It is often called the cake cutting problem. There are some interesting books on the topic...

http://www.amazon.com/Cake-Cutting-Algorithms-Fair-You-Can/d...

I want to be the one who chooses. It is humanly impossible to split the bread to two exact parts. Choosing which part is bigger is easy in most cases.

Toss a fair coin to see who cuts and who chooses.

Also "Shotgun clauses" in shareholder agreements - which try and create a last resort mechanism for fairly agreeing on a share price:

http://en.wikipedia.org/wiki/Shotgun_clause

I always propose this method, but also suggest that the other person does the dividing :)

Interesting that almost all the comments thus far are regarding the actual content of the article and intention of the page rather than the relative novelty page itself. I think that alone is evidence that the Times has hit its stride as a 21st century news outlet.

There is a register wall. if you search google for "divide your rent fairly", and click on it from the search results, it'll let you in.

https://www.google.com/search?q=divide+your+rent+fairly&oq=d...

Alternatively, visit the linked article directly in an incognito window.

Can someone explain why the outcomes differ when the roommates are in a different order? Imagine an apartment with one nice room and one terrible room, total rent $1000, and two roommates, one rich, one poor. The poor roommate will always chose the less expensive room, the rich roommate will always chose the nice room unless the price difference is greater than $500.

If the rich roommate is Roommate A, then it converges to a 50/50 split, each paying $500. If the rich roommate is Roommate B, it converges to a 75/25 split, with the rich roommate paying $750. What's going on there?

[EDIT: Also, I've just discovered with three roommates that the results may be displayed without the first roommate ever choosing at all. ???]

I think the key may be that the rich roommate actually prefers a room, while the poor roommate does not (according to their assigned valuations) have any room preference at all. So if the poor roommate is second, they make the most choices in this calculator and their lack of preference makes the split even, whereas if the rich roommate is second, they make the most choices and their stronger preference causes them to pay more.

Even so, the order still seems to matter somewhat, and I would have expected it not to matter at all.

It doesn't guarantee a perfect allocation, but one that is compatible with everyone's preferences. A is willing to pay up to $750 for the nice room and up to $250 for the bad room. B is willing to pay up to $500 for either room. Any solution where A takes the expensive room for $500-$750 and B takes the cheap room for $250-$500 will leave both content with their choice. B could do better by being strategic and switching his preference to only taking the cheap room for no more than $300, however.

Thanks, I think that's what I was misunderstanding.

Does this still work if one person has an upper limit on how much they can spend that is less than an equal split?

The algorithm is likely to ask anyone to choose a favoured room from an equal split, so in theory the algorithm won't work if someone has a smaller-than-equality budget.

The algorithm depends on everyone having a personal way of splitting the cost of the house so that they would be equally happy with any room. If you are only willing to spend less-than-equality on a particular room, you should be prepared to spend more-than-equality on another room to compensate.

Someone without that possibility might get a result incompatible with their needs or might be taken advantage of by a knowledgeable enemy player, I would think.

So in theory, no, this method won't work perfectly. But in practice, yes, you might still get a decent result.

This algorithm is good for cake-cutting, since everyone likes to receive cake, but less good for rent-splitting, since not everyone likes to pay rent.

It might.

The associated paper makes the assumption that for every division of rent, some room is acceptable. However, the lemma itself makes no such demand, but only guarantees the existence of an approximate rent division. The algorithm given refines the rent division iteratively, so an upper spend limit only means you might end up with rooms assigned and a portion of the rent unpaid. You could then fix the underfunded tenant's room and iterate on the others, but there's no longer a guarantee that the others wouldn't envy the bum's rent.

yes... unless the conclusion from the process is that the apartment is too expensive for the roommates to split; or your preferences are not compatible with each other.

Deleted comment

I think the two people just act as a tiny corporation in the bidding process, and enter a single set of bids, just like the single people. Equally, if one person wanted two rooms, they would enter two sets of bids. I further think that this could easily end up putting everyone in the same rooms, at the same prices.

In terms of paying for the bedrooms, this seems fair. Yes, the couple are each paying half as much for the room as when it had a single occupant. But they're also only getting half the use of the room, because they're sharing it.

In terms of paying for the shared spaces, this does seem less fair, because everyone else now has a slightly smaller share of the use of those, whereas the couple jointly has two of those slightly smaller shares. I think the way that this ultimately shakes out is that the other housemates might decide that none of the room choices offer value for money, and move out of the house.

You know what, forget this marriage stuff, people who REALLY love each other should just incorporate together. People blabber on about two hearts beating as one, but by incorporating, they'd be LEGALLY a single person!

Plus, the veil on a wedding dress is just a piece of gauze, but the one on a corporation is protected by a thick layer of case law.

And just think of all the beautiful honeymoon locations in Delaware!

People value different rooms differently. Auctions are usually good solutions to this. Idea:

1) Each roommate secretly prices how much they would pay for each room. 2) The highest payment proposed is allocated the selected room. The payments are gone down in decreasing value until everyone is assigned a room. 3) Rent is divided among the renters in amount proportional to the bids accepted.

This is probably going to be helpful for people who can't afford to pay 1-2 months of rent due to not having a job, so they can calculate what they'll owe down the road.

I've seen situations where one person is "temporarily" handling the lion's share of the rent, and as that temporary situation becomes indefinite, resentment starts boiling.

Sperner's lemma feels very much like eBay's proxy bidding - you put the maximum you're willing to pay in, and eBay will bid up to that value and not over.

And then with ten minutes left, you go back to the auction and start desperately typing in higher and higher numbers because you have to have teh shiny, rationality be damned.

Of all the things to appear on HN! In a kind of joke response to a recent house search with a couple of friends, I made a site that splits the rent based on room size. Rough round the edges, but feel free to try it out. http://whogetsthesmallroom.com/

Fair is an interesting concept.

How do you set the rent?

If it's an apartment, it's the fixed cost set by the landlord, but what if you are the landlord?

Do you set the rent to be based on the mortgage, or based on rents for similar properties?

With that same logic, if you had a place that was below market, could you set rent to market and charge that?

This seems buggy to me, but I'm not familiar with the algorithm. In my test case, neither roommate agreed to pay more than $562.50 for room 1, but the result was that roommate A had to pay $578.13 so it seems kind of arbitrary.

Edit: Never mind, I didn't notice that it allowed me to continue.

Also note that it provides error bars around the result -- in your case 578.13 minus those error bars was probably less than 562.50.

Quite fair: http://www.nytimes.com/interactive/2014/science/rent-divisio...

$98.44 and $1.56

Your example would indicate that both roommates had a strong preference for room A over room B, so in that sense it is fair for the person getting room A to pay more.

Why not just divide the total rent by the total square footage to get a rate for the space and then have each person pay for their private space plus a their share of the common space?

This is quite a claim. I find the difficulty with "fair" is that it means different things to different people.

Now can we figure out a way to split expenses like cable (some may not want it), lawn services (how frequent), etc?

Deleted comment

That's not really similar at all.

I've lived with tons of roommates the last 5 years and do not see the utility in this... There are jut too many factors to take into consideration. We are currently in a 4-bedroom house with other amenities. Two of the bedrooms are very small, and two are large. First, each room starts at a base amount to take into consideration the shared spaces... Which is $50 for us. So... $700/mo. total - $200/mo. for all 4 rooms = $500/mo. leftover. Then we split the rooms into amounts that we agreed seem fair based on the sizes. As a median, $500/4 = $125. The large rooms are $165, small rooms are $85. Add in the $50 from before and we have:

Large Room: $215 Large Room: $215 Small Room: $135 Small Room: $135

Basically, you're paying a base price for the shared space, then an additional price for the approximate square footage of your room. We avoid going into exact measurements to keep it simple.

As far as utilities go, it was a nightmare to organize them every month and collect what everybody owed, especially when people started owing over a couple months past. Making sure to record payments, update the balances, ask for payments, pay all the bills, and sometimes organize which bills get paid first because we owed was a disaster.

So, for utilities, I calculated the yearly average of all of them divided by the minimum number of roommates (4 in our case), added ~10-15% on the top, and that was our new monthly utility bill. Everybody pays the same amount every month. Rent is due on the 1st. Utilities are due on the 15th. I track payments using Google Docs so they have access.

Also annoying was the process in which people bought supplies for the house and wanting reimbursements... Sometimes people would buy the same things and we'd have a stock of them, etc... So that extra cushion in the utilities goes toward purchasing house supplies in bulk.

All of the money goes into a PayPal student account with a debit card. Everybody has access to Mint.com to see transactions/balance, but only I have access to the actual account. Anybody can use the debit card, and I get text/email alerts for every transaction. If we end up having a large balance, we can improve something in the shared spaces or repay debts from roommates that had to be kicked out for owing (face it... that money is gone - Always collect a security deposit!).

We believe this system is fair and scaleable, as it rewards people for sharing rooms rather than making them pay more for the same space... But as the number of people grows, the cushion in the utilities grows to a larger percentage... Making it possible to improve our shared space living conditions as a reward for putting up with too many roommates. For instance, supplying everything we need for a full garden in the back yard, etc.

I apologize for this long-winded explanation, but I hope this helps somebody. Compared to the way of normally splitting up a house, this is much simpler. Everybody knows what they pay in rent for their room, they know how much they'd pay if they moved their partner in, they know how much utilities are, and everything is transparent.

The main thing I haven't figured out is chores/shared duties outside of just cleaning up after yourself. We have a whole 100+ year-old house to maintain/rehab, and there is a lot to do. Working on some kind of system where people can choose from a revolving list what chores they want to do to accumulate their points. First come, first choice. HabitRPG looks promising in that you can get groups together and tasks go up in value the longer they aren't done.

Also, having repercussions for late-payments/lack of chores. We're not big on charging interest/fines to those that cannot afford it already... But will soon be experimenting with taking away access to house amenities... For instance, the upstairs (nicer) bathroom, the high-speed Internet, our shared access to the local Hackerspace, etc.

Then we split the rooms into amounts that we agreed seem fair based on the sizes.

And how did you do that? This article offers an algorithm to do that optimally. Did you use such an algorithm? If not, then your "seem fair" means "are wrong".

If everyone agrees that it's fair, then it's fair, no?

You can reach a consensus without an algorithm/calculator.

You can reach a consensus without an algorithm, but will you? If different people value the rooms differently, you might not be able to assign valuations that everyone agrees are fair. With this algorithm, you are guaranteed to assign prices and rooms such that no one would prefer to take another person's room and price instead of their current room and price.

Your methodology is fair from the objective vantage point of the rooms, but not necessarily from the subjective vantage point of the people.

Consider the following strawman scenario: Roommate A is earning a million dollars a year, and the other three are student artists, surviving on odd jobs. Would it be "fair" for roommate A to to pay no more than $215 - $135 = $80/month more than the others, when their ability to pay is so much greater?

That's obviously a contrived example, but not too different from my own situation. I'm a consultant / business owner whose income is not extravagant, but is reasonably above the UK mean. I have a flatmate -- who is fact a student artist -- who contributes roughly 20% of the total costs to the household, including utility & council taxes and whatnot. An 80/20 split may sound terribly inequitable, but we're both paying a similar percentage of our earnings for rent, so it's quite equitable from that perspective.

Absent this arrangement, I could still afford to live on my own, but I'd be left with less cash at the end of the month, and my place would seem a bit empty. My flatmate, in turn, could probably only afford to live in some tiny squalid place far from the city centre. If we were to insist on a 50/50 split which is "fair" from the perspective of the space & utilities (rather than from the perspective our respective pocketbooks), then no accommodation could be found: my flatmate could never afford to pay half the rent. But by optimising around a subjectively fair allocation of our personal resources and preferences, I get an excellent flatmate and more spending money, and they get a much nicer place in London than they could otherwise afford. This is a far better outcome for both of us than we could achieve by insisting on an "objectively fair" split.

As for your chores dilemma: just have a basic rule about not leaving one's personal crap in the common areas. Then for the routine tasks (vacuuming, mopping, etc.), collect an extra $5/week from everybody, and use that money to hire a professional cleaner (or if one of the flatmates is short of cash and particularly good at / enthusiastic about cleaning, pay them to do it). Seriously, it's worth it. People have vastly different capabilities and preferences when it comes to cleaning, and trying to make everybody equal in this respect is an un-winnable game. Don't even try.

tl;dr: the less you strive for egalitarianism through uniformity, and the more you accommodate the divergent abilities and subjective viewpoints of your flatmates, the better you'll be able to find win/win scenarios in shared-living situations.

I'm not following... We are paying roughly market rates divided by the space we actually use. While it could be looked at as only being fair if each pays a percentage of their income, this (as you mentioned) reduces the benefit living with people to get cheaper rent.

I actually do make a decent bit more than my roommates, but I choose to live an extremely simple life for other benefits. If my rent was higher than it is now (to match my income), living there would not be worth it and I would get my own apartment without roommates, etc. It would also create trouble between us as I don't always find the benefit in just having them around for how great they are.

I can very well see how your situation works for you, but I do not agree that my setup is at all unfair.

As far as cleaning goes, none of my roommates have the income to constantly pay professionals... So that is why they can take a pick off the list as opposed to being assigned tasks.

I don't think your method is necessarily unfair. I just don't think it necessarily is fair, either. If all of your roommates have roughly equal views on the value of money, square footage, and various intangibles (such as, say, the quality of light in a room), then your method is probably entirely fair -- no arguments there. If, on the other hand, they each assign very different values to space or money or those various intangibles, then it's possible that -- despite paying similar amounts of money for similar amounts of space -- they are actually experiencing very unequal levels of economic utility in exchange for their rent. Which would be where something like the NYT algorithm begins to make sense, since this attempts to maximise the utility function for all parties, regardless of how they themselves define utility.

As for the cleaner: yours is a very common reaction that I get whenever I give this advice to my friends. But professional cleaners are surprisingly affordable. In multi-person households -- unless you're living close to the poverty line -- they should be entirely affordable (much less than the proverbial cup of coffee per day), and go SUCH a long ways towards reducing household drama! Have you tried actually crunching the per-person numbers? You might be surprised at the results.

Yes, it is fair.

Is it fair that just because someone has the ability to pay, they ought to pay? If a millionaire was planning to move in, and you said "for you, you pay 100% of rent," then the millionaire would probably just go somewhere else. Afterall, they're probably looking for cheap, since they could surely afford a place to themselves or perhaps even a house (depending on location). Likewise, the students may be "poor," in monetary expense, but one could argue that they are simply spending their money on other things that are important to them, and so why should they get a free ride because of that?

In the situations I've been with, I'm fine with (rent/number of renters). the lease holder gets her choice of room, the rest is first come/first serve.

I think you're missing the point. This is a value-optimisation problem, and 1.) not all value is monetary, and 2.) the perception of value is inherently subjective. That's why optimisations cannot be created via static externally objective criteria, and must be the process of a negotiation, as the NY Times calculator proposes.

If the millionaire readily agreed to pay 100% of the rent, then that would be "fair" because clearly in order to make that agreement, they'd have to be receiving some kind of non-monetary benefit from the arrangement. On the other hand, if they walked away from that proposition, then obviously no optimisation has been achieved, which is why a static "the millionaire pays for everything" policy is not a good idea. Instead, the millionaire should return with a counter-offer, and this should continue until parity is achieved. When all the subjective qualitative factors are included, there's no guarantee that it will be at 50/50 (which may not even be a possible solution, as in my example with my flatmate). That's the beauty of the Times' calculator: it allows people to apply whatever personal subjective criteria they like when making their own valuations, and then finds the dynamic equilibrium between these.

You're correct, I did miss the point. I viewed the original link on my phone and wasn't seeing where it dived into the value of amenities. :(

I may give it a shot someday.

Your situation assumes that you could not find a great roommate who would split the cost 50/50, or at least split the cost based solely on the objectives (room-size).

That said, your arrange works really well for you, and the utility value of the "fully optimial rent" amount clearly isn't important to you, so there isn't much incentive for you to address it.

As a minor aside, tl;dr should be posted at the top :)

Boo. That registration gate can go right away.

click on the search result link, it'll kill the register wall.

https://www.google.com/search?q=divide+your+rent+fairly&oq=d...

by far the easiest way around the nyt paywall is to just open the link in an incognito window.

"Fair" in the good old American capitalist sense of the word. Money is supposed to be a proxy for desire here... The one that desires the room more gets it because they are willing to pay more for it. The reality is money isn't an equal proxy for desire. The poorer roomate can want the big room with every fibre of their being, but be casually outbid by a rich roommate with money to burn.

Edit: as expected, HN swings decidedly capitalistic and my comment has been downvoted.

Money isn't being used as a proxy for desire here; it's being used as a proxy for sacrifice. The person who is willing to sacrifice more for the room gets it, not the person who wants it more. Fair is being used in the sense that everybody ends up happy with the amount they sacrifice for the room that they end up getting, because at no point are you suggesting an amount that you're unwilling to pay.

So your comment is getting downvoted because it's wrong, not because HN is ruthlessly capitalistic.

When there is an economic disparity between the two tenants, the amount of sacrifice represented by $100 is unequal

Even when there isn't economic disparity between the two tenants, the amount of sacrifice represented by $100 may well be unequal.

Fortunately, this system involves everybody listing exactly how much they'd be willing to pay for each room so that nobody ends up sacrificing an amount that they're unhappy with for the room they end up living in. So even if they're sacrificing unequal amounts, they're getting a result they're happy with.

Sounds fair to me.

Fair in the sense that nobody is forced to pay more than they want to / can. Unfair in the sense that one person has more power than the other, almost definitely because of their family history, not because of anything they have done specifically to deserve that extra freedom and power.

My point is basically that our society allows an unjustly large economic disparity, and to call this a "fair" method of divvying up rent ignores that nothing involving money can be truly fair in our society.

So if you get the room you really want, why should another person get stuck paying more for a worse room? You might say that the landlord should just give the apartment to the people who want it the most, and only charge what they can afford to pay him. But the landlord isn't looking to maximize desire, he's looking for the most money.

So really, the reason the solution is to give more desirable things to people with more money, is that the owner of the desirable thing is looking to maximize money, not just match desire of the apartment with desire of your money. So he's trying to take the most money the rich person is willing to give and the most money the poorer person is willing to give.

In practice it's usually the tenants picking the rent split, not the landlord. Two friends move in, they agree that they'll split the rent roughly equally, but maybe the bigger room is worth an extra $50 or something. Often they'll just split the rent equally despite an obvious difference in objective quality between the rooms. This is because when it comes to family and friends, we often behave in anti-capitalist ways. This is why the idea of capitalism seems "cold" and "uncaring", because when it comes to those close to us we don't act strictly capitalistically.

Sure they decide among themselves what the split is. But I mean, if the richer person is willing to pay $750 for the better room and the poorer person is willing to pay up to $500 for either room, the best move for the landlord is to raise the rent overall!

I have never heard of this system. Rent has always been (total rent / number of roommates). This seems a bit overly complex.

Reply on news.ycombinator.com