Comment by bendauphinee | Hacker News Reader

Comment by bendauphinee | Hacker News Reader

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? (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 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 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

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