Raking It In and Still Priced Out
Ask a successful New Yorkers about her first apartment in Manhattan, and you'll usually hear comedic horror stories of 5th floor walk-ups, the lingering smells from the downstairs Thai restaurant, and a lack of storage space. Generations of city dwellers have been willing to sacrifice the size of their apartments to move into a trendy neighborhood. But the newest wave of young professionals are going up against impossible rent increases, untrusting real estate brokers, and unrealistic income requirements, making the idea of living in Manhattan as unattainable to some young professionals as winning the lottery. Manhattan has experienced years of gentrification and neighborhood makeovers, increasing the cost of living, and making property values reach record highs. According to the latest Apartment Research Market Report conducted by Marcus & Millichap, landlords are projected to increase effective rents 2.6 percent to $4,064 per month by the end of 2014. There are some industries that make employees feel as if living in Manhattan is a necessity, and we spoke with one young junior investment banker who explained that this isn't just for superficial reasons. He asked to remain anonymous due to the strict privacy regulations his job requires, but he has been working on Wall Street since graduating from Stanford University in 2011. "Most people think we want to live downtown because it makes us look good, but I work an average of 70-80 hours a week so for me any additional commuting time would kill me," he said. "Being able to walk to work has been a life saver, especially because I am regularly called in on weekends." He has been subletting different apartments in both Chelsea and Tribeca for the last three years, causing him to move every 6-8 months. He has attempted to get onto his own lease, but explained that although he meets all of the income requirements, his student loan debt makes him look "undesirable on paper." He gave up looking for his own place several months ago after several failed attempts and sketchy experiences. "I had given this one broker a cashier's check for $4,000 after she told me I was approved for the apartment I liked, and then she stopped returning any of my texts, emails, or phone calls for the next two days," he said. "I really thought I had just been scammed, but then she finally got back to me only to say that the building had declined my application." His annual salary of $75,000 allows him to comfortably pay $2,000 per month for his Tribeca sublet, but he said most of his frustration comes from the attitude buildings and real estate agencies give young people. "They are so unwilling to help you out in anyway, and it has just become so difficult to find a place to live when you're just starting out," he said. "Because of my student loan debt, they were requiring me to pay 4-5 months of rent in advance. It is just so unrealistic because most kids coming right out of college don't have $10,000 to hand over up front; it makes living here feel impossible." The co-chair of Square Foot Realty Howard Aaron has been working in real estate in Manhattan for the past 25 years and expresses his sympathy for younger generations of New Yorkers. "People who can afford to live in Manhattan are mostly the ones who have lived here for a long time, and gotten into their apartments 40 years ago," Aaron said. "I think people have really changed their state of mind about Manhattan, mostly because they've been forced to. People are going further uptown, further into Brooklyn and Queens to the areas that they can afford." Jack Eustace graduated from the Fashion Institute of Technology and has been working doggedly to start a career in fashion. Unable to afford the rent and living expenses in Manhattan, Jack has been commuting from Amityville, New York where he lives in his parents' second home. "I feel very lucky to have a place to stay so close to the city, because for me the main issue has been trying to balance the start a career for myself while making enough money to live comfortably," Eustace said. In addition to his monthly student loan payments, he is also paying $500 for unlimited monthly LIRR and Metro Cards. [caption id="attachment_72723" align="alignleft" width="300"](http://nypress.com/wp-content/uploads/2014/07/Property-main-story_young-pros-priced-out-1.jpg) Fashion blogger Kristi Scarrozzo works a second job as a bartender to be able to afford her Chelsea apartment, and also takes on sub-letters. Photo by Mary Newman[/caption] Despite the glamorous appeal of working at a fashion library, which regularly rents designer clothing to celebrities and Vogue photoshoots, Eustace was only making $22,000/year at his last job. Even if he were to find a cheap apartment in Bushwick, there would be no way to afford his student loans, or any additional living expenses, he said. "You have to be willing to live off peanuts to make it in this kind of industry, and you also have to be able to manage those peanuts to pay for the lifestyle that is expected of you," Eustace said. "I was often expected to attend different industry events wearing expensive designer labels, so affording an apartment in Manhattan has never even been a part of the picture for me." Many young people are forced to get creative with Manhattan real estate by converting one-bedroom apartments into a two or three bedroom spaces, or taking advantage of online networks like Air BnB and Craigslist. Kristi Scarrozzo works as a popular fashion blogger on her site theladyk.com and as a fashion stylist. She has been able to remain in her three bedroom Chelsea apartment for the past five years by renting the two other rooms to a number of sub-letters and working as a bartender in midtown. She has had 10 different roommates occupy the two other bedrooms since moving in. "I've been able to hang on to this apartment because I've always had a side job bartending or waiting tables," she said. "But at what point does that stop, I'm now 26 and don't want to be a bartender and the cost of living in New York keeps getting higher, making it more difficult to pursue my fashion work." Meg Stanton has been able to afford her Lower East Side apartment for the past few years by splitting a $4,000 per month, three bedroom place among four people. But with two of her roommates leaving, she is now having trouble finding a new place that is within her budget. "I've fallen in love with living in this area, but I don't think it is realistic to stay here after they move out," Stanton said. "Two bedrooms in our neighborhood are so priced out, and it might be easier to look if we used a broker, but I just can't afford a broker's fee this time." Stanton has until September to find a new place, but has started looking earlier than usual because she knows it will be difficult to find a situation similar to the one she has now, one she explains as being extremely lucky. "This is all really about supply and demand. It's a shame because such a low percentage of space available in Manhattan, landlords get to charge whatever they want," she said. "I mean it is a shame what's happening here in Manhattan, but soon there will be trendy neighborhoods in all five boroughs. These higher prices have completely changed the city."
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