Finding the costs they don’t tell you about
Back in 2017, I needed to leave New York. The congestion, noise, crowds were all getting to me. The rent was killing me.
Like any millennial, I turned to the internet to help me find a new city. Soon, I was crunching the numbers in various so-called “cost of living calculators.” These allow you to compare multiple cities’ average cost of living, including line items for different categories.
When I compared New York, New York to Boulder, Colorado (Spoiler alert: I ended up moving to Boulder), I was disappointed to see that the cost of housing was similar on average. A 1-br apartment rented for $1500+ both places. In fact, looking at a site like this in 2017, Boulder, Colorado was listed as only 1% cheaper than New York, NY — and New York is the most expensive city in the country.*
A year later getting settled in Boulder, I pay $775 in rent (+ 2 roommates), not far off from the $825 I paid in NYC (rent-controlled apartment, + 1 roommate).
But the difference in quality is vast. A dingy $1600 / month apartment in New York does not remotely compare to its luxurious counterpart in Boulder.
Cost of living calculators can spit out a number that says “You’ll be paying about the same rent.” And they’re right on the surface. But “average rent” is just a number. It has no relation to value.
What the “average” person is willing to put up with in one place might not be the same as what the average person somewhere else is willing to put up with.
Will your $800 apartment have wood floors or moldy old carpet? Will you have 2 roommates or 5?
Will you be remotely near your work or become a super-commuter? Will you live on a quiet street or next to a semi-permanent construction site? Will you be near a grocery, or have to walk a mile through a giant Bed-Stuy grocery desert?
In short, how much quality of life does that $800 / month buy you?
Space and location
My Queens apartment was in a 1920’s building with that old architectural charm. It had a pretty view of a train trestle and was close to the grocery store and the gym. Rent control was the only way we could afford to live in something that nice.
At the same time, there were major drawbacks. I was 50 minutes from work, so spent a lot of time every day waiting on crowded platforms and riding on the subway. I wore headphones constantly because the noise on my commute was so loud, at times deafening.
We had a tiny galley kitchen — not really big enough for more than 1 person to be in it at once. No washer or dryer, so a lot of schlepping laundry to the laundromat.
I couldn’t have a bike because there was simply no place to put one in the apartment. You can’t leave your bike outside in NYC unless you don’t want to own it much longer.
Like many apartments in New York, ours had been modified to add bedrooms. Our once-one-bedroom had been made into a 2-bedroom by converting the old dining room. This was my roommate’s bedroom. The flimsy glass doors between the living room couch and her bed didn’t do much to block light or sound. When she went to bed, I had to retreat to my own room because light and sounds in the living room kept her awake. Every night around 10, I became a prisoner in my own home.
A year later, here I am in Boulder. I’m paying about the same amount. My room is about the same size. But I’ve got so much more.
My commute to work is a 20-minute walk through a beautiful neighborhood with tree-lined streets. I see the odd car or biker, but mostly it’s just me and the trees and whatever podcast I happen to be listening to that day.
If I forget my lunch, I just walk back home.
My apartment backs up onto a quiet grove of tall trees. We don’t have a view of the train trestle here. Instead, two of the bedroom windows look out onto the mountain sunset.
We have a big kitchen with an island and a double sink. We have a cathedral ceiling and a fireplace in the living room. We have a coat closet. We have a pantry. We have a washer and dryer.
When it comes to bikes, we have 2 choices: keeping our bikes in the extra space by the door, or locking them to the bike rack outside. Either option is clean and safe.
All the bedroom doors close!! 😄 I can stay in the living room all night if I want to.
After I moved into this place, I kept trying to think what an apartment like this would cost in New York. Maybe triple what I’m paying now?
But the truth is that an apartment like this simply doesn’t exist in New York. There literally is no apartment in New York that backs up onto a quiet grove of trees, where you can look up and see hundreds of stars.
There is no apartment where you can safely leave your bike outside overnight.
There is no apartment where you can walk to 5+ hiking trails.
A lot of this is a factor of expectation. These calculators tell you the median cost, after all — it is what people do an average. In New York, it’s common to battle for weeks to find a place to live. People are so happy to have found something — anything — that they begin to manage their living situation expectations down.
In Colorado, people might complain about the rent, but they aren’t used to compromising on the basics. People expect to have laundry in the apartment. They expect apartments to have closets and big kitchens. They expect bedrooms to have real doors.
It’s not normalized in Colorado for grown-ass adults to have to live in makeshift bedrooms hidden behind flimsy partitions. It’s considered weird to have an apartment with no dishwasher. It’s shocking when your apartment gets mice or cockroaches or bedbugs. (One Brooklyn friend jokes that you haven’t really lived in New York until you’ve had the trifecta: mice, cockroaches, and bedbugs. I hit 2 of the 3.)
Costs they don’t tell you about
Ever heard of Broker Fees? This is one of those costs in that won’t show up on the cost of living calculator, because it’s unique to New York. With a broker fee, when you decide to move in to an apartment, you pay the real estate agent 1 month’s rent.
I paid $3k in broker fees while I was in New York, and neither time did the real estate broker spend more than 2 hours on me. Unless you are really good at getting into places where a friend or landlord will show it to you for free, you’ll be shelling out on broker’s fees.
What about medical care? “Easy!” you say, “I’ll have insurance!”
NerdWallet agrees — the medical costs between Denver, CO and Brooklyn, NY are about the same!!
BULLSHIT. Insurance in New York costs double compared to the cost in other parts of the country. The cheapest option on healthcare.gov, for example, costs $260 per month in Miami. Brooklyn cost? $471. Per month.
I had a much better plan when I moved there, costing ~$800 / month. Sure, my employer chipped in, but I still had to shell out a few hundred dollars a month at my first job there.
Where is cost of insurance premiums on the cost of living calculator?
Answer: It’s not there at all.
On top of that, the insurance company does not pay providers enough to keep them afloat in the high cost of living area. In NYC with real estate at a premium, office space costs are 3+ times what they are in other parts of the state, plus they need to pay their staff more to keep up with the high cost of living .Many providers choose not to accept insurance at all.
You’ll quickly find, for example, that almost no psychiatrists or therapists accept insurance. What’s the going rate of therapy, you ask? $200 per session. In Virginia, a therapy session costs $80, but nearly all providers there accept insurance. My total costs after insurance: $20 per session.
The hidden costs of time / stress
Any rent calculator is going to miss a crucial piece of the rent price: time / stress. The time / stress piece can end up adding hundreds of dollars to your monthly expenses.
Because I was so time-poor in New York, I cooked less and bought lunch out more. I outsourced things (like laundry) that I would normally do myself.
You’ll notice that travel is not a line item in the calculations, because it’s not considered a necessary living cost. And yet most middle class New Yorkers travel frequently in order to escape the stress of the constant noise and crowds. (One doctor told me that for my own health, I should leave the city for at least one weekend every month.)
20% of New Yorkers — 1 in 5 — suffers from depression or another mental illness, compared to only 6% nationally (1 in 17). Tell me none of that mental illness is stress related. 😬 As a result, a huge number of New Yorkers are spending money on therapy expenses (see above…). We also spend a lot on spas and massages to ease stress. The cost of managing stressors quickly adds up.
Cost of living calculators provide one data point, but it’s a smaller one than you might think. In order to understand the true cost of living somewhere — and the value-to-dollar ratio — you’ve got to do a lot of sleuthing, redditing, and crowdsourcing of information.
Two cities that cost “the same price” on paper might offer wildly different value for that price. One might have all kinds of hidden fees that aren’t listed in the brochure.
Ginna blogs about spending less and living more at frugalkite.com.
*They came to this conclusion because housing prices were said to be cheaper in NYC ($600k vs $700k median house price).
Numbers don’t tell you everything — what you’d get for $600k in NYC is a tiny, dark studio apartment right next to the highway, an hour away from work. You’d have co-op fees of at least $500 / month — another expense not included in cost of living calculators. There would be cracked sidewalks lined by trash instead of trees. You’d get cat-called every time you got off the subway.
What you get for $700k in Boulder is a quaint, fully renovated 3 bedroom house with a backyard, located in a beautiful neighborhood half a mile from downtown.
From Boulder you could still get to world-class shows and incredible food in Denver in 50 minutes — less time than it takes in NYC to get to equivalent shows. But in Colorado, you’d get a seat on the bus instead of standing the whole way.