According to recent analysis by real estate firms, singles in New York City face a staggering $20,100 ‘singles tax’ annually. This figure reflects the additional cost for individuals living solo in a one-bedroom apartment compared to sharing the space with a partner. While other metropolitan areas such as San Francisco and Boston also impose high living costs on singles, New York City leads the list by a significant margin.
The study, conducted by StreetEasy and Zillow, highlights that couples who cohabit in a one-bedroom apartment in New York save an average of $40,200 yearly in rental expenses. This cost savings starkly contrasts with the nationwide average, where pairs save approximately $15,123 annually. The higher demand for living space in New York, driven by an influx of young professionals wanting to experience the city independently, exacerbates these costs.
Emily McDonald, an expert on rental trends at Zillow, attributes the disparity to high demand. ‘New York City is abundant with young people looking to live alone. People want to live there, and because the demand is so high, that is a major reason for the discrepancy,’ McDonald explains. She further notes, ‘For a lot of people, it comes with a lot of value.’
Within New York’s boroughs, Manhattan tops the list for rental savings, with average one-bedroom apartments renting for $4,200. As these figures indicate, the cost of housing signifies a significant financial commitment, with almost half of renter households in the U.S. spending over 30% of their income on housing costs in 2023. Such a sentiment qualifies them as ‘cost-burdened’ according to government data.
Meanwhile, the report also identifies cities where singles can enjoy lower living expenses. Detroit stands out as the most affordable, with an average one-bedroom rent of $813 and a singles tax of just $4,876. Other cities like El Paso, Cincinnati, and Buffalo offer more economical living options for solo renters.
As home prices rise and mortgages remain high, many families are choosing to stay within the rental market. This trend adds competition to the rental sector. According to the Aspen Institute, renters tend to have less positive cash flow and fewer savings compared to homeowners, further illustrating the financial challenges faced by singles who opt for solo living.
Despite these challenges, recent trends show a leveling off in rent hikes across the U.S. January saw only a slight rent increase of 0.2%, a pattern that diverges from pre-pandemic growth averages. Concessions from landlords, offered to more than 41% of renters in January, indicate a competitive market environment trying to attract tenants.
McDonald advises singles considering solo living to be mindful of their financial situation. Beyond rent, expenses such as utilities and household essentials add to the financial load. ‘Household essentials cost more when they’re not split,’ she emphasizes.
Living alone in major urban areas, particularly New York City, comes with a significant financial premium, labeled as the ‘singles tax.’ While some are willing to pay extra for the lifestyle and opportunities, prospective solo residents should carefully weigh the costs and plan their budgets accordingly.
