Real Estate

How New Yorkers are hacking an exorbitant rental market: Treat it like dating

A customer looks at listings on display outside a Brown Harris Stevens offices in New York.
Brendan McDermid | Reuters

Dating in New York City is considered to be one of the Big Apple's most difficult tasks, but it now has a close second: hunting for an affordable apartment, which has become next to impossible in an era defined by surging real estate prices.

For some time, apps such as Roomi have been acting like Tinder for the apartment-hunting scene, pairing roommates as if they were potential lovers. Still, some apartment seekers are not thrilled about the idea of cyber connections, and are seeking to meet potential roommates in person first.

The latest in the rise of the "roommating" culture is "speed roommating," a citywide event hosted by roommate matching site, where apartment seekers and apartment owners rendezvous at a bar in an effort to find suitable living mates.

Dating Tweet

'They can't afford it'

One might think these events are only filled with young graduates and professionals in their 20s. However, Matt Hutchinson, SpareRoom's director, told CNBC recently that the company is often hosting attendees in their 40s, 50s and even 60s. It's a reflection of how city dwellers of all ages are struggling to find affordable housing in a torrid market.

"The older roommates may have been coming out of a relationship and were hoping to keep their apartments, but they can't afford it," Hutchinson said, adding that frothy rents are driving older renters to find a roommate for the first time in their lives.

At a recent SpareRoomate event at Revival, a bar in the Gramercy area of Manhattan, the mood was set for both house seekers and renters to make a rent connection. On the bar's second floor, brick walls, candles and alcoholic beverages helped complete a scene that was a lot like speed dating.

Beer in hand, 30-year-old Yana Nesterenko told CNBC that even though she rents her own apartment for $1,900 in Brooklyn, she's willing to pay up to $1,800 for a room just to save a few hundred dollars."I want to have more money in my budget to travel in the winter," she said.

Enter apartment sharing, which for many renters is a way of dodging the exorbitant cost of living in the Big Apple. According to SpareRoom data, the average price for a room in a shared NYC apartment was $1,253 in May. None of the attendees who spoke with CNBC at the event complained about rent prices.

"The prices have been going up, but it seems like everyone is OK with it," Nesterenko said.

'Stress of daily life as a renter'

The Fort Greene neighborhood of Brooklyn, New York.
Getty Images

New York's increasingly tight rental market is what New York University's Furman Center referred to as a "mismatched growth in demand and supply for rental units" in a city where the average cost of a one-bedroom rental is well above $2000, according to Rent Jungle.

With no relief in sight, a tight market has forced apartment hunters to be creative about how they find a place to live.

"I look at this pattern of the roommate phenomenon — or the intensity of the roommate phenomenon — as an indicator of the stress of daily life as a renter," Jonathan Miller, president of Miller Samuel Real Estate Appraisers and author of Douglas Elliman's monthly housing market report, told CNBC in a recent interview.

Just in the borough of Manhattan, the median rent price for a one-bedroom apartment was $3,424, according to the May 2016 housing report.

Renters don't get a lot of space with those astronomical prices: The report said the average apartment size was a relatively modest 748 square feet. For context, the median rent price of a one bed-room apartment has soared 10.9 percent in the past four years, while the square footage has managed to remain relatively consistent, Miller said.

For Pernell Celestine, the challenges renters face aren't necessarily related to price or about finding a room. "It's about finding the right roommates," the 24-year-old financial planner said.

However, money remains the key motivation for many. SpareRoom's Hutchinson said that those who opt for sharing are looking at massive savings. He said the difference between living alone and with roommates can mean more than $1,000 per month in savings.

Celestine, who was seeking a room in Brooklyn or Manhattan, is willing to pay $1,300 a month.

"If I want everything that's on my wish list, I probably can't afford it," he said, adding that amenities are at the top of his list.

SpareRoom reports that for a studio in Manhattan, tenants are paying an average of $2,442. While a bit cheaper in Brooklyn, renters are coughing up about $1,500 on average for a studio apartment and $1,738 in the borough of Queens, according to SpareRoom. On a parallel note, the roommate match-making company told CNBC that in cities such as L.A. or San Francisco, rooms are averaging $971 and $1,571 respectively.

But this may be the end of soaring rent prices, according to Miller.

"What we're seeing right now versus a few years ago is that the rental market, in terms of the growth of rent, is leveling off. So, we're seeing more concessions offered by landlords as a result," he said.

"The leveling off is largely due to affordability — there's an affordability threshold that's being reached."