Why Is New York City So Freaking Expensive? 10 Reasons

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New York is a city where you pay sky high rents, spend sky high amounts for coffee, and constantly live beneath the never ending din of city taxis honking away in the street. So how come it’s so expensive to live there or even visit? Whether you’re new to NYC wondering how you afford to be there, are hoping to move there, or just interested, understanding the why’s behind NYC’s notorious price tags provides insight into what this town is all about and why it’s so expensive to live there.

The cost of living in New York is not all bad — it’s a reaction to historical quirks, high demand and actualities that keep prices high. Let’s dig into the reasons one by one

Real Estate Taxes and Property Values

New York’s real estate taxes are for the strong of heart. The city’s high property values mean heavy property taxes for landlords to pass on to renters or to be built into home prices. It’s high stakes real estate, whether you’re buying or renting can get loaded into the (already steep) costs of real estate.

Cost of Living and Wages

Yes, New Yorkers work at a higher wage, but that doesn’t mean they are bank rolling. So those paychecks are being eaten up by the cost of living. Basic services such as groceries and utilities are all paid at a premium. The high cost of living essentially erases any extra income, makes it as if you are just earning more so you can spend more.

Transportation Expenses

The cost of keeping NYC moving is humongous with one of the largest, busiest, public transportation systems in the world according to Wikimedia. Fares always seem to creep higher, so fares help pay for subways, buses and upkeep. And taxis and rideshares are pricier if you don’t want to go public transit here due to the traffic and demand.

Competitive Job Market

The city’s job market is notoriously competitive. There is ample talent in NYC and many people decide to come here for job opportunities. Salaries in some industries are raised in response to this competition, and companies pay for this by passing the extra costs onto consumers in the form of higher prices for goods and services.

High Demand for Limited Space

Space is as rare in New York as gold. You only need to crumple eight million people into a handful of boroughs, and the fact is there’s not enough space for everyone to have a roomy apartment with a view. Price works its way up on a limited amount of housing, thanks to high demand. You could say that New Yorkers are making you pay for the privilege of having their space and, well, some little elbow room.

Luxury Amenities & Lifestyle Options

Luxury of New York is unique and unmatched by any other place. It’s a city with high-end gyms, designer stores, and exclusive rooftop bars all added to the list. However, these luxury amenities are paid for, resulting in a cost of living environment that’s steep for those who make middle class salaries. Living in NYC means the “extra” is just baseline.

Tourism and International Appeal

New York City is a hotspot for tourists all around the world. Prices are driven up by millions of tourists paying a visit each year. It’s clear that restaurants, shops and attractions all know that people will pay more to experience the city. Another layer in the city’s high cost structure is based on the economy’s reliance on tourism, leaving locals sometimes caught in this price surge.

Costly Education and Daycare

There’s probably no surprise that education and childcare in NYC costs your head a spin if you’re raising a family there. Fees are usually enormous for private schools, after school programs and daycare facilities.

Food Prices and Dining Out

Excessive Dining Out — Image Credit: Jep Gambardella via pexels

It doesn’t have to be a fancy restaurant meal, even grabbing a slice of pizza or a bagel can be pricier than you’d think. High rent for restaurants and food markets, labor and competition make New York City food cost high. While eating out is a staple of New York life, it’s far from cheap, even at the typical dollar slice joints, some of which have had to increase their prices to pay the rising costs.

Labor & Maintenance Costs of Building

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Every towering skyscraper or brownstone had a team of workers behind it to maintain it and because of the very high construction and maintenance costs of these buildings, even more costly labor must be hired to keep them free of damage and safe. Paying janitors, security guards and handymen fairly adds to the cost of living in NYC.

Endless Events and Entertainment

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Living in New York City comes with one perk, the entertaining options; there are Broadway shows, concerts, world class art galleries to keep you entertained 24 hours a day. Although, these options don’t come cheap. Many people compete for limited seats at these high demand events, so prices are often sky high! There’s always something to do, but there’s a price tag on it when it comes to having fun here.

Disclaimer: This list is solely the author’s opinion based on research and publicly available information.