If you're moving to NYC, you should know what's required. I know that I didn't, and a lot of people making the jump don't either. Your housing will be the highest cost you'll incur when living here, and it's not uncommon for new transplants to get sticker shock when they're hit with the true cost of renting.
A general rule of thumb is you'll need 40x your annual salary to qualify for nearly every apartment in Manhattan. That rule of thumb applies to Brooklyn as well. Because I don't deal with rentals in the other boroughs, I can't speak to their requirements. I also know that NJ, specifically Jersey City has much lower standards.
The reason landlords can change these numbers is, well, because they can. Not only could they require 40x earnings, but they could also force the broker fee on the tenant. That's changed as of late, with rents dropping more than 16% from their all-time highs.
40X seems pretty random and without context. Let's give you a few numbers to noodle on. The median asking rent reported in January was 2750, down from $3,500 the year prior. Based on that median number, you'd need to make $110,000 to qualify for the apartment. That doesn't include any application or broker fees. From the outside looking in, that's a lot of money. But you also have to consider, the median household income in Manhattan is ~$86,000.
In Brooklyn, the median asking rent was $2,395. You'd need a salary of $95,800 to qualify. Again, we're getting a little closer to the numbers lining up.
Now, many newcomers to The City don't live alone. That's how they make ends meet, and they get to live in Manhattan. Many people have roommates until their salaries grow above the numbers required to move on their own. It's not unheard of for people to live with roommates until they move in with a significant other. We're constantly sharing the rent, and it just comes with the territory. What you lose in privacy, you gain in cutting your commute time. A commute from the outer boroughs or NJ, your commute can typically be 30 minutes at a minimum. The typical commute time is 32 minutes for Manhattanites and 45 minutes from the other four boroughs. If you're coming in from the Bronx or Brooklyn, that's more than seven days a year that you're commuting.
Not long ago, new employees were able to pay months in advance or increase their security deposit in order to qualify. Landlords were willing to allow it, considering they got their money upfront. International students and workers also had the opportunity to live in an apartment without a stateside guarantor. It made sense to me that it was allowed. Unfortunately, laws were passed that changed that. Landlords could no longer accept larger deposits or months of rent in advance. It puts international students at a disadvantage, to say the least.
The last option these potential renters have are guarantor websites that, for a small fee, will be the guarantor for your apartment. If your parents are outside of the Tri-State, they're typically not allowed to guarantee your lease. It's too much for a landlord to pursue money in another jurisdiction. Demand is typically so high that it doesn't behoove a landlord to take on that risk. These guarantor websites change that. Websites like Insurent, The Guarantors, and Leap easy, lower the barrier to finding an apartment you love in such an expensive place.
The 40x rule has been a mainstay for a long time, and it's not going anywhere. This should help you in making a decision when you finally decide to get a place of your own. Remember, Jersey City, Brooklyn, Queens, etc., are all very viable options. Plus, with the addition of Citi Bike, NYC as a whole has gotten "smaller." Citi Bike is one of the better innovations in the last decade to New York, and biking is easily the best way to get around.
That's it for now. If you have any questions, you can email me at firstname.lastname@example.org.