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How far does $250K go in New York City?

The Stuyvesant Town and Peter Cooper Village apartment complexes in New York City. The sprawling 110-building Manhattan apartment community, owned by Tishman-Speyer and partner BlackRock Realty, took another step towards default after a court ruled the companies had improperly deregulated apartments and increased rents.

Samantha Chapnick in her one bedroom Manhattan apartment.

The Chapnick's living room, home to Samantha Chapnick's desk, a day bed and the family's bikes.

TEXT OF STORY

Tess Vigeland: Earlier we visited Beverly Hills -- probably the most cliched epicenter of wealth in this country.

But in fact New York City is the most expensive place to live, according to Forbes and several other surveys. Average monthly rent is $2,800. Median income, however, is just $63,000.

So when you ask people whether $250,000 makes you rich, they'll often say -- Well, not in...

Jay-Z's "Empire State of Mind": New York...

So we asked Sally Herships to find out how the Big Apple manages to take such a big bite out of those $250,000.


Sally Herships: Truth is, New York's so expensive. People like me -- who make less than $250,000 a year -- basically live in places like Brooklyn. So I tracked down another native New Yorker, one who makes a lot more money than me.

Samantha Chapnick lives near Columbus Circle. It's a really nice neighborhood across the street from Central Park. Chapnick is a business consultant. She's in early 40s. Her husband is older and he's retired. But Chapnick still works and she earns about $250,000 a year -- so much money! She must have an enormous, luxurious apartment. She told me she works from home.

Herships: Describe your apartment for us.

Samantha Chapnick: Small, small, small. My 6'4" husband, myself and my almost 9-year-old daughter live in what I think is about 550 sq. ft.

There's the kitchen...

Herships: Do you have a microwave?

Chapnick: It's in the hall closet.

Then there's the bedroom. It's a nice size for one bed, but there are two.

Chapnick: Sometimes I feel like we should put beads up and act like we're in the '60s.

The whole family shares the bedroom -- mom, dad and their 8-year-old daughter. But, it's not as crazy as it sounds. They're paying less than $1,000 a month. Their apartment is rent-stabilized. That means the rent can only go up a certain percentage each year.

My fiance and I are planning to keep our roommate, after our wedding, for the same reason. When you have a deal like this in New York -- you hold on to it. Chapnick says she sees it as an investment for her daughter.

Chapnick: How many people wouldn't wish that their parents saved for them a one-bedroom, near Columbus Circle, overlooking the river for what will maybe be $1,200 or $1,300 for her?

Chapnick hopes a reasonably priced place to live will free up her daughter's financial future. So if the family's money isn't going on pricey New York City rents, where is it going?

Chapnick: Well, first we have private school. Which after you get done with the auction and everything like that is going to be a good $40,000 to $45,000.

Of course, they chose to send their daughter to private school, but is it really necessary? Chapnick says the last public school they looked at was too overcrowded -- one teacher for almost 30 kids. And she says her friends who send their kids to public school end up donating thousands of dollars anyway. And of course you can't forget high city taxes.

Chapnick: And then you have your dental expenses for three different people. So that roughly is $15,000 to $20,000, $25,000 maybe.

Yeah, you heard that right. Remember, Chapnick's a freelancer. She has medical insurance, but skipped dental. This year she needs crowns, root canals and implants. Of course, there's always something.

Chapnick: Then you're left with let's say $20,000 for food, for clothing.

And for expenses like transportation. The family doesn't have a car. They have monthly subway passes and bikes squeezed into a corner of the living room.

Herships: It's amazing because $250,000 sounds like so much money.

Chapnick: So it's not really as much as it sounds like. I don't want to do a sob story because if you live somewhere else, you have no right to complain.

But her family doesn't want to leave Manhattan.

Chapnick: My husband and I have certainly said to ourselves, listen, we're going to scrimp, we're gonna save. But at the end of the year you look at it and you think -- maybe the biggest ticket item we ever buy is maybe an Apple laptop computer at $2,000. It's not like our big ticket item is like a new Lexus or a BMW. It's not a $10,000 vacation.

But even so...

Chapnick: I think we're fortunate. Not as fortunate as I'd like to be, but definitely more fortunate than most.

In New York, I'm Sally Herships for Marketplace.

Samantha Chapnick in her one bedroom Manhattan apartment.

The Chapnick's living room, home to Samantha Chapnick's desk, a day bed and the family's bikes.

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Hate to be pedantic, but do you think you could pay attention to the correct use of "then" and "than" in your transcript text? Without re-reading, I think "then" was used incorrectly every time. Makes one wonder whether the writer ever took a math class ("less than or equal to"; remember that phrase?) or an introductory logic class. Makes the whole piece seem less well thought-out THAN it might be. Otherwise, an interesting read, so thanks for that.

What the heck are they doing that costs $15,000 to $25,000 a year on dental? I have not spent $10,000, heck, I do not think I have spent more than $5000 on dental expenses my whole life. My teeth are not perfectly straight, but I can live with that. I take care of them and have not had but two cavities in my 39 years. Something is seriously wrong if one is spending between $5000 to $8000 a year per person on dental. If this family of three can spend just on dental what many families have as a total income and survive on, then yes they are not just rich, then they are filthy rich, no matter what they might want to contend.

It's hard for those who never lived in NYC for any length of time, to understand why people live in such small places with such high expenses. Yes, there are other urban cities with lower costs of living... but they can't hold a candle to what NYC has to offer culturally, professionally and over all in worldliness. Just depends on what one deems "quality of life".

This scenario is rather common. I have a very good friend who is married, has a 9 year old son, they live in a rent controlled one bedroom and make far less than $250,000 combined. They finally moved their son into the living room and built put up book shelves to divide the room. It works for them. With little spent on rent, and without a time consuming commute, they are making their living situation meet their needs. Me, I left the city for a backyard and trees but changed my work setting too to avoid the commute. I pay crazy taxes rather than private school tuition. This isn't about how much you need ($250k or not), but a question of priorities and preferred lifestyle.

Numbers don't seem to add up. If they make $125K after taxes, $80K after school, $65K after the world's most expensive dentist, $53K after rent.......why do they only have $20K left for groceries and other stuff.

One teacher for every 30 students is NOT overcrowded, however their 550 sq. ft. apartment is. Two parents and a child in one bedroom? Any psychologist will tell you that is just plain unhealthy. This is the United States for crying out loud--not some third world country.

Is there some new definition of school "overcrowding" that I don't know about? A definition that involves 1 teacher to less than 30 kids? I am not a parent, and I have no experience with New York Public Schools, but in my personal definition, "Wealthy" means that you consider a private education indispensable. That's part of the definition.

If it were me, I would homeschool my kid and save that $ to pay for college. Since the dad is already retired, she could get a great one-on-one education from him, which I think would be better than even the top private schools. I guess I don't get that whole connections thing...really, do you need to make connections in high school!?! Isn't college where that should be starting? Seriously, if I were the daughter I'd much rather have that money when I grow up for college and grad school, since, for jobs, they don't really care much where you went to high school if you went to a good college and get great grades.

I forgot to add, I really appreciate Samantha Chapnick being so open about her finances to serve as a point for discussion. It can't be easy putting yourself on the radio talking about the sacrifices one has to make on $250k. Thanks Samantha.

Rich is being able to spend close to the median income on one child's private schooling. I'm aware of the advantages (and the connections made) at a fantastic prep school can be very significant. But let's not be misleading. I did a quick search on the most expensive prep schools. At 40-45k, you are sending your child to one of the 5 most expensive schools in the USA.

Being able to afford one of the most elite and expensive institutions in America and the advantages they confer is the very definition of wealthy. Even if you have to make some sacrifices to do so.

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