The hunt (how can these people afford that co-op?)

Commenter “JerseyGuy” brought to my attention a recent NY Times article from the “Hunt” series, about how people find places to live in New York City.

Matt is a music teacher at public high school in Westchester, and Kate is a “freelance television producer.” The commenter wondered how they can afford to buy a co-op in Morningside Heights for the asking price was $869,000 and, which on top of that, has a monthly maintenance fee $1,750. Although there’s no real estate tax because it’s included in the monthly maintenance fee, that does seem like a lot of money considering they both have what I would guess to be jobs with only five-figure salaries. “Freelance” is usually a codeword for not steadily employed and not making a lot of money, and even a producer with a full-time job only makes a median salary of $58,585.

There’s also the mystery of where they are sending their six-year-old son to school. A public school in Morningside Heights is probably a public school full of blacks and mulatto Hispanics where a little white kid will get beaten up. But surely a public school teacher married to a possibly unemployed low-level person in the media industry can’t possibly afford to send their kid to an expensive Manhattan private school?

Sadly for Matt, both of his parents died recently and at a fairly young age given modern life expectancies. But fortunately for him, his father was one of the country’s top heart surgeons, so Matt could have easily inherited quite a bit of money. His father was probably making $500,000 a year. He could have saved up several million dollars, and even divided among three children, Matt might have inherited enough money to pay cash for the co-op. (Also, here is mother’s obituary if you are interested.)

I have not been able to find out much about Kate’s family background. All I know is that she grew up in Larchmont, which is one of the wealthiest villages in Westchester. Her parents are retired and living in Miami, Florida. They may be quite wealthy given that they are from Larchmont, or they might just be merely well off, but it’s impossible to say for sure. They don’t have much of an internet presence.

The bottom line here is that they were able to afford the co-op because Matt inherited money from his parents, and Kate may also be receiving parental assistance. And that's how a public school teacher gets to live like a member of the elite. How can you compete if your parents are merely middle-class?

* * *

UPDATE: "The Engineer" informed me that salaries of public employees are online. Matt makes $71,624/year. Not a bad salary for a public school teacher (which points out that well-connected children of wealthy parents manage to get decent salaries even at jobs which don’t normally pay that well), but it’s not enough money to afford an $869,000 co-op which has a $1,750 monthly maintenance fee on top of that.

Comments

[RandomMedStudent]

The average salary for a cardiothoracic surgeon has stayed the same at $500K for 30 years. That is, cardiothoracic surgeons in the early 1980s were making $500K/yr. If Matt's dad was one of the top guys, I imagine he was netting more than that.

The real decline in CT surgeon salary is due to a number of factors, but most notably the fact that conditions that used to require open heart surgeries can now be treated by a cadiologist (a fellowship trained hear-specializing internist).

I wouldn't be surprised if Matt's dad was worth more than $10M; he was almost certainly worth more than $5M. He died before he could actually spend down his money in retirement.

[GMR]

If dad is a teacher in Westchester, kid can probably go to school in that district for free or maybe a small fee.

[Peter]

While there probably was an inheritance, it's not as if the couple are earning nothing. Public school teachers make pretty good money these days, especially in an upscale community like Mamaroneck. I wouldn't be surprised if the husband's income is in the $75K range. While the wife may not work steadily, being a freelancer and all, surely in television production the money's much higher than in most industries.

While sending their son to a mostly minority public school might be inadvisable when he's older, it's not going to matter at age six.

[anonymous]

@ Peter, how do you figure that it doesn't matter at age six?

[de Broglie]

Do you know how money young people in New York are living there are on their parents' dime? From where I come from (a suburb of Chicago), this is a common occurrence. Even without deceased parents, many people are helped out by their upper-middle class parents. I really like this blog and I found this story interesting, but I think the stories on this phenomenon are probably not very surprising to most readers. I didn't read the article, but I think some people are surprised to learn that normal seeming people are really wealthy. The couple are not what we would call a pair of geniuses, but they are almost assuredly on the right-side of the bell curve. Many people like this come from wealthy families and have large trusts but do not live a lavish lifestyle. Many readers of this blog and Half Sigma seem to think that the wealthy all live like Martha Stewart (Ina Garten is a better example if you know who that is). Many of the children of the wealthy try to make it on their own but have a large cushion that helps them out. Thus they do not really live lavish lives.

[School Bus]

de Broglie,

We know that. It's the fact that these people get to live in proximity to the upper class when they wouldn't be able to if they only had their middle class jobs.

You also said, "Do you know how money young people in New York are living there are on their parents' dime?"

How money indeed. A slip that sounds appropriate.

[map]

"Many of the children of the wealthy try to make it on their own but have a large cushion that helps them out. Thus they do not really live lavish lives."

What these people have in abundance is an undreamt of level of peace of mind. With that, you do not need a lavish lifestyle to signal status. You need enough to meet the status requirements of your peer group. The rest...but the rest is the richness of knowing you have that cushion.

That cushion covers everything they say and do. It melts away stress and worry. Who would not want to live a basic middle class lifestyle knowing they have a $10 million kitty backing them?

With wealth like that, you do not need stuff.

And no, you can't compete with them.

[DaveinHackensack]

What RandomMedStudent says sounds about right, given folks I've known in that field.

"How can you compete if your parents are merely middle-class?"

Don't live in an over-priced neighborhood in an expensive city. Read The Millionaire Next Door. Don't get caught in status traps.

[S_McCoy]

Why would a school teacher want to live among people who are far out of his league in earnings and status?
I would not want to live in a neighborhood or belong to a club where everyone was making at least twice what I was and had jobs that easily identified as higher status than mine.

[Ian]

Any guy who regularly gets laid in New York City will tell you just how many 20-something women are fully funded by their parents. I know plenty of girls who work at non-profits yet still somehow afford $4k/month one-bedrooms in doorman buildings. My last girlfriend lived in a $1.5 million place in the West Village -- she couldn't even afford the maintenance fees by herself.

The only people I know who actually pay for their grown-up apartments (grown-up meaning not a $1100/month room in a shitty East Village walk-up) are my friends in finance. For everyone else, the math just doesn't add up.

[superdestroyer]

I find it humorous that for three people born and raised in Mass, that one lives NYC and two live in northern California. I guess Matt did not have the brains that his sister, the MD, had.

I wonder if Matt if thinking about attending Columbia since he will be living close by or if his wife freelances work for Columbia University.

[Insight]

All these generic median incomes are way wrong for the NY Metro area, and don't forget, median is just median. 50% make more. This is probably an example of the 50%.

[Sdfsfsdfsd]

Not that it matters, but that teacher clears $100,000. But yes, both are getting massive financial assistance. I can almost guarantee that co-op was paid for in cash.

[Matt in RTP]

I live in a low cost of living city (Raleigh), but I still have friends who are supported by their parents.

I go out, drink, spend a fair amount on drugs, clothes, etc., but I am proud to say that I haven't taken a dime of my parents' cash since I was 19. Gotta learn how to hustle lonely gay men (I'm serious). It isn't like they have kids' college funds or private schools to shell out for. I'm doing them a favor.

Fucking rich kids. I've really reached a breaking point with spoiled brats who get everything on daddy's dime. One guy I know, who makes like 14 an hour at a non-profit, lives in much nicer apartment than me, drives a much nicer car, and is out every weekend. His dad is a partner in a law firm and mom is a nurse manager at a big hospital. He's the most egregious example, although such parental largesse seems to fall mainly in the laps of young women.

[J]

A former roommate of mine was a television producer at MTV. She was making 160K+. That's more than double the median salary quoted above.

[sestamibi]

"I wouldn't be surprised if the husband's income is in the $75K range. While the wife may not work steadily, being a freelancer and all, surely in television production the money's much higher than in most industries."

And this (inheritance notwithstanding) is sufficient income to buy an $869K condo plus $1750 monthly maintenance??!?

[Dan]

"Gotta learn how to hustle lonely gay men (I'm serious)."

Wot???

Speak for yerself, bro... I'd rather eat at soup kitchens and sleep under bridges.

Too proud to take money from the parents but not too proud to "hustle lonely gay men"? I'd say somebody's pride meter needs calibrating!

[John]

"And that's how a public school teacher gets to live like a member of the elite. How can you compete if your parents are merely middle-class?"

Sorry, why do I want to compete again?

[DaveinHackensack]

"I can almost guarantee that co-op was paid for in cash."

You'd be surprised. A friend used to work in a division of a major investment bank that handled jumbo mortgages on their way to getting securitized, and the folks taking out those mortgages included some wealthy and well-known Hollywood stars who could almost certainly afford to pay cash for their places but didn't. I doubt there's even much tax benefit to them at that level, but I guess they'd rather stay more liquid. Or it's a way of helping out a cousin who's a mortgage broker. I don't know. Heck, even Mark Zuckerberg has a mortgage, when he could afford to buy his house dozens of times over: http://www.sfgate.com/business/article/Mark-Zuckerberg-s-mortgage-rate-1-05-3711118.php

[Allerious]

"I'd say somebody's pride meter needs calibrating!"

Well....successful male escorts out-earn biglaw associates, junior bankers, traders, you name it. So yes, finding a gay male sugar daddy can be a quick ticket to success. And there are many of them out there in big cities. Quite a few are married with children.

But then, we wouldn't want little secrets like that getting out, would we? I mean, where would we be without all the peons slaving away from elementary school, through high school, then college and grad school, all for for the "privilege" of being chained to a desk for 8-12 hours a day and earning barely more than a retail manager when adjusted for total hours worked.

[ode]

Dave
Don't live in an over-priced neighborhood in an expensive city. Read The Millionaire Next Door. Don't get caught in status traps.

I agree. An $800,000 home is the upper middle class equivalent of a $300 pair of basketball shoes for somebody in the ghetto or better yet a $1000 per year smart phone plan for somebody on food stamps. It's all status whoring for a person's peers.

[Drole Prole]

When most of the US is full of soulless crappy cities, the tiny few decent ones became extremely popular with ever swelling demand. From the post WWII era to the early 1990s, most Americans were content living in crappy generic burbs. Inner-cities were seen as bad places where crime was rampant. But sometime in the mid to late 1990s, the notion of walkable and dynamic cities became popular among younger generations who were sick of living in generic burbs. The demand for walkable and dymanic cities has swelled since then, while the supply hasn't been able to keep up with it. You can't just build another NYC or San Francisco overnight; there is a very long lag time that can't keep up with growing demand between attempting to create a dynamic walkable city and actually having one that hits critical mass. Seattle and Portland still have some room to grow, so you'd best lock in lower real estate prices there sooner than later.

Also, once people have secured their nest in their dynamic and walkable nabe, they sometimes become very NIMBYish and block all sorts of developments and policies in order to maintain their utopia while preventing others from having a piece of it. Many beneficiaries of rent control will do all they can to maintain the status quo. They've got their slice of affordableness, so the hell with any person having to pay overly inflated current market rates to subsidized them. The person with the million dollar view will protest development that will increase housing supply just so they can selfishly have a unobstructed view of the Golden Gate and make some specious argument about the overdevelopment, killing the environment, and/or preserving the small 'historical' shack. Nevermind the fact that having such a view will cause other to suffer higher rents or real estate costs.

[Turambar]

That article reads like an Onion parody- they named the kid Bennet and the dog Smithers??? At least the realize he is going to be ghey:

"Otherwise, “there is no escape,” she said, adding that at some point, “Bennett is going to be here with teenage boys "

The other thing of note is how big of an FU is it to your hard charging surgeon father to become a public highschool band teacher? I bet there were a lot of screaming matches in that house when someone announce he was dropping out of pre-med when back home on Christmas break.

[Turambar]

Hmmm from the obit it looks like the dad divorced Matt's mom and hooked up with his anesthesiologist.

No wonder Matt passive aggressively decided to go into a looser profession like playing the trumpet in public school. Screw you dad. Nice of the dad not to cut him out of the will and force him to get a real job in a city he can afford.

[HS: You don't know that. Dad might have encouraged junior to follow his "dreams" or whatever.]

[Pat Boyle]

What does "hustling lonely gay men" mean? Is this guy a homosexual prostitute? I wouldn't have thought that there was much money in that.

[DirkY]

Again, Matt in RTP needs a blog. So many HBD bloggers are boring middle aged computer geeks like HS, but he is a bisexual weightlifter with a boring office job in middle America who supplements his income with prostitution so he can quit said office job earlier. He also said he was raised by hippies.

Also my suggestion to HS is he do a next 12 month series of predictions and encourage his blog friends to do the same in some friendly competition. He always does "I correctly predicted posts" so lets see if be wins.

[Just Speculating]

"You can't just build another NYC or San Francisco overnight; there is a very long lag time that can't keep up with growing demand between attempting to create a dynamic walkable city and actually having one that hits critical mass. Seattle and Portland still have some room to grow, so you'd best lock in lower real estate prices there sooner than later".

And what about flyover country? There's room over there for growth, but most people are either too dumb or lazy to see this. America might evolve into another dysfunctional China, where its residents overpopulate the coastal areas, driving up real estate prices and lower the standard of living due to overcapacity. Much of China's interior is hollow empty, not too different from the Midwest.

[Matt in RTP]

"Speak for yerself, bro... I'd rather eat at soup kitchens and sleep under bridges.

Too proud to take money from the parents but not too proud to "hustle lonely gay men"? I'd say somebody's pride meter needs calibrating!"

Well, I don't actually make that much -- just enough to cover 'incidentals' (drinks, PEDs, clothes). When I first graduated from college and was making $12.50 an hour to transfer numbers from paper to an Access database, then I needed every last penny I could get my hands on. Now, however, I have a (boring, nerdy) white collar job, with a decent white collar salary.

The real lure of it, I think, is the attention. When you look good (i.e., hard body and masculine), and take your shirt off in a gay bar, you can have any man there. That won't happen with women, unless you are a professional athlete or movie star or something, and even then...there are women who would turn you down. To get the same kind of reaction from women as you do from gay men, you would have to be the ruler of the entire world.

[DaveinHackensack]

"No wonder Matt passive aggressively decided to go into a looser [Sic, presumably?] profession like playing the trumpet in public school."

Watch Mr. Holland's Opus if you think being a band teacher is a loser profession.

As for working as a teacher if money isn't an issue for you, what on earth is wrong with that? That's one of the great things about inheritances and wealth in general: it lets talented people turn their talents to something other than the most remunerative fields. One of my best teachers in high school was married to an extremely wealthy business owner. Was she a "loser" because she decided to be an excellent teacher rather than try to earn as much money as her husband?

[DaveinHackensack]

Ode,

"I agree. An $800,000 home is the upper middle class equivalent of a $300 pair of basketball shoes for somebody in the ghetto"

Using your analogy, Morningside Heights isn't even a comfortable or prestigious pair of shoes.

[The Undiscovered Jew]

"They may be quite wealthy given that they are from Larchmont, or they might just be merely well off, but it’s impossible to say for sure. They don’t have much of an internet presence."

Please enumerate what you mean by wealthy, upper middle class, middle class, and poor. How much money qualifies for which position on the pecking order.

[Just Speculating]

"Any guy who regularly gets laid in New York City will tell you just how many 20-something women are fully funded by their parents. I know plenty of girls who work at non-profits yet still somehow afford $4k/month one-bedrooms in doorman buildings".

That is if these guys are screwing White women. Losers who settle with Asian and NAM women will tell you otherwise.

[Turambar]

"Watch Mr. Holland's Opus if you think being a band teacher is a loser profession. "

I should fact check my self from a maudlin Hollywood movie?

[The Engineer]

Dude makes $75k a year. See this website:

http://seethroughny.net/payrolls/schools/

[Daniel]

Obama voters.

[DaveinHackensack]

"I should fact check my self from a maudlin Hollywood movie?"

I suppose you could interview a bunch of music teachers and their students to "fact check" yourself, but watching the movie would be a more practical way of exposing you to their general perspective.

[Turambar]

In general asking people how super important their jobs are isnt the best way of uncovering the truth.

If you go by TV, there is a desperate shortage of singers and we need to hold highly publicized contests to locate and coach them.

In reality we are already full up. We have all the singers we need.

[DaveinHackensack]

Ask their former students. Look at the statistics of what music students go on to do in life. If you think the purpose of music education in high school is to produce contestants for reality shows about singing, you are parading your ignorance.

[Lloyd]

Obama voters indeed.

But hey...it must suck to be them. They can only be friends with other upper class liberal do-gooders. The can't fit in with the Wall St. crowd, their Black and Latino neighbors, or with the "real" middle middle class (teachers, etc.).

[Lloyd]

How much do you want to bet they support Occupy Wall Street and claim to be part of "the 99%"?