Tuesday, 30 August 2016

How much would New Yorkers pay for a shorter commute?

According to a new analysis by FiveThirtyEight, the magic number is $56 per month—with some caveats

As the old saying goes, time is money—and for some New Yorkers who are desperate to shorten their commute, that comes at the price of about $56 a month. An analysis conducted by FiveThirtyEight found that city dwellers will pay that extra bit of cash for an apartment that’s just one minute closer to Midtown or Lower Manhattan by subway.

"Living in the world of New York real estate, you very quickly realize, is all about trade-offs," StreetEasy economist Krishna Rao told FiveThirtyEight. It helps that with closer proximity to mass transit comes with other convenient perks like more businesses, restaurants, nightlife, and other options.

FiveThirtyEight’s analysis, conducted using StreetEasy data, looked at more than 63,000 one-bedroom homes in StreetEasy’s data set. Their methodology:

StreetEasy linked each home to its nearest subway station, then calculated the time it would take to travel from that station by subway to either Midtown or Downtown Manhattan.3 We ran a regression to find the relationship between the rent of a one-bedroom home and the average of travel time from the station nearest to it to Midtown or Downtown.

Hence, the $56 figure.

Here are some other takeaways from FiveThirtyEight’s analysis:

  1. Their analysis suggests that the L train shutdown could affect rents in Williamsburg to the tune of "$200 to $450 off the rent of the typical Williamsburg one-bedroom." Whoa.
  2. In a similar vein, rents in the neighborhoods soon to be served by the Second Avenue Subway are already rising, even though the line isn’t due to open for a few more months (assuming the MTA gets its you-know-what together).
  3. Based on the average salary for New Yorkers—$29 per hour—FiveThirtyEight found that saving one minute "on 20 round-trip commutes each month works out to two-thirds of an hour saved from commuting time, or just under $20 a month on average."
  4. From the analysis: "Rents for homes an hour away from Midtown look pretty much the same as rents for those just half an hour away."

There are, of course, caveats: For instance, not everyone works in Midtown or Downtown and the study doesn’t take into account time one may spend traveling via other methods of transportation besides the subway (bike, bus, walking, or driving).

And while StreetEasy’s analysis found that New Yorkers would save only $33 per month, the FiveThirtyEight number is, obviously, higher—which they chalk up to StreetEasy "us[ing] a simpler method to get a similar result." SE looked at all homes, not just one-bedrooms; it also only accounted for commuting to Midtown, not Lower Manhattan. So, you know, take everything with a grain of salt.


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