The Prices of Fancy New York Apartments and Where You Could Live on a Decent Salary
As I continue to look through the Sunday October 10, 1926 New York Times real estate section, I wanted to get a better understanding of what a dollar could buy when it came to apartments.
First I did some income research.
According to FRASER (the Federal Reserve Archival System for Economic Research) , a little over 4 million individual tax returns were filed in 1926.
The average net income on those returns was $5,306.43.
The average amount of tax liability was – get this – only $176.11!
So you might think that everyone was doing fairly well. Good incomes, low taxes.
But, take into account that the proportion of the population filing taxes was only 3.52%. The U.S. population was 117,397,000.
According to the Economic Bureau of Research, 44 million Americans were gainfully employed and the average annual US income was just $2,010.00.
So what could you rent or buy in New York on an above average salary, figuring 1/3 of your income would be used for housing? Let’s say your 1926 job is assistant manager at a company and you make $4,000 per year (adjusted for inflation,) which is nearly $50,000 in 2011 dollars with very low deductions for taxes.
(After a comment from a reader we decided to display alternate formulas on buying power over time – click here to see how far old money would take you today depending on the situation.)
Below are three pages of advertisements (click and click again to enlarge an ad to full size high resolution.) The first page highlights Park & Fifth Avenue apartments. Note that most prices are given in annual costs, not monthly.
The “15 minutes to Wall Street” best describes the sort of person expected to rent an eight room apartment at 1035 Park Avenue on the corner of 86th Street for $4,800 per year. The other ads on this page are clearly appealing to people whose income is at least five figures. So these apartments are out of your range.
The next set of advertisements on another page look like this.
Six rooms at 22 East 89th Street (between 5th and Madison Avenues) are half the price of its Park Avenue neighbors at just $2,400 per year. So if you wanted to live the good life but stretch yourself financially, you might be able to afford a better apartment. Of course, remember that many of these buildings will not allow you to rent or buy if you are Jewish. As one ad by Byrne & Bowman points out: these are “apartments of the better type in restricted localities…”
“Restricted” was the word used to let others know that Jews, (no need to mention other undesirables like Blacks or Hispanics – who were never accepted) were not welcome in buildings or resorts. The movie that won the 1948 Academy Award for best picture “Gentleman’s Agreement” dealt head-on with this rarely discussed subject.
A 1969 article seen here in New York Magazine by Nicholas Pileggi profiled the continuing issue of restricted co-ops. Does it still happen today? Ask a real estate broker.
Getting back to 1926, The Drake, an apartment hotel at 56th Street and Park Avenue does not divulge prices, but points out that it is for “fastidious people” who “fancy themselves hard to please” and “at prices that are moderate for the luxuries offered.”
So if you were not fastidious or rich, where could you live and what would a regular apartment cost? You had many more options as evidenced by the regular line listings seen below.
52 West 91st Street three rooms “beautifully furnished” would set you back $75 per month. If you needed more space, a five room apartment at 416 West 57th Street was $85 per month. If you wanted to raise a family or just needed to stretch out – 164 East 37th Street offered seven rooms at $100 per month.
The tenements and walk-ups where most people lived, were not advertised in the New York Times. They were two or three room cramped apartments in densely crowded areas and could be rented for $25 -$50 per month. Brooklyn, Queens and the Bronx started wooing more families with better amenities and lower costs than similar Manhattan apartments. The populations of the other boroughs grew dramatically as mass transportation was extended and improved.
The conclusion, as you might have guessed, is that really nice Manhattan apartments were expensive and out of the reach of most people in 1926. Today, those same apartments are astronomically expensive.