Answering Your Complaints About The 'Cost Of Living' Post
Many of you -- mostly in Dallas -- really hated that post showing just how ridiculous it is to match Cravath. Let's take a look at your issues...
Yesterday’s piece on the wildly disparate cost of living facing associates in a variety of newly enriched markets really touched some nerves.
Most of them in Dallas.
Given the volume of social media discussion of the piece, it seems as though a follow-up is in order to address some particular criticisms.
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Plus, we get to look at some more houses.
We’ll tackle four broad critiques, which are all, in a sense, related. You can use the link to jump to the specific complaint that interests you the most:
1. The “Dallas” (or Charlotte) house chosen for the article was completely wrong;
2. It’s unfair to pick apartments in the city for some markets and suburban locales for others;
3. No young associate would really buy something that maxed out their budget; and,
4. Associates outside NY really do deserve more money, and I’m a jerk.
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First things first. A lot of people hate on the “Dallas” house. The major complaint is its location North of the city:
* No self-respecting big law associate would live in Murphy unless they grew up there.
* The “Dallas” house is so far out of Dallas that no one would live there and work downtown at a firm making $180,000! Dramatic, but unrealistic. I had to look on Google maps to figure out where Murphy, Texas even is.
* Lastly, the house you have for Dallas is about an 1.5 hour commute to work for any associate at a big law firm. Everyone lives in the city where 650k will get you something decent, but the house you showed would be 2.5MM in Dallas and not in the burbs.
By the way, this exercise has taught me that none of you have any idea how long commuting takes. I also heard claptrap about the Charlotte house being “1.5 hours each way in traffic.” I get the impulse to massively expand the time you expect something to take if you don’t want to do it. I do the same thing any time someone invites me to a party above 14th Street. But, as I’ve learned to my detriment, it’s a tactic increasingly undermined by the Internet and smartphones. Google Maps uses smartphones to track traffic and offers a pretty solid report on the true state of any commute.
Thankfully Google Maps can settle these disputes because it tracks traffic in real-time. During rush hour today and last night, both the Murphy house in Texas and the Monroe home in Charlotte were less than 50 minutes each way in traffic. That seems like a long commute, however that’s not too far off of the commute one would undertake to get from that Williamsburg Brooklyn apartment to Cravath (32-40 minutes depending on catching the train).
Now, obviously a first year in Dallas or Charlotte would probably pay less for a very nice apartment 5-10 minutes away from the office. First, the point of the exercise is what they theoretically could purchase without being too far and holding commutes — reasonably — constant. Second, this actually would just get at the argument from another direction if I had to say “for that super ritzy $300K townhouse 10 minutes from work, a New Yorker would spend $640K to live 40 minutes away! However we choose to go at it, the point remains that the same nominal amount in Texas is much, much more than in New York whether it’s spent in Murphy or in your pocket around the corner from the office.
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Thus, I thought a 45-minute commute was fair game. Apparently everything’s bigger in Texas except the patience for a commute.
Another tipster thought the peculiarities of Dallas should change the whole equation:
The effective property tax rate here is about 2.2 percent, which drives down what you can afford substantially from your assumption of 0.8. Homeowner’s insurance is not so cheap here, owing to hail, tornadoes, etc. I would say at least $2500/yr for the price range you are talking about –not the $800 Zillow defaults to. That brings you down to about $500,000 on the Zillow affordability calculator.
Maybe re-run your search for homes north of downtown, south of I-635, east of the Dallas North Tollway and West of US-75 with the new $500,000 budget… and see what you come up with.
Well, sure. But I also never really claimed to provide a proper analysis of each market. Many NY apartments involve persnickety busy-bodies demanding that you prove you have massive amounts of capital, the Chicago apartments didn’t include condo fees, the tax rates were always rough guesstimates (even after you consider I was also trying to play with the effective rate rather than sticker price).
However, given the particular annoyance at the Dallas example, we’ll re-run it with the location and amounts (as near as we can get) suggested.
This falls just outside of I-75, but it’s not too far off. And it’s $479K so we’ll run with it.
The kitchen feels outdated, but there are cabinets for days so there’s that:
Check out the hearth and… is that a 3 Season room back there?
So it’s not as extravagant, but here’s a cheaper, closer example of Dallas home. I hope now that there’s no longer any reason for the good people of Baja Oklahoma to be mad at me…
The rest of the complaints continue on the next page…
