High property costs, high costs of living, and — much maligned — the highest property taxes in the nation prove “middle” class is all relative.
Thiphakoun “Tipi” Vyrasith and her husband, Michael Tuesca, knew they didn’t want to raise their two daughters in Las Vegas, so the couple, who worked in the casino and hospitality industry for nearly 20 years, did a cross-country search: Chicago, Miami, Houston, and New York were all on the table. As chance would have it, they landed jobs in and around New York City and found a comfortable little rental in Greenburgh.
They loved the neighborhood. Check the box. It had good schools, nice neighbors, and they were close to New York City. Check. Check. Check.
A year later, they rolled the dice on a home for sale that opened up across the street. It seemed like a good bet for this middle-class family with solid credit, decent savings, and family members willing to help. They managed to come up with a down payment — not the full freight of nearly $84,000, or 20 percent, desired by most banks, but enough to qualify for a mortgage they could afford.
They were excited about building their new life here.
Then came a dose of reality. Closing costs, upwards of $20,000, whereby the bankers, lawyers, and home inspectors all got their cut; property repairs, such as a new roof and electrical system, that didn’t come cheap; and a property-tax bill approaching $19,000 a year busted their budget like a boulder on thin ice.
“It was sticker shock,” says 42-year-old Tipi, whose daughters are now 6 and 5. “I feel like I need a second mortgage for the taxes.”
While they did in fact borrow more than anticipated for the closing costs and renovations, this isn’t a case of buyer’s remorse or a house under water as much as it’s an eye-opening lesson about living in Westchester County. To state the obvious: It’s expensive. Very expensive. Real estate, property taxes, commuting, groceries, childcare, entertainment, and basic needs and amenities — they all combine to prevent those hard-earned dollars from ever getting comfortable in places like, say, a savings account.
Even for families like Tipi and Michael’s, who say they have a “comfortable lifestyle” and jobs they enjoy (Tipi is the food & beverage director at Empire City Casino in Yonkers; Michael is the member-services manager at Life Time Fitness in Harrison), the American dream isn’t all Champagne wishes and caviar dreams. Far from it.
“In New York, we’re more on a beer budget,” says Tipi with a mixed dose of reality and optimism. “We’re always going to need a dual income. We’re just going to be workhorses.”
Welcome to Westchester County, where even good earners feel the pinch.
The county, with all its suburban charm, great schools, accessibility, public parks, and selling points touted by real estate agents, corporate heads, and those bullish on the county, has a way of making people earning solid incomes feel like they are on a financial treadmill that has only one speed — faster.
Why? Because good schools, public services, layers of government, access to public transportation, and a relatively strong real estate market contribute in different ways to the costs and benefits of living here.
Like elsewhere in the country, there are pockets of extreme wealth and poverty here, and strewn throughout is a large segment of the population that is quietly facing serious pressures. Their numbers are shrinking across the country, and those who hope to remain card-carrying members of the middle class must make any number of spending and lifestyle decisions, such as downsizing, forgoing vacations, working two or three jobs, moving in with their parents, living on credit, borrowing from retirement or putting it off altogether, and, in general, tightening their belts.
For them, living here can be a mixed bag of blessings, sacrifices, and choices — not always easy ones.
What Exactly Is ‘Middle Class’?
There is little consensus among experts of exactly who falls into the middle, especially when you consider how broad the spectrum is. Household income is the primary criterion, but so, too, are wealth (inheritance, investments, property, and savings), education levels (college degree), and consumption, such as owning a car, taking vacations, or dining out.
According to a recently published Pew Research Center analysis, for example, US households earning anywhere from $48,000 to $145,000 fall into the middle-class category, which is about half of all Americans. But those figures don’t hold up in Westchester, where the cost of living is relatively high, and because of that, far too many middle-class people fear they are a job loss, illness, or other bad circumstance away from the poor house… or that they’ll never be able to retire. For the middle class, those scenarios and others are like raindrops at a picnic: You hope the downpour never comes.
Nationally, the middle class as a percentage of the general population has been shrinking for decades, says Rakesh Kochhar, associate director of research at the Pew Research Center. The percentage of people in the middle went down nearly 10 percent, with slightly more gains on the top end, says Kochhar. “The middle class is struggling.”
Economic declines renewed their pressure on workers with the arrival of the new millennium. In the years that followed, recessions, financial crashes, and housing bubbles either stymied growth or crushed people altogether. “It was not a good decade for businesses or households,” Kochhar says.
As a private music instructor and owner of Musical Munchkins, Eileen Oddo, 57, has felt the shifting currents of the economy directly since starting her own business 33 years ago. The White Plains mother of two children, ages 28 and 22, started to see a drop after 9/11. By 2008, her business was in danger of shuttering, in part because when household budgets are tight, arts and music are among the first expenses to go. “Our business dropped off by 100 students a year for five straight years,” Oddo says. “Parents started going back to work, then they went back in droves.… You can’t make it here in Westchester unless you have a double income.”
As musicians — essentially freelancers — she and husband John, a well-respected music arranger who has worked with the likes of Rosemary Clooney, Tony Bennett, and Michael Bublé, are used to improvising and adapting, so they kept playing through the challenges, living modestly and watching where they spent their hard-earned dollars.
Although Oddo’s business has stabilized in recent years and John, 63, has a steady clientele, expenses like property taxes (roughly $18,000 a year) and rising healthcare, liability, disability, and other insurance requirements (nearly $35K per year) continue to pressure their bottom line. “When you’re self-employed, you have to pay for everything” yourself, she says.
Despite those challenges, Oddo’s bullish on the economy, her business, and White Plains in particular, because of its diversity and proximity. “It’s absolutely turned around. … I don’t feel like [we are] in peril now,” she says. “We have the things we need, and we have the things we want.”
So, too, can Guy Carpenito attest to these twin challenges of being the head of a middle-class business and household. “Being middle class is like treading water,” says the 56-year-old contracting-company owner. “You’re always nervous but okay.”
Carpenito, who grew up in Mount Vernon, moonlights as a home inspector and part-time building inspector. The extra income has been necessary to keep up with work demands, his family, and paying for the education of his two children, ages 28 and 25, who both have master’s degrees.
“That’s what it takes to live in Westchester,” he says of juggling several jobs along with his company. “I’m a firm believer that you’ve got to stay diversified.”
That philosophy has served Carpenito well over the years, but it hasn’t inoculated him against downward spirals in the economy or the shifting burdens of owning a company. Demands and growing government mandates, like paying liability, disability, workers compensation, health insurance, and any number of other ever-increasing fees, such as licensing and building permits, increase his costs and gobble up roughly 35 percent of his revenues. “Everything adds up,” Carpenito says. When coupled together, he feels a constant pressure of working and meeting payroll while competing with less scrupulous contractors who don’t always play by the same rules.
He and his wife have a nice life in their Eastchester home, and they try to take two vacations a year, usually somewhere warm. Carpenito isn’t exactly sure when he’ll retire. He’d like to go south, if he can, but much of that will depend on his savings and where his children settle down.
The Golden Apple
Outsiders generally view Westchester and its nearly one million residents as wealthy — even rich — based on their relatively high incomes when compared with other parts of the country. But even with a comparatively high average gross taxable income of $145,000, according to state statistics, and the fact that 18 percent of households earn more than $200,000 annually according to US Census figures, the numbers fail to provide a complete picture of what it’s really like to be in the middle.
Researchers from the Pew Research Center estimate that people living in the New York Metropolitan area need to earn roughly 22 percent more than their
middle-class counterparts elsewhere in the country. But even that estimate seems low when you consider that the average Westchester home value is approaching $600,000 or that rents can start at $3,000 a month or that the median property-tax bill is just south of $14,000, compared with $2,132 for the rest of the country. What’s more, it costs about a quarter of a million dollars to raise a child in the Northeast — before college is factored in — or that annual daycare costs for two children in Westchester can cost nearly $35,000, according to the Childcare Council of Westchester. When all is said and done, Careertrends.com claims the cost of living in Westchester County is 50 percent higher than the national average.
Housing is the key driver in the Northeast’s higher cost of living, says Pam Villarreal, a senior fellow at the Dallas-based National Center for Policy Analysis. Referencing a quarterly index of metropolitan areas, Villarreal says prices in this region for food, utilities, transit, and such don’t necessarily jump off the page compared with other cities, but putting a roof over one’s head can average 4.5 times more than other parts of the country, including areas throughout New York State. “It’s really housing that brings up the cost of living,” she says. “There are some huge discrepancies across the state.”
Such realities may have seen locally and have much to do with that old real estate adage: “location, location, location.” One need only look at local real estate ads to know that living in Bronxville, Scarsdale, Rye, or Bedford costs more than living in, say, Yonkers, Tuckahoe, Bedford Hills, or New Rochelle.
The United Way of Westchester and Putnam, which studies livability and in recent years has been tracking figures on people who are working but unable to afford basic necessities, estimates that a family of four in Westchester needs $160,000 a year just to get by. Called a sustainability budget, that’s what such a family has to earn to pay for basics like housing, food, transportation, childcare, and healthcare. In other words, it’s not living lavishly, and every community — including some of Westchester’s tonier populations — has its share of people who are working but unable to keep up.
To meet their needs, many people are working longer hours, two or three jobs, or cutting corners on needs like childcare and healthcare, says Alana Sweeny, president and CEO of the White Plains-based United Way of Westchester and Putnam. “The costs are outpacing people’s abilities to pay for them,” she says.
That’s a scenario that John Fitzpatrick and his wife, Kate, are familiar with. Last year was the first time in over a decade that the union electrician didn’t have to take 10 weeks of furlough, or unpaid time off. That means his pay jumped to roughly $130,000. But the added hours, even when combined with Kate’s income from a part-time office job at Bronxville Village Hall, don’t seem to make a dent — not with four kids, including two in college, nor an approximately $11,000 tax bill that has doubled in less than a decade.
“It doesn’t matter how much we make,” John, 54, says with a laugh. “We always seem to be about 20 grand light.… Basically, there’s always water in the boat.”
To get by, the Fitzpatricks live frugally: They rarely vacation (three years ago, the family went to Rocking Horse Dude Ranch for three days) and dine out only a few times a year (sushi is their preferred splurge); they don’t toss money around on expensive clothing or electronics (their kids have one pair of sneakers, not three, and they have only one TV in the house). Hand-me-downs, simplicity, and value are central tenets of their lives.
In keeping a close eye on finances, Kate cut up their credit cards a few years ago, and they both gave up smoking, which, they say, saves them a few hundred dollars a month. It all helps when you’re on a tight budget.
The Fitzpatricks live modestly in their Tuckahoe home, an early-1900s Victorian they purchased in ’98 for $198,000, and they try to do whatever repairs and maintenance they can themselves. “The day we have more than one bathroom, we’ve moved up a class,” John says lightheartedly. “It’s torture.”
With two children in college and two more gearing up, paying tuition is — and will be — a challenge, even painful, both Kate and John admit. So they are making sure their kids are contributing, earning scholarships, taking out loans and working campus jobs, to offset college dorm costs. The third and fourth children (ages 13 and 12, respectively) may have to resort to state schools, where tuition is lower.
“We can’t pay for everybody,” John says. “We need to keep them invested in the game with us.”
Disagreements are typically about money, and retirement is a tough conversation altogether; John isn’t sure he can keep up the physical demands of his job well into his 60s. But this loving couple approach it the way they’ve approached the rest of their lives — with perseverance, priorities, and a good sense of humor.
“Tuckahoe is still affordable when compared with other communities,” says John, a former village mayor. “There are a lot of positives living here.”
Changing Middle Class
The concept of the middle class is changing, says Farrokh Hormozi, a professor of economics at Pace University who has taught there for more than 30 years. While family incomes have gone up — largely because so many households now have two earners — so, too, has the cost of living. Despite the higher incomes, when the higher costs are coupled with a loss of skilled-labor jobs in manufacturing, factories, and technical trades (the closing of the General Motors plant in Tarrytown in 1995 is one example), Westchester, like many other places across the country, is seeing its middle class shrink.
Some people are doing better, but many others who once worked as skilled labor in manufacturing or related jobs are slipping onto the lower rung, he says. “We don’t have a middle class as we once did.”
The middle class has lost ground in every state from 2000-2013, according to a Pew/Stateline analysis of US Census data. While New York’s middle class shrunk by just under 3 percent, the losses were more profound in places like Wisconsin (-5.6 percent), Ohio (-5.2 percent), Nevada (-4.9 percent), Georgia and New Mexico (each at -4.8 percent).
The shrinking middle class is an outgrowth of the changing job market from manufacturing to information, says Villarreal, the policy fellow at NCPA, a nonpartisan group that advocates free-market solutions. Because there is less demand for lower skilled labor, a greater need for high-tech workers and federal programs are typically one-size-fits-all across all states (and designed to help those in need, not those starting businesses). Local governments can lead the way by encouraging entrepreneurship and small-business ownership while resisting the temptation of over-regulation, she says.
“The economy is evolving,” Villarreal says, citing ride-sharing giant Uber, restaurants, and other service industries as classic examples where local laws can make or break a new idea or squash a mom-and-pop altogether. “The key is to have public policies that allow people to adapt to the economy and change.”
For sure, Westchester has more than its share of local governments and bureaucracies (6 cities, 19 towns, 23 villages, and 425 governments in all), but unlike many other regions, it is buoyed by newcomers who are escaping New York City and its higher cost of living. It’s also somewhat stabilized by older adults who raised families here, choose to stay and are living longer. Both population segments, however, can have a tough time here for varying reasons: Seniors are trying to keep up with rising costs, high taxes and living on far less, while younger people haven’t reached their peak earnings yet.
For this reason and others, young professionals find it challenging to afford life here in the county. Take Samantha Diliberti, who, when she graduated college at age 21, had more than $100,000 in student loans — and a job that paid a pittance. “All of my money went to loan payments,” she says of a $700–$1,200 monthly bill that, when coupled with rent, left little else.
In the years that followed, she landed better jobs with more pay and occasional bonuses, but even that couldn’t reverse the mounting cycle of bills. Though she liked living in Brooklyn, the rent was high (often $15,000 a year). She also had four roommates.
Diliberti knew the math didn’t add up, so she moved back home with her mother in Yonkers, to save for a modest place. Although Mom and daughter get along well, it’s a sacrifice for both. “The main reason I’m doing this is that it’s the responsible financial choice,” Diliberti says.
In moving to the burbs, she bought a car, a used Mitsubishi Mirage, and tries to skimp on other nonessential purchases. She and her mother have had giftless Christmases for the past two years, as she feels no savings is too small. “Because I’m saving to buy, I’m definitely more frugal.”
At 26, Diliberti is now debt-free and saving for a co-op in southern Westchester. “It’s a happy medium between the city and suburbs,” she says. “I definitely can’t afford the five boroughs.”
Christina Barry, 27, followed a similar plan. Her parents, who are small-business owners, taught her the virtues of being debt-free. After graduating from Iona College, she moved home to Brewster, paid off roughly $50,000 in student loans and socked away the bucks. “I saved every penny I ever made,” Barry says.
It paid off. She’s mostly debt-free and bought a $124,000 co-op in Yonkers, which is close to work and close to New York City, where she and her friends like to socialize. Despite her sensible financial planning, frugality, and job stability, Barry is learning that life on her own is indeed expensive. So, too, is she hyper-aware that housing, property taxes, and the cost of living in Westchester could force her and her boyfriend, who also lives in Yonkers, to move elsewhere when they eventually tie the knot. “You have to think about these things,” Barry says. “I like the area; we have the best of both worlds, …but you have to pay a premium here.”
Many residents who don’t want to pay that premium are fleeing the state altogether for less expensive climes, like Florida, Texas, and just about anywhere the weather is warmer and the taxes lower.
A May 2016 report in the (Rochester) Democrat & Chronicle found that New York lost more than $22 billion in wealth between 2009 and 2014 from people fleeing the state. Of that, three counties in Florida — Palm Beach, Broward, and Miami-Dade — gained $1.2 billion of New York’s wealth in a single year. Much of this can be attributed to retirees decamping, but any Westchester resident knows a tale or two of people leaving for a lower cost of living.
The prognosis, however, isn’t all bad, says Pace’s Hormozi. Changing trends in healthcare, growing economic sectors, and the revitalization of many towns and cities with walkable communities could prove to make Westchester a vibrant place for young and old alike — as long as there are pockets of affordability and an education system that not only prepares some students for higher education but others for careers in skilled labor and the trades.
“This type of transformation is necessary,” Hormozi says. “Westchester County is part of the social transformation that has always taken place.”
What’s more, the economics professor adds, one should never discount the middle class, if for no other reason than one key attribute: “Hard work is the defining characteristic of the middle class,” he says.