America is full of famous roommates: Al Gore and Tommy Lee Jones, Chandler Bing and Joey Tribbiani, Robin Williams and Christopher Reeve -- but no one can top Jack the cooking student, Janet the florist, and Chrissy the typist from "Three's Company." My research suggests that Jack, Janet and Chrissy each saved 42 percent compared to living alone, allowing them to spend more money in their local communities rather than on fuel and cheap imports.
The plot for all 172 episodes of "Three's Company" is apparently the same: some sort of big misunderstanding coupled with innuendo that was considered to be very suggestive in the late 1970s. And, to be fair, having roommates often leads to misunderstandings. But are they worth it?
A finding from my preliminary analysis of housing expense data shows that total housing costs compared to number of roommates follows a square root function. So if your total housing costs living alone costs $1,000, getting a roommate will cost about $1,414 ($1,000 times the square root of 2), and getting two roommates will cost about $1,732 ($1,000 times the square root of 3). Per person, this would be $1,000, $707 and $577 respectively, so savings per person decreases with each additional roommate.
Of course, the exact savings depend on the specific property, but sharing a lot of the fixed expenses can add up. Jack, Janet and Chrissy paid less per person on heating and cooling, the kitchen and living room, and other implicit costs associated with renting and moving. Presumably, this allowed Jack to more easily afford his cooking school tuition, spend more at the neighborhood tavern (The Regal Beagle), and generally have more misunderstandings coupled with innuendo.
In economic terms, by living with Janet and Chrissy, Jack is shifting his consumption patterns from residential energy use and furniture to education and hospitality. The latter likely generates more employment and positive spillovers for his California neighborhood.
But, of course, there are downsides. I spoke to a number of people who have recently brought in new roommates -- usually friends, parents or adult children -- but sometimes bringing in a stranger also provided needed income to prevent foreclosure. And while much less fun than Jack, Janet and Chrissy, there will always be misunderstandings and challenges, particularly with multi-generational households with different lifestyle preferences.
But if filling that extra room can help keep you in your home or spend money on things that are more important to you, be prepared for the financial and psychological risks. Here's what I would have advised Janet and Chrissy before they let Jack move in:
Make a formal agreement. The girls should have added Jack to the lease, so he can be formally liable to the Ropers for rent. If you can't do that, be sure to create a written agreement specifying the terms of any living arrangement that clearly outlines when rent and utility expenses are due. Don't just use formal agreements with strangers, use it for friends and family too.
Don't lie to your landlord. Janet and Chrissy had to lie to Mr. and Mrs. Roper and say that Jack was gay in order to let him move in. I guess in this specific circumstance it might be okay, but in general it's not. Be sure to check out your lease to see if it specifies a maximum number of occupants.
Of course, larger households can't cure a recession, but we all need to think of ways to target our consumption on things that are more meaningful to us. And while Comcast and Chinese factories and Middle Eastern oil magnates might be hurt by it, the local restaurants, florists and other business owners can hire more Jacks, Janets and Chrissys, which helps all of us. And after all, misunderstandings can certainly be fun.
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