Oh it'd be the entire unit rented out. Isn't that where NYC's population boom is coming from - childless roommates, DINKs, imported foreign workers who probably don't have kids... And NYC is great for that. You're spending most of your life in an office, living as close as possible and not having to deal with driving would make life easier.
I do live in a condo complex. It's like 50-50 owned and rented out.
NYC has primarily Co-Ops, not condos. About 75% of NYC real estate are Co-Ops. I think it's a unique city in that regard in the US. They are a bit of a different animal than Condos. You don't actually own your unit, you own a share of the building. There are usually stricter rules in many Co-Ops for renting, but some do operate similarly to condo buildings. But yes, as you say, of course people do buy condos and co-ops as investment properties and rent them out. I don't deny that whatsoever, what I'm trying to tell you is that people that can afford to buy them to live in themselves, they do so and they don't rent out the extra bedrooms, they have families in them. I do follow some NYC real estate groups online because NYC real estate has a causational effect on most of the market I work in Jersey.
Also mortgages do change when a condo or co-op building is less than 50% occupied by owners. If you owned a condo in a 4 unit building, and now three of the owners are renting their units out, it will be harder to sell as fewer lenders will give that loan as the building is 75% renters. I'm in that situation now. I'm in a 3 unit building. When I moved here it was three of us as owners. One girl moved in with her BF and rented her unit out. The other unit sold their condo and an investor bought it and rented that out. So now my building is 2/3 renters. A buyer will have a harder time getting a loan to buy my unit. So some buildings will keep their owner living in them ratio above 50% in the association rules.
The markets I work are much of the coast of NJ that borders the Hudson, from Jersey City in the south to Edgewater in the North. And while there are single family homes, these are areas where there are tons of multi-unit buildings, from 2 unit to 80 unit condo buildings. I can tell you that most of the nicer 2 and 3BR condos are not bought by investors. They are bought by couples with kids or who are planning to have kids. These condos are as much or more than a nice single family home would be if you went a bit further west into more traditional suburbs with almost all SFH. Without a doubt, as you've said, people live in multi-unit buildings because they can't afford a single family home where they want, I agree, but you keep saying that's everybody - but there are plenty of people who can afford SFH in the burbs, but choose to live in more dense areas, for amenities like culture, food, arts, diversity, walkability, etc.. This is not just from my small experience but from all my colleague's experiences.
We talk about our clients and the market. There is no invasion of investors buying these new 3BR condos to rent them out. It's couples with kids. Many come from NYC. Many are from around here and want to upgrade their 1BR or 2BR to something bigger as they are now married and gonna pop out a baby or two. 600K or more will get you a single family if you went further west. They choose to buy in a multi unit condo building because they want to be nearer to the city and nearer to those amenities. Some will move to the burbs as their kids grow, some will not. It really varies.
I can tell you, on a personal anecdotal level as well, as 3BR condos have been developed near me, one thing I have seen more in the neighborhood is couples with little kids or strollers.