Hipsters love high/low, right? (angela n., flickr)

It’s not like Melanie Malkin ever pictured herself living on the Upper East Side, a neighborhood that has, over the past 50 years, all but disappeared from the dreams of the young and the hip.

“I mean, when I first moved up here, I didn’t want to move up here. Never, never, never,” Ms. Malkin said, who grudgingly took a cheap sublet in the neighborhood seven years ago when she was 23 years old and working for MoMA. “Nobody wants to move here. When I tell people I live here, they’re, like, eww.”

But loath as Ms. Malkin was to leave her first apartment on 29th Street, she wasn’t making a lot of money working in the museum world and she found a rent-stabilized one-bedroom on 87th Street between Lexington and Third Avenue that cost $775 a month (it’s now $938 a month). In the early days, she kept telling herself that it was convenient and cheap, but then something unexpected happened.

She started to love the Upper East Side.

It’s close to Central Park, a quick walk to some of the city’s best museums, the little side streets are filled with quirky mom-and-pop shops and after some exploring, she found a handful of downtown-style restaurants and bars. She likes the neighborhood so much that she even held her 30th birthday at Carl Schurz Park, the oddly quiet gem on the East River that is home to Gracie Mansion.

“The posh/frat boy stigma of the Upper East Side kind of dominates people’s thoughts, but actually, 29th Street, where I used to live, was really fratty and it was pretty bland. I love where I am now. It’s more of a neighborhood, it’s kept its history and roots, it’s genuine,” said Ms. Malkin. “Maybe people are just lazy, they just want to live someplace that’s already cool, not to have to seek out and explore.”

“I have a friend who teases me that I’m a pioneer, that it’s going to blow up and become the next Williamsburg,” she added. “But I don’t think so. It’s a great place to live, but I can’t even get people to visit me here to prove it to them.”

Williamsburg it is not, but then, neither is Williamsburg anymore. And starving artist aesthetic be damned, the young and hungry would be better advised to find a place near the fat cats of the Upper East Side, where the rents are cheaper, provided you steer clear of the tony avenues near the park. The Upper East Side may well be one of the last outposts of old Manhattan that the young in Manhattan can actually afford. Besides, it’s the neighborhood that everyone who lives in Astoria brags they can see from their rooftops.

Auction house

ON A RECENT warm Saturday night, Second Avenue was filled with the young and old and not many people in between. Prosperous-looking older couples sipped white wine at the outdoor tables, looking tolerantly at the tides of teenagers drifting by, the girls clutching each other in the tipsy, excited way that made drunkenness seem almost sweet, like a kitten tangled in a ball of yarn.

It turned out all the in-betweens were hiding in Auction House, a comfortable bar on 89th Street. Inside, people chatted quietly on plush red velvet Victorian couches, relaxing under the gaze of somewhat naughty old-fashioned oil paintings in gilt frames.

Almost like Brooklyn, but there were no Urban Outfitted-collegiates (talk about exclusive: there’s a 25-and-older policy on Friday and Saturday nights), no taxidermy on the walls (in fact, the owner, a longtime vegetarian, has a no fur policy) and the bartender was refreshingly clean-shaven.

Auction House dates back to 1992—the year that New York magazine ran a Williamsburg cover story, calling it “The New Bohemia.”

“Back then, having antique furniture was really unique,” said owner Johnny Barounis, who also owns the Back Room on the Lower East Side. “At the time, I thought, ‘The style has been around for 100 years. It’s not going anywhere anytime soon.’”

A little something like the Upper East Side, maybe?

“I think it’s coming back. It’s very cyclical. I’ve been seeing an artsier crowd coming in to the bar. Back in the 1970s, it was a really cool place, there were clubs and it used to be fun to hang out up there,” said Mr. Barounis, who blamed the cabaret laws for killing the area’s nightlife.

Don’t believe it? Remember: Andy Warhol lived in a townhouse on Lexington and 89th between 1959 and 1974 in what is regarded as the first Warhol factory—it’s where he painted his soup cans. (Warhol, apparently unafraid of the negative stereotypes, moved in his mother and had 25 cats named Sam in the house).

This is where Joan Didion, “that consummate bard of cool,” spent much of her 20s living and roaming, drinking early in the mornings and pondering the “monochromatic flatness of Second Avenue, the fire escapes and the grilled storefronts peculiar and empty in their perspective.” Where writers and filmmakers like Woody Allen gathered to see and be seen at the nightly salon that was Elaine’s—a place where, as Jay McInerney told The Guardian, “You’d go to drink, have fights and make out with someone’s girlfriend in the bathroom.”

Mr. Barounis grew up in Queens and started out in the nightlife and entertainment business by working as a “pick and choose guy” at clubs. He’s lived in Manhattan for the past 30 years—he’s seen every variety of cool.  “I always thought cool was an intrinsic quality. I’ve had kids tell me, ‘I don’t hang out above 14th Street,” he laughed. “Hey, you’re from Columbus, Ohio, and you’re telling me about cool? I find that comical.”

And Mr. Barounis is not alone. Among the desirable establishments, new and old, in the neighborhood are breweries like Jones Wood Foundry and City Swiggers, the Lexington Candy Shop luncheonette, JG Melon, and on the upper edges of Lexington and Park, ABV, Earl and the Guthrie Inn. There’s also the 75-year-old butcher shop Schaller & Weber (which is keeping its head above water during subway construction thanks to orders from the beer gardens and artisanal-food-obsessed denizens of Queens and Brooklyn who would never dream of living on the Upper East Side). The newest addition is the Pony Bar, a popular Hell’s Kitchen craft-beer bar that opened its second spot yesterday on First and 75th.

“I think people will say, ‘I’m paying this for Jersey City and I could be paying the same thing for the Upper East Side?’” Mr. Barounis opined. “There’s a value up here if you can get over the stigma.”

Your New Neighbor? (ThomasThomas, flickr)

WITH ITS REPUTATION for stuffiness and snootiness, the Upper East Side may not be the most obvious frontier of affordability, but it is one of the few left in Manhattan (alongside Manhattan Valley and Harlem, Washington Heights and Inwood), and it’s also surprisingly young, with 36.4 percent of its population between 20 and 39.

Between Lexington and the East River, 59th to 99th Streets, the median rent for a studio apartment is $1,900 (median size of 500 square feet), according to data from StreetEasy.com. In Williamsburg, the median studio is going for $2,800 a month, although it will get you a slightly larger space of 602 square feet. (More expensive even than the East Village, where the median studio runs $1,940, with a median size of 452 square feet).

With rents in the city hitting record highs—last month, the average monthly rental for a Manhattan studio was $2,025, a 3 percent increase from the year before, according to Citi Habitats—rental brokers are increasingly advising those without trust funds to consider a place that is seen as the traditional stomping ground of those with trust funds.

“Young people say, ‘I need to live in Union Square for $1,200 a month,’ and that’s just not going to happen,” said Mark Menendez, the director of rentals at Prudential Douglas Elliman. “For a while that alternative neighborhood was Williamsburg, but we’ve actually had transplants back to Manhattan because they’ve been priced out of Williamsburg.

Where does one go? “You can still find good value on the Upper East Side,” Mr. Menendez said.

It’s not that the Upper East Side is some vast, empty expanse waiting to be populated (neither is any other place in New York)—Community Board 8 presides over some of the most densely-packed space in the city. But unlike historically industrial neighborhoods like Soho or the Meatpacking District, it has a lot of units in a wide variety of housing types.

The downtown housing stock is simply not as robust, said Citi Habitats president Gary Malin. “People might not want to live on the Upper East Side, they don’t think it’s cool or young or hip. But if you want to live in the West Village, it’s expensive."

It also helps that for years, the far East side was snubbed because of the lack of train lines east of Lexington, a fact that almost seems quaint given the increasingly “acceptable” treks of outer borough residents.

In fact, cost has been driving creative, penurious types to Yorkville for decades. Linda Rizutto, the owner of the very Villagey coffee shop Java Girl on E. 66^th Street, moved to the neighborhood some 30 years ago.

“I would have preferred living in the Village, but it was cheaper to live up here,” said Ms. Rizutto. She turned briefly wistful, musing on what Soho was like before it became like an outdoor shopping mall, then shrugged. “This is my home home now."

And although on average the Upper East Side is among the wealthiest neighborhoods in the city (an average twisted out of proportion by the spectacular wealth of Fifth and Park and Madison Avenues), it’s also more socially and economically-diverse than anyone gives it credit for, and has been for a long time.

Hunter Armstrong, the director of local group Civitas noted that there are hundreds of thousands of people living on the Upper East Side.

“There’s not one prevailing character, it’s so diverse,” said Mr. Armstrong. “There’s every kind of person.”

Still, it can be a hard sell.

Citi Habitats broker Morgan Turkewitz persuaded two clients, who happened to be friends, to consider moving Uptown. “If that was the first apartment that we went into and they liked it, I knew they’d say, ‘O.K., but what about Downtown?’” said Ms. Turkewitz. “So, I waited until they saw Downtown and got frustrated with it, then I took them to the Upper East Side.” They wound up in a two-bedroom apartment on 60th Street between First and Second Avenues for just under $2,000.

Ms. Turkewitz's client Kathleen Clark, who graduated from the University of Delaware in 2009, admits that she didn’t look at the Upper East Side and think Oh, that’s my ideal neighborhood. But the other apartments she saw just couldn’t compare to the small, but charming and newly-renovated two-bedroom in a fourth-floor walkup with stainless steel fixtures and granite countertops.

“I love some places in the West Village and Gramercy, but that’s sort of a dream,” said Ms. Clark, who works as a designer at Levi’s. “As much as you want to be hip and live on the Lower East Side, you can’t afford it on a base salary.”

Asked if she had considered Brooklyn, Ms. Clark said that she was sure she would love the vintage shopping and the beer gardens if she lived there, but it wasn’t great for her commute.“And that’s why I came here—for my work.”

Not that she’s been able to convince any of her friends to take up residence.

“Once people are set on not wanting to live on the Upper East Side, they do pretty much all they can to try to find an apartment somewhere else,” she said. “It has kind of a bad rap. I think it might be the most uncool neighborhood in Manhattan.”

Nor are all of its residents converts.

“Young people don’t want to live here, but they end up getting funneled in,” said Matthew Smith, a Yale law student who looked at more than 30 apartments before settling on his current place, a spacious one-bedroom with exposed brick on 93rd Street between First and Second Avenues that costs $1,500 a month.

“I would rather be in Hell’s Kitchen, there’s a lot more going on,” Mr. Smith admitted, noting that Yorkville could be kind of “frat-tastic.” But while his friends’ Hell’s Kitchen rent had gone up by $400 last year, his had gone up just by the price of inflation.

Even though he’d seen more young people moving Uptown, he didn’t think that the neighborhood would be transformed by waves of hipsters desperate to remain in Manhattan. Not that Greenpoint or Bushwick are all that cheap anymore, but the next place, wherever it was, would be.

A muck house: pretty gritty (Hobo Matt, flickr)

SAFE. QUIET. CONVENIENT. AFFORDABLE. The descriptions came up again and again in conversations with younger residents, who were always eager to point out these excellent, but oddly parental praises. Then, they would let something slip. Actually, they loved that the Met was open until 9 p.m. on Friday and Saturdays and was admission by donation. It was one of the most democratic institutions in the city, when they thought about it. (Why trudge out to some gallery in Bushwick for mediocre art when you can see the best in the world in your own neighborhood?). Or they really liked Cascabel Tacos, the place that serves street-food style Mexican on Second Avenue, or reading the paper at a coffee ship like Little Brown, or a great piano bar that their friend always took them to with the weirdest mix of people, or the inventive programming at the Museum of the City of New York.

And at least the Upper East Side used to be a place people dreamed of moving. Does anyone dream of moving to Queens, Hoboken or Jersey City?

Perhaps the best argument for the Upper East Side’s rise is that its inevitable fall is already looming on the horizon in the specter of the Second Avenue subway, sure to drive up property values. Besides, for the time being, for those obsessed with the old, gritty New York, what’s grittier than displaced rats and muck houses?

Why not get in while the getting is good—especially if you moved to New York to get out in the first place?

“Who comes to New York to just hang out in one neighborhood anyway?” asked Tiffany Sakato, who lives in a one-bedroom on 86th and Second Avenue (rent is about $1,600). Spending all your time eating, sleeping, socializing and working in one place? Wasn’t that the kind of provincialism people came to New York to escape?

Ms. Sakato liked her apartment she assured us, the neighborhood, the price, but really, in the end, “it’s just a place where you can put your head down and get ready for the next day.”

“I really like exploring the city,” she explained. “Most of the time, you’re out and about, not sitting at home. That’s why you move to New York.”

kvelsey@observer.com