How Does Your Region Rank in Expense / Living Costs?

The United States is a big place, with different regions having dramatically different costs of living. The most visible reason for these differences is home prices, but it doesn’t tell the whole story. You might be surprised to find that some of the most expensive parts of the country are that way mainly because of high transportation costs, as determined by the Center for Housing Policy and the Center for Neighborhood Technology.

When it comes to moderate income households, the most expensive place to live isn’t New York City; it’s Miami, Florida. Most middle class families in Miami spend over 65% of their income on transportation and housing costs combined. Even though NYC has higher home prices, transportation in the big apple is so cheap that it doesn’t even make it to the list of the top ten most expensive cities for the middle class. With housing costs at 40% of income and transportation at 32%, Miami is definitely one of the most expensive places in the country anyone can live, even if its energy costs are around the average for the United States.

Next up is Riverside, California, with housing costs at 36%, transportation costs at 33%, and energy costs at almost the top of the charts. Surprisingly, Riverside’s housing costs actually rival that of New York City in terms of a percentage of middle class income. Although NYC has higher real estate prices in terms of dollars, the average middle class income in that city is so high that it more than makes up for this difference.

Coming in third place is Tampa, Florida. Their housing costs come in at 31% of income, which is high, but not overly so. However, their transportation costs are a full 35% of income, which puts them well above most expensive cities. Although electricity costs are average in Florida, Tampa nevertheless remains as the third most expensive city in America for moderate income households.

New York City has already been mentioned several times here, and for good reason: its real estate prices are the highest in the nation. Yet cities like NYC, San Francisco, and Boston have transportation costs that are so cheap that it more than makes up for their expensive real estate. These three cities are among the most affordable cities in the United States for moderate income households, even though NYC’s housing costs as a percentage of income is a full 34%. Even after adjusting for income, this extreme housing expenditure would put NYC in the top five most expensive cities, but housing is not the entire picture. Not only do NYC residents make more money, but they have nearly the cheapest transportation costs of any city in the country.

Behind all of these numbers lie energy costs. Electricity prices differ widely by region, with Hawaii consistently over $.24/kWh and high prices stagnant throughout New England and California. Energy is cheapest mostly in the north, in states like Washington, Idaho, and North Dakota. The South generally has middling rates, though some companies like do a very good job of bucking the trend and providing low cost electricity in the South.

The bottom line here is that real estate prices alone do not tell the whole story when it comes to expense. When comparing where you live to other parts of the country, be sure to take into account transportation and energy costs as well.

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