Friday, October 11, 2013
It difficult to overemphasize just how expensive it is to live in places like New York and San Francisco. The Atlantic Cities Blog looks at the toll this takes on the middle class:
High-cost cities tend to have higher median incomes, which leads to the simple heuristic that, sure, it's costlier to live in San Francisco than in Akron, but the people who pay bills there make enough money that they can afford it.
In reality, yes, the median household income in metropolitan San Francisco is higher than it is in Akron (by about $30,000). But that smaller income will buy you much, much more in Ohio. To be more specific, if you make the median income in Akron – a good proxy for a spot in the local middle class – 86 percent of the homes on the market there this month are likely within your budget.
If you're middle-class in San Francisco, on the other hand, that figure is just 14 percent. Your money will buy you no more than 1,000 square feet on average. That property likely isn't located where you'd like to live. [. . .] To frame this another way, the median income in metro San Francisco is about 60 percent higher than it is in Akron. But the median for-sale housing price per square foot today is about 700 percent higher.
The gulf between those two numbers means that the most expensive U.S. cities aren't just unaffordable for the average American middle-class family; they're unaffordable to the relatively well-off middle class by local standards, too.
Many commentators have pointed out that the culprit here is zoning regulations that are criminally restrictive. In places like San Francisco and Washington, D.C.--where there are lots of high paying jobs and people want to live--the buildings need to be taller to accommodate far more housing units and increase density.