[FoRK] The U.S. Cities With the Most Leftover to Spend ... After Paying for Housing

Stephen Williams sdw at lig.net
Fri Dec 23 11:01:16 PST 2011


  The U.S. Cities With the Most Leftover to Spend ... After Paying for Housing

  * Richard Florida <http://www.theatlanticcities.com/authors/richard-florida/>

The comments on my recent post on America's most economically advantaged metros 
<http://www.theatlanticcities.com/jobs-and-economy/2011/12/us-cities-most-leftover-to-spend/351/> got me thinking.

A number of folks brought up the issue of cost of living. "Does your index take into account the high cost of living in some of 
the metro areas that top this list," one commenter asked. "The amount of money people have to buy presents is diminished when 
they're paying over a third of their income on housing."

In many cases, it is a quite a bit more than that. With the help of Charlotta Mellander, I took a look at the amount of money 
people in different cities have left over after they paid for housing. For comparison purposes, Mellander used the most current 
(2010) average wage and salary figures from the Bureau of Labor Statistics and compared them to the figures on average monthly 
expenditures on housing from the American Community Survey (2009).

The variation across metros is huge. In cities at the top of the economically advantaged list, the average person has between 
$3,500 and nearly $4,000 left at the end of each month after paying for housing. That amounts to between $42,000 and $48,000 per 
year— or roughly as much as the average wage or salary ($44,110) across all metros. Compare that to the $15,000 to $18,000 left 
over in the lowest ranking metro, a gap of some $30,000 dollars.

The table below lists the 20 metros with the most money left over after paying for housing:

*Rank* 	*Metro Area* 	*Average Remaining Wages and Salaries (Per Month/Per Year)*
1. 	San Jose-Sunnyvale-Santa Clara, CA 	$3,901/ $46,812
2. 	Durham, NC 	$3,513/ $42,156
3. 	Washington-Arlington-Alexandria, DC-VA 	$3,441/ $41,292
4. 	San Francisco-Oakland-Fremont, CA 	$3,342/ $40,104
5. 	Trenton-Ewing, NJ 	$3,270/ $39,240
6. 	Huntsville, AL 	$3,258/ $39,096
7. 	Boston-Cambridge-Quincy, MA-NH 	$3,218/ $38,616
8. 	New York-Northern New Jersey-Long Island, NY-NJ 	$3,209/ $38,508
9. 	Boulder, CO 	$3,181/ $38,172
10. 	Kennewick-Pasco-Richland, WA 	$3,117/ $37,404
11. 	Hartford-West Hartford-East Hartford, CT 	$3,116/ $37,392
12. 	Bridgeport-Stamford-Norwalk, CT 	$3,098/ $37,176
13. 	Seattle-Tacoma-Bellevue, WA 	$3,082/ $36,984
14. 	Rochester, MN 	$3,037/ $36,444
15. 	Corvallis, OR 	$3,019/ $36,228
16. 	Anchorage, AK 	$2,969/ $35,628
17. 	Ann Arbor, MI 	$2,937/ $35,244
18. 	New Haven-Milford, CT 	$2,929/ $35,148
19. 	Champaign-Urbana, IL 	$2,925/ $35,100
20. 	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 	$2,923/ $35,076

With just a few exceptions, the places at the top of this list have among the most expensive housing in the country. But average 
wages and salaries are substantially higher, enabling them to more than compensate.

Topping the list is the San Jose metro area, where the average resident has nearly $4,000 a month ($3,901)—or $46,812 per 
year—left over after paying for housing. Durham, North Carolina (with $3,513 per month), is next followed by greater Washington, 
D.C. ($3,431), and greater San Francisco ($3,342). Pricey metros such as New York, Boston, Seattle, Philadelphia, and Denver 
also number among the top 25.

College towns like Boulder, Corvallis, Ann Arbor, Champaign-Urbana, and Ithaca also do quite well, although it's worth noting 
that one college town, State College, Pa., is near the very bottom of the list.

Then, there are some surprises. People in greater Detroit, Pittsburgh, Milwaukee, Syracuse, Buffalo, and Rochester have a 
substantial amount of money left over after their housing is paid for; more than their counterparts in San Diego or Raleigh.

The scattergraph above provides some perspective, plotting the wages left over after housing against median housing costs. The 
metros above the line (hover over the dots to see their names)—mainly high wage metros like San Jose, San Francisco and greater 
Washington, D.C., as well as Durham, Huntsville and a variety of others—have a high level of wages left over after housing is 
paid for.  Those below the line—which interestingly enough includes a number of resort towns and vacation spots like Naples, 
Fla., Honolulu and Las Vegas—have relatively little left over once housing costs are taken into account.

To get at the factors that might be associated with having more money left over, Mellander compared this metric to key social, 
economic and demographic characteristics of metros. Of course, I hasten to note that correlation does not mean causation. But 
there are some interesting relationships.

One key factor is the level of knowledge-based occupations. The correlation between the percent of workers in knowledge-based, 
creative occupations and the amount of money left over after paying for housing is considerable (.75), as is the correlation to 
college grads (.53). Metros where people have more money left over after paying for housing also have higher concentrations of 
high-tech industry (.56) and a higher rate of innovation (.45). Having more money left over is also more likely in larger cities 
and metros (with a correlation of .43). Most of all having more money left over after paying for housing is much more likely in 
metros that are more affluent to begin with (with correlations of .6 to income, .63 to economic output per capita, and .85 to 
average wages).

While there are certainly exceptions to the rule, when all is said and done, people are still generally better off in larger, 
more tech and knowledge-based metros, even when the higher cost of housing there is taken into account.

Keywords: San Francisco <http://www.theatlanticcities.com/hubs/san-francisco/>, San Jose 
<http://www.theatlanticcities.com/hubs/san-jose/>, Washington, DC <http://www.theatlanticcities.com/hubs/washington-dc/>, 
Housing Prices <http://www.theatlanticcities.com/topics/housing-prices/>, Forever Renter 

Richard Florida is Senior Editor at /The Atlantic/ and Director of the Martin Prosperity Institute at the University of 
Toronto's Rotman School of Management. He is a frequent speaker to communities, business and professional organizations, and 
founder of the Creative Class Group, whose current client list can be found here 

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