Data & Research City Roundup Detroit Seattle

09.26.2018 | Updated on 12.10.2018 | 3 Minute Read | By Brian Carberry

Wait…what?

The same Detroit that just a few years ago filed for bankruptcy is a less affordable place to live than Seattle – home of Starbucks and Amazon?

You better believe it.

Rent.com wanted to explore how much of your take-home paycheck would go towards paying rent in each of the country’s 25 most populated cities – assuming you are making the median city income and paying the median rental prices.

Some of the findings surprised even us.

Rent in Detroit takes a bigger bite out of your paycheck compared to Seattle

rundown house in detroit

This was probably the one data point that caught our attention the most. At first glance, it doesn’t seem possible. After all, the median one-bedroom rental in Seattle is nearly $2,000 a month while rates in Detroit are hovering around $780.

However, when you consider the median annual income in each city, the average worker in Detroit is barely cracking $22,000 after taxes. That means 42 percent of that paycheck is being used for rent, where workers in Seattle are bringing home $63,600 each year – of which 38 percent goes to rent.

Fun fact: Detroit is also less affordable than Chicago and Denver.

It’s virtually impossible to live in New York or Boston

New York housing

Photo by Patrick Tomasso on Unsplash

Ok, this might not be as much of a surprise.

It’s no secret that New York and Boston are notorious for astronomical rental prices, unless you’re lucky enough to inherit a rent-controlled unit (we see you, Monica and Rachel from Friends). But what did surprise us was just how much of your net income you’d need to spend on rent in these cities.

In New York, you’ll need to pay 121 percent of your income just to afford your rent. So unless you have a lucrative side hustle, you’re stuck in a less-than-desirable place in the outer boroughs or Jersey.

Boston isn’t much better, where 79 percent of the average worker’s take-home pay needs to be used for rent.

Fun fact: Experts agree that we should be spending no more than 50 percent of our take-home pay on housing, utilities, groceries and transportation.

San Francisco is more affordable than Los Angeles

San Francisco

Photo by Aaron Kato on Unsplash

While both of these California cities require a huge chunk of your paycheck to live, we discovered it’s actually a little bit more affordable to live in San Francisco compared to Los Angeles.

Just like the scenario involving Seattle and Detroit, rental rates in San Francisco are noticeably higher, but so is the median take-home pay. Do the math, and it turns out 63 percent of pay in the Golden Gate City goes to rent compared to 73 percent in LA.

Fun fact: According to the U.S. Census Bureau, there are about 3 million more people living in Los Angeles than San Francisco.

Washington D.C. is more affordable than Philadelphia

Washington DC

Photo by Alexey Topolyanskiy on Unsplash

This is yet another example of a larger median income impacting affordability. Workers in Washington D.C. bring home more than $53,000 each year – that’s about $20,000 more than their neighbors just a few hours up I-95.

As a result, renters in the District spend 47 percent of their income on rent compared to 49 percent in Philadelphia, which means less money left over for cheesesteaks.

Fun fact: Philadelphia and Washington D.C. are both less affordable than San Jose, which is in the heart of Silicon Valley – a region known for exorbitant housing and rental prices.

Everything’s bigger in Texas … except for rent prices

El Paso

Photo by M Angie Salazar on Unsplash

Of the 25 cities on our list, the three most affordable based on our logic are all in the Lone Star State.

In Austin, only 24 percent of income goes to rent. It’s even better in Fort Worth at 23 percent. And coming in as the most affordable city is on our list: El Paso, where the average renter only needs to use 21 percent of their net pay for their apartments.

Fun fact: There’s no state income tax in Texas – so every dollar in that paycheck goes just a little bit further.

Our Methodology

Rent.com took the median household income from the U.S. Census Bureau for the 25 most populated cities in the country and used an ADP salary paycheck calculator to determine the median net income with standard withholdings and no deductions. We then compared this figure to RentPath data of median rental rates for a one-bedroom property in each specific city to determine the percentage of your median monthly pay that will go towards the minimum median rent.

The following table shows how each of the country’s largest cities are ranked by percentage of net income that needs to be used for rent.

Rank City, State Net Income* Median 1BR Rent** Percent of Paycheck for Rent
1 New York, NY $43,230 $4,364 121%
2 Boston, MA $46,489 $3,048 79%
3 Los Angeles, CA $40,342 $2,440 73%
4 San Francisco, CA $69,231 $3,663 63%
5 Philadelphia, PA $32,641 $1,320 49%
6 Washington D.C. $53,175 $2,095 47%
7 San Diego, CA $50,475 $1,956 46%
8 San Jose, CA $68,168 $2,432 43%
9 Detroit, MI $22,018 $779 42%
9 Chicago, IL $39,540 $1,395 42%
11 Denver, CO $45,139 $1,507 40%
12 Seattle, WA $63,600 $1,995 38%
13 Baltimore, MD $36,031 $1,005 33%
14 Dallas, TX $38,110 $1,026 32%
15 Houston, TX $38,497 $905 28%
16 Phoenix, AZ $40,094 $889 27%
17 Charlotte, NC $44,874 $982 26%
17 Memphis, TN $31,831 $684 26%
17 San Antonio, TX $39,535 $841 26%
20 Jacksonville, FL $40,963 $869 25%
20 Columbus, OH $38,394 $806 25%
20 Indianapolis, IN $34,820 $726 25%
23 Austin, TX $51,796 $1,057 24%
24 Fort Worth, TX $44,572 $867 23%
25 El Paso, TX $35,266 $625 21%
*Source: 2016 figures from U.S. Census Bureau, after taxes with standard withholding and no deductions
**Source: RentPath internal data of median one-bedroom apartment rental prices, August 2018.
The rent information included in this article is based on current rental property inventory on ApartmentGuide.com and rent.com and is used for illustrative purposes only. The data contained herein do not constitute financial advice or a pricing guarantee for any apartment.
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