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
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.
It’s virtually impossible to live in New York or Boston
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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
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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
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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
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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.
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%
|3||Los Angeles, CA||$40,342||$2,440||73%
|4||San Francisco, CA||$69,231||$3,663||63%
|7||San Diego, CA||$50,475||$1,956||46%
|8||San Jose, CA||$68,168||$2,432||43%
|17||San Antonio, TX||$39,535||$841||26%
|24||Fort Worth, TX||$44,572||$867||23%
|25||El Paso, TX||$35,266||$625||21%