
The Places in America Where Most Income Goes to Rent - aberoham
https://priceonomics.com/the-places-in-america-where-all-your-salary-goes/
======
Jormundir
I'm genuinely curious why they bothered publishing this in its current state.
They don't make tax calculations, so they assume you're paying rent with
untaxed income, which makes the comparison all but meaningless.

~~~
drngdds
They also weirdly assume you have a 2BR on a single income, which is not the
norm.

~~~
gumby
Is it not the norm? It certainly was until quite recently.

A young family with one breadwinner and a couple of small kids might
reasonably want to live in a 2BR, in many countries not just USA.

~~~
alkonaut
> A young family with one breadwinner

That norm is quickly going out of style at least

~~~
yomly
How much of that is influenced by economic necessity?

My wife would love nothing more than to raise the kids but making ends meet is
proving a tough tradeoff

~~~
alkonaut
Unsure. But equality is one factor. At least where I live women outnumber men
at universities - meaning that if one partner in the relation has an
"important career", it's very soon going to be more often the mother.

Another factor is rents and house prices. If everyone you are competing with
for that house can pay the mortgage on two incomes, you aren't going to afford
it on one. So that's economic necessity I guess.

~~~
rhapsodic
_> At least where I live women outnumber men at universities - meaning that if
one partner in the relation has an "important career", it's very soon going to
be more often the mother._

You can't logically conclude that based on that one data point.

~~~
panda888888
College enrollment at all schools across the US (both 2 year and 4 year) is
~56% women, if I did the math right. Source:
[https://nces.ed.gov/programs/digest/d16/tables/dt16_303.70.a...](https://nces.ed.gov/programs/digest/d16/tables/dt16_303.70.asp)

~~~
user5994461
Women go less into STEM and higher income domains, compared to men. They have
more degrees in aggregate but it's a higher proportion of "worthless" degrees.
It is not meaningful to predict income.

------
edbaskerville
The analysis comparing cities is just (mean salary - mean rent), which is
going to make places with high income inequality look better than they are for
most people.

I'd like to see the 10%, 50% (median), and 90% quantiles for (after-tax salary
- housing cost). I bet the rankings would be quite different depending on
which of these you chose.

~~~
carbocation
Absolutely this.

We know that income is generally power-law distributed, so we also know that
the majority of incomes will be below the mean. An analysis like this is
bordering on nonsensical. It's too sensitive to outliers to be useful, in my
opinion.

A worked example: the median income per capita in Boston is $37,288[1] and
there are 685,094 residents. The total income of people in Boston is then
685094*$37288 = $25,545,785,072. According to [2], Tim Cook's total
compensation was $377 million in 2013. If Tim Cook moved to Boston, the mean
per capita income would rise from $37,288 to
((25545785072+377000000)/(685094+1)) = $37,838. One person moving can make a
2% difference in mean income by moving to a top 25 city in the US, nevermind
any of the smaller cities on that list.

1 =
[https://www.census.gov/quickfacts/fact/table/bostoncitymassa...](https://www.census.gov/quickfacts/fact/table/bostoncitymassachusetts/IPE120216)

2 = [https://www.therichest.com/rich-list/world/top-10-people-
wit...](https://www.therichest.com/rich-list/world/top-10-people-with-the-
highest-salaries-in-the-world/)

~~~
asah
FWIW they mentioned the highest salary was $187k

------
Woofles
I think Minneapolis is an interesting data point on there, since I've been
told (and the data here reflects) that housing in Minneapolis is on par with
Chicago right now, but the salaries haven't caught up. Minneapolis ranks as
one of the worst Annual Salary After Rent cities, even behind LA and Seattle,
which comes as a surprise.

Also one thing I've found as I work through a move from an expensive city (SF)
to a less expensive one (Minneapolis) is that the things you're getting for
the prices shown here are drastically different. I've found 1500sqft 2br/2ba
apartments with two parking spots in the Twin Cities for $2300, while that
same thing in SF would easily cost $7000. I paid $4500 for a 2br/1ba that was
a little under 1000sqft with a single parking space.

~~~
zdragnar
Tech salaries in Minneapolis and the surrounding area aren't terrible if
you're reasonably qualified and do some digging- think low $100k and up. The
rents seem absurd to me- $1300 for a one bedroom apartment? - but that's
because I grew up in a town where a two bedroom apartment above a quiet store
would cost $450 a month, tops.

~~~
2trill2spill
$1300 for a one bedroom apartment? I'm paying $1360 for a two bedroom and I'm
in the heart of Uptown in a nice apartment.

~~~
zdragnar
Yeah, I think it was near the twins stadium, and was brand new, so it was
probably inflated a bit compared to what you would get if you looked around.

Regardless, I now have a 2k mortgage for multiple acres, waterfront, and no
congestion, city noise, smells or lights. It's bliss if you don't mind the
occasional snake or bear.

------
pmiller2
Really surprised to see Detroit that high on the list. I kind of wonder what
the relative availability of jobs in Detroit is vs, say, Dallas or Chicago
(which offer some significant lifestyle advantages over Detroit). It would
also have been a much better comparison if some approximation of state and
local income taxes were factored in.

~~~
saturdaysaint
A booster's 2 cents:

Yes, Texas's lack of income tax (and Detroit's _city_ income tax) would
certainly catapult Dallas ahead of Detroit on this list if taxes were properly
factored in.

Detroit is sort of a well-known "sleeper" city that "might be nice to live in
someday", but I think word will get out sooner than later that it's got a lot
of livability advantages right now. Great arts/food/drink scenes, 4 major
sports teams, a surplus of cheap, high quality housing, a first class research
university in close proximity, and mild traffic that's about what you'd expect
in a city with a AAA baseball team. It has it's flaws, but I'm really not
familiar with anywhere else that offers a lot of those amenities without hell
traffic or impossibly expensive housing (usually both).

Unless global warming radically reverses, I'd even make the argument that
Detroit's weather is becoming a draw - a mild winter is a small price to pay
for breezy summers with highs in the low 80's.

~~~
pmiller2
I used to live pretty near Detroit, and, honestly, most of those things don't
ring true to me. As far as housing goes, if you work in Detroit, you can
easily live in between Detroit and Ann Arbor and get a much better deal on
housing. Speaking of Ann Arbor, why not just live there, if proximity to the
university is important? And I'm not sure how you can count the Lions as a
"major sports team." ;) (kidding on that one.)

I can't really comment much on the current culture and food scene in Detroit,
but I don't recall it being all that great when I was there.

The weather must be significantly different now than when I was there.
Michigan was hot and extremely humid in the summers (which makes sense for a
state that literally has 11,000 lakes, not to mention the Great Lakes), and
the winters bitter cold and snowy for the most part.

~~~
fetus8
As someone who grew up in Michigan, left, and visits familiy regularly
throughout the year...I can't imagine anyone thinking the weather is
desirable. Like pmiller2 said, summers are humid af, 80-90%, on a regular
basis with 80-95 temps just isn't enjoyable.

The winters are rather cold, with quite a lot of snow and gray skies for
months. Winter bleeds so far into spring. I remember years as a kid, where
we'd get a foot of snow in Mid April. We lived just outside Metro Detroit, and
I grew up there in the 90's/Early 00's...

~~~
pmiller2
While in Michigan, over a period of years, I saw snow come out of the sky in
literally every month except July. Granted, sometimes it did not stick, but
that's saying something. I've seen those giant piles of snow in huge parking
lots still melting well into summer.

~~~
fetus8
I remember those giant piles of snow, fading to black over the course of
months, while never seeming to melt until well into summer.

What a gross and weird sight.

------
DavidHm
The confluence or random circumstance and intentional lobbying that have
allowed SF area landlords to ensure that a low stock of housing is maintained
in the face of skyrocketing demand is truly fascinating.

~~~
komali2
Everything always seems behind. When I lived in mountain view, local papers
were full of old school residents complaining about nearly finished new
housing on Castro that a bunch of googlers would move into. Like... The time
to preserve your small town setting passed about 20 years ago lol. It's no
longer apricot field town, it's silicon valley, it's staying silicon valley.
Why not profit off the rising land values?

~~~
wahern
But Silicon Valley was already dead 25 years ago!

[https://groups.google.com/forum/#!original/alt.folklore.comp...](https://groups.google.com/forum/#!original/alt.folklore.computers/bvE0Ka5nCnM/NAIOQnrEyCAJ)

    
    
      Newsgroups: alt.folklore.computers
      Path: sparky!uunet!stanford.edu!nntp.Stanford.EDU!abercrombie.Stanford.EDU!paulf
      From: pa...@abercrombie.Stanford.EDU (Paul Flaherty)
      Subject: Re: Sillycon Valley history
      Message-ID: <paulf.731874319@abercrombie.Stanford.EDU>
      Sender: ne...@leland.Stanford.EDU (Mr News)
      Organization: DSO, Stanford University
      References: <C3p1B1.EDE@csulb.edu>
      Date: 11 Mar 93 18:25:19 GMT
      Lines: 20
      
      dpa...@csulb.edu (Dave Palmer) writes:
      >From what I understand, the shine is rubbing off. The cost of housing is
      >ludicrous, and companies are fleeing to places like Arizona. But you
      >still can't throw a silicon wafer in Cupertino without hitting an Apple
      >facility.
      
      I think it's fair to say that Silicon Valley is dead.  Cheap venture capital,
      minimal startup cost, access to university researchers, and good inter
      business communications fueled an engine which turned ideas into products.
      You can now find venture capital elsewhere, with the discount rate being
      what it is.  The cost of housing and office space has spiraled out of
      control, thanks to the environmentalists and Prop 13.  The trade secrets
      and intellectual property mania have pretty much destroyed open cooperation.
      The universities remain, but aren't the driving force they used to be.
      
      The place has a much different, more ossified feel to it than it did seven
      years ago.
      
      -=Paul Flaherty, N9FZX | "My boy, we are pilgrims in an unholy land."
      ->pa...@Stanford.EDU   |                                -- Dr. Henry Jones Sr.

~~~
bobaccount
And then that guy invented AltaVista, in Silicon Valley:
[https://en.m.wikipedia.org/wiki/Paul_Flaherty](https://en.m.wikipedia.org/wiki/Paul_Flaherty)

------
loeg
Where the heck do they get $2800 for a 2BR in Seattle from? That seems high to
me. A year ago I was renting a 3BR for $2100.

Well, ok, "average" across all 2BR in the city. That doesn't really tell the
full story and will be drawn up by high outliers.

There are a lot of methodology problems here.

~~~
pmiller2
I'm interested to know how one could arrive at a more reasonable number for a
2br apartment. Obviously, what you say is true: a luxury 2 BR with a doorman,
gym, pool, onsite parking, and pets allowed is going to be vastly more
expensive than your basic 2BR with none of that included. How do you tease
them apart?

~~~
occamrazor
The easiest way is taking the median instead of the mean. For more info and
other methods, search for “robust estimators”.

~~~
pmiller2
I guess I wasn't clear enough. Using the median certainly works better if
you're looking at the population of "all 2BR apartments." But, I would contend
that's a mistake, as luxury apartments are really fundamentally different from
non-luxury apartments. And, among luxury apartments, individual amenities
matter. A pool is likely to be less relevant than a doorman, for instance.

Statistically, I don't see any good way around this other than doing a really
gnarly ANOVA to tease out the prices of individual amenities.

~~~
loeg
2BR just happens to be the category the article chose. It's a reasonable
assumption that e.g. families with a kid are going to rent at least a 2BR — of
any age and luxury — if they can afford to.

------
zebrafish
Interesting how many of the salaries in these samples are tied to college
towns. Cambridge, College Station, Knoxville, & Chapel Hill just to name a few
that I saw.

~~~
patwolf
In the case of Chapel Hill (and I'm sure others as well), it's a bit odd to
see it singled out when it's really part of a larger metropolitan area.

If I were living in Chapel Hill, I could also be reasonably working in Raleigh
or Durham.

------
dawhizkid
70% of rentable units in San Francisco are rent-controlled. I know many very
high paid people who pay well below “market rate” for their apartments. If you
do it right you can live in SF for less than many “cheaper” cities and yet
make much more money.

~~~
dionidium
How do you "do it right?"

~~~
bvc35
Make sure you already live in San Francisco and use the government to cap out
your rent to the detriment of literally everyone else.

~~~
ironjunkie
Exactly.

Use the laws supposedly made for poor people, and use them at your advantage
(like most of the wealthy do).

Also yell and pretend high and clear that you want to help the poor.

------
iooi
The rents look a bit off, $3,700 is not the average 2BR apartment in NYC. Same
for Miami, $2,400 is way too low. Maybe they're including too many apartments
in the outer areas of these cities, but if you want to keep your commute <30
minutes in the cities, NYC would be closer to 4.5k and Miami would be hitting
3k.

------
mabbo
This list makes me very surprised that Amazon dropped Detroit, MI from the
finalists on their HQ2 search. Rent there is half of what it is in Seattle. A
few AMZN shares would go a lot further to keeping people happy in Detroit than
in many other cities.

Detroit has a bad reputation because their economy failed. But put 50,000 high
paying tech jobs there, that problem would look very different.

------
dougmwne
It's interesting that some of the highest and lowest after-rent salaries are
in the Bay area. That's a pretty clear indicator of SF's constrained housing
supply in particular. It's also interesting so many low ranked after-rent
cities are in Florida, which might reflect a strong desire to live there
despite the lack of job opportunity.

~~~
imh
It's also relevant that SF is only 47 square miles, compared to the metro
area's 3.5k square miles. In many of our cities, people commute to work in
different cities (hence the horrible traffic). You can end up with different
salary:rent ratios comparing jobs in a city to rent in a city than you'd get
looking at salary:rent ratios of jobs of people living in a city to rent in a
city. Both are interesting statistics in their own right.

I'd bet the difference in those two statistics indicates uneven housing supply
(residential areas aren't the same as business areas) and small cities
(residential areas are counted differently than business areas).

------
ebikelaw
In any place where incumbent landlords are protected from competition, rents
will naturally rise to consume all available money.

~~~
w1
Henry George was right all along! It's amazing to see how similar income
levels are after taking rent into account.

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jowiar
Salary after rent is not necessarily an optimal metric. It works when looking
at things like vacations and national products, but when you’re looking at
local spend, that rent gets passed through everything that requires local land
and labor. Food (especially prepared food) and entertainment tend to be priced
in local dollars.

~~~
madcaptenor
I agree with this. I figure I probably have the same number of dollars after
paying for housing in Atlanta as I would working the same job in SF. But I can
buy food, entertainment, etc. at Atlanta prices.

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anarchy8
They're skewing the data to fit their narrative by only looking at medium rent
for a 2 bedroom apartment.

~~~
ProfessorLayton
Furthermore, those looking for a 2br are very likely to be dual-income, at
which point high cost areas begin to make a lot of sense even if the rent is
insane.

~~~
pmiller2
Likely true, but I would point out that there are significant advantages to
having a 2BR if you work from home at all. I use the smaller BR at my place as
the bedroom and the larger one as my office, and it's fantastic.

~~~
ghaff
It may be almost unthinkable in high cost of living areas but it's pretty
common for even fairly young people to rent a 2BR and use the spare room as an
office/hobby room/etc. I know I did after grad school.

It's another problem with this type of comparison though. What's a "typical"
apartment for a young professional to rent in a relatively low cost suburb or
small city is likely going to be very different from what the same young
professional would rent in Manhattan--even if they're paid more in the latter.

------
benwerd
If I ever found another startup, I'll do it somewhere with significantly lower
rents but proximity to a startup hub. For example, the Santa Rosa area fits
the bill in SF, and there are areas of New York that are significantly outside
of Manhattan or Williamsburg. It's just not worth the runway hit, and those
locations force you to try for a certain kind of funding that might not
actually fit the startup (or its stage) well. Cities like SF have enormous
value to a startup but not so much that you have to be in them day in, day
out. There was a time that this was the optimal thing to do, but I think it's
passed.

~~~
ebikelaw
The median home price in Santa Rosa is astronomical. Perhaps you meant Chico,
or Corvallis, or something like that.

~~~
benwerd
It's pretty high, I'll grant you - but 1/3 that of San Francisco. And the rent
is correspondingly lower. Chico etc are significantly lower than that, of
course, but they're a longer drive away - Santa Rosa is just an hour on the
101 from SF.

~~~
rrdharan
I'm not convinced it's really just an hour during commute hours.

~~~
ebikelaw
It's not, not even close. It's 2H typically, with very high variance.

------
cimmanom
Are all the charts loading for most people? I could only get the first one to
show up.

~~~
pythonistic
I had to disable Privacy Badger to get the other charts to show up. Disabling
uBlock Origin didn't help (or hurt).

------
guiomie
When I see CFO/CTO with salaries of 171k, I do not know what to think. Is the
term CFO/CTO overused? For me a CTO/CFO is someone in a publicly traded
company, and in those scenario they usually make in the millions.

~~~
opportune
Most companies are not publicly traded. Is the job/life of a CTO of a 15
person company different from one of a 15000 person company? Yes. But they are
still a CTO, and it's not necessarily overuse to call them that.

~~~
guiomie
I think it is, but I guess its a matter of opinion. I see someone using the
CEO/CTO title of a 15 people operation as disconnected from reality, makes it
seems like these people care about titles more than anything.

------
rmason
Rent isn't everything. The cost of living in Detroit is absurdly lower than
Silicon Valley. I was in SF this winter and everything little thing I bought
felt like it was 20% more than in Michigan. When on vacation I can get two
weeks in Florida for what one week in SF costs me.

------
dmode
The one thing that none of these analysis would ever unearth is how much money
you can make through real estate in California. That can rarely matched by the
incremental savings you get in a low cost area.

------
TomMckenny
Why do we have a system that financially discourages dense concentrations of
smart, productive, inventive people?

It seems the market encourages people to avoid doing anything that would make
their community attractive.

~~~
anonymous5133
I think it has more to do with how we build cities. If you think about it all
cities just start off as a collection of single story buildings in the central
business district (CBD). As the city grows the CBD slowly gets replaced with
bigger and bigger buildings. Under normal market forces high rents should be
reduced because builders will build more units in the area to meet demand.
However, the major factor that prevents this is government planning that
restricts market forces from occurring. The end result is there is not enough
supply to meet demand which ends up in bidding wars. The rent rises to absurd
rates until it meets demand.

Also cities are more likely to build high-density commercial since those
companies are generally bigger taxpayers and consume less government resources
compared to residential.

------
sjg007
This fits with anecdotes from people who live in the bay area that they have
roughly double the take home pay after rent etc...

------
erik_landerholm
Whomever is a CTO and making $140k a year...really needs to rethink their path
in life. That is ridiculous. The amount of responsibility a CTO has at a
company of almost any size, is a lot. I don't even know why a company would
bother having a CTO if that's all they think it's worth.

~~~
opportune
In many, probably most, companies a CTO is not necessarily someone coming from
a software developer background but instead essentially an IT manager. And
most companies are not headquartered in SF/Seattle/NYC, so $140k/year goes a
lot farther there. That $140k figure also does not account for equity/bonuses

~~~
erik_landerholm
Maybe, but that's avg. So, some CTO's make 350-1M+ a year and so I'm supposed
to believe many CTO's make less than 140k, maybe a lot less? Maybe indeed
should slice the data in ways that make sense, but company size, or area only.
As someone that manages 120+ people...I know a lot about what engineers and
other tech workers make. These numbers are straight silliness.

~~~
opportune
Well there are biases also, first and foremost that this data is from
Indeed.com and I doubt most high quality CTO positions are posted there. It
would definitely make sense to separate based on company size for executive
positions.

~~~
erik_landerholm
For sure. It's possible I'm just too sensitive to this stuff, but if you work
at company of any size..say over 100, and you manage a lot of people...having
your HR dept not understand how region, market, company size, etc effect how
you should pay, is a huge pain point. These kind of "studies" just make that a
lot harder.

Even the custom reports we get are "wrong" if you don't slice the statistics
correctly. And a lot of people have no idea what's going on with compensation
(salary, bonus and equity) right now, in competitive markets and competitive
fields.

Our company is only 700 people and it's been a huge challenge.

