Most expensive cities in the USA

We don’t want to be number one

By Morf Morford, Tacoma Daily Index

A nice place to visit, but who can afford to live there?

Life in New York’s Manhattan borough is expensive. It costs more to live there than anywhere else in the U.S. by a wide margin — the cost of living there is more than double the national average. At least according to data from The Council for Community and Economic Research’s Cost of Living Index, which measures regional price differences for everyday goods and services in 271 urban areas.

Manhattan’s cost of living is 24% more than Honolulu, the second-most expensive urban area in the U.S. And it’s 31% higher than San Francisco, the third-most expensive city.

In this study, the cost of living is a formula based on a composite index score with six basic and dominant categories: housing, utilities, groceries, transportation, health care and a range of miscellaneous goods and services. A composite score of 100 is the national average, and any score higher than 100 is above average.

Within that framework, New York (Manhattan) is number one at 222. Honolulu is a (fairly distant) second at 179. San Francisco is just short of 170. New York (Brooklyn) stands at 159.

Orange County, California is fifth at 150. Los Angeles (Long Beach) is 149. Washington, D.C. is 148, as is Boston. Seattle is number nine at 144.5. San Diego rounds out the top ten at 142.5.

Housing tilts the balance

As you might guess, the prime driver of Manhattan’s high cost of living is housing. Housing in Manhattan cost about five times the national average. In Honolulu and San Francisco, housing costs about three times the national average. A major contributing factor to high housing prices in Manhattan, Honolulu and San Francisco is the severely limited amount of land for potential expansion.

Seattle has that same problem. But unlike Seattle, New York is home to 340,000 millionaires and 58 billionaires. They can easily afford opulent homes, and put pressure on average housing costs for everyone else. Manhattan also has the highest miscellaneous living costs, including everyday (and tourist) expenses like entertainment, alcohol and clothing.

When some go high, others go low

The city with the lowest cost of living in the entire country is Harlingen, Texas, which costs about 25% less than the average American municipality in terms of living expenses. They have low taxes, cheap housing and proximity to cheap gas, but as you might expect, prices are low because they have to be. The whole area has a high rate of poverty.

The second cheapest city is Decatur, Illinois at 77 (on the scale of 100). Others on the top ten of affordability are Muskogee, Oklahoma (80); McAllen, Texas (80.9); Tupelo, Mississippi (81.7); Lawton, Oklahoma (82.5); Kalamazoo, Michigan and Ponca City, Oklahoma, both at 82.9; Pittsburg, Kansas at 83.1; and Conway, Arkansas at 83.2.

It’s lonely at the top

In short, my bias is that I’m not interested in being “number one” in any category. Being the most, or least, expensive city has, at minimum, its challenges, if not frustrations. Living a satisfying life is difficult enough without facing continually rising expenses – or the burdens, both personal and social, of poverty.

Meanwhile, in Tacoma

The greater Tacoma area is a bit more expensive than average, mostly, as you might surmise, because of housing. Tacoma’s housing expenses are about 37% higher than the national average. In contrast, utility prices are about 1% lower than the national average.

Transportation expenses like bus fares and gas prices are 17% higher than the national average. Tacoma’s grocery prices are 22% higher than the national average. And, for whatever reason, health care in Tacoma is 28% higher than the national average.

To see where other cities sit on this scale, take a look here.