Mar 6, 2014
Is New York Really the Most Overpriced City in America? Or Just the Most Expensive?
Forbes released its list of the 25 most overpriced cities in America last week, and to the surprise of probably no one who lives here, New York City came out on top. Hold your “We’re number one!” cheers, though, because we only tied for the top spot. Which, I guess that doesn’t mean we’re not number one, it just means that residents of Honolulu also have it pretty rough. Forbes determined which cities were the most overpriced using the following criteria for American cities with at least 600,000 residents: housing affordability, a cost-of-living index based on the price of “food, utilities, gas, transportation, medical expenses, and a host of other daily expenses,” and then Forbes weighted both those factors, but “because housing is such an important expense to most people, [they] tipped the scales a bit higher.” Which, oh shit. You know if housing is weighted more heavily than other cost-of-living expenses then NYC is definitely screwed.
The other places that round out the top ten most overpriced cities on the list (and Forbes uses “cities” loosely, which, whatever, Forbes) are: southern Connecticut (the Stamford/Bridgeport/Norwalk area); Boston, MA; San Jose, CA; Long Island (like, the whole island, other than Queens and Kings counties); Essex County, MA (the Peabody area); San Franscisco, CA; Cambridge, MA; Santa Ana, CA; and Oakland, CA. All of these places share with New York City (and Honlulu) the dubious distinctions of having some of the highest-priced and most-coveted but least-available real estate in the country. Whee! How fun for all of us who live in these places! But while the price of basic amenities is elevated in each of these cities and regions, Hawaii is notable for having much, much higher prices than anywhere else (“groceries in Honolulu cost 55.6% more than the national average; utilities 67.9% more”) due to the fact that it’s located in the middle of the Pacific Ocean. (Have you ever looked at where Hawaii is on a globe? Not a map, but a globe. There is NOTHING else out there. I get panic attacks thinking about it, though I was fine when I was actually there. Anyway!)
So, obviously, all these places are really expensive to live in, but didn’t we already know that? Hasn’t this been pounded into our collective head enough? What makes these places overpriced, instead of just pricy? Forbes acknowledges that, because “New York has cultural offerings, [and] Boston has universities… maybe some people would just say ‘expensive.'” But Forbes still calls it overpriced, because… they want a catchier headline? Probably. It happens. Which, fine, I guess (not fine at all), except that there is a worthwhile conversation to be had about whether or not these cities are merely “expensive” or legitimately overpriced. Sure, the cultural institutions in New York City are one of the city’s draws, as are the sunny beaches and jasmine-scented air in Honolulu. But New York offers much more than just that in the form of a relatively stable job market and a strong public university system and the ability to save money on things (especially costs related to cars, such as gas and insurance) that are built into the foundational costs of living in other cities. And while it’s pretty easy to go to a gourmet store and drop $100 on a bag of groceries or spend $200 on dinner for two at a local restaurant, it’s also possible to find good deals on fresh produce and cheap food that will still count among the best meals you’ve ever had.
That said, it’s impossible to argue that the benefits of living here in any way outweigh the financial negative of paying 50% of your monthly paycheck toward rent. That’s not exactly news, though, and is one of the reasons that many people use when they talk about leaving the city. But while it’s hard for me (like, surprisingly, hard on a visceral level) to think of this city as being overpriced rather than just incredibly expensive, (mostly because of all that is on offer here, including, yes, the cultural offerings), it actually is probably just straight-up overpriced for most people, especially those who move here and have roots somewhere else and work at a job that could be done in another, more affordable city. It is not just very expensive here, it is too expensive. When people who number among the top 5% of earners in the country can’t even afford to buy a two-bedroom apartment, there’s something seriously wrong. There are some signs of hope that the de Blasio administration will make serious efforts to increase the stock of affordable housing, but that’s still some ways away and still doesn’t solve the larger problem of this city’s real estate bubble. Which, in the case of Honolulu, which has limited land and a growing population, it’s possible to say that the high prices are purely a function of demand, not willful real estate speculation. But with New York? There’s a gross cynicism to the market, a willingness with landlords to charge whatever crazy price with which they can get away. And so you get young people paying $900 a month for an 8×11 room that’s an hour-and-a-half commute (each way!) from their jobs. That isn’t just really expensive, that’s overpriced. In other words, Forbes was right about something? Fuck. We’re living in crazy times.
Follow Kristin Iversen on twitter @kmiversen
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