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The Places in America Where Most Income Goes to Rent

priceonomics.com

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Re: The Places in America Where Most Income Goes to Rent

#51

Post by beat »

sjg007 wrote: post #39
MrMember wrote: post #25

Earlier quoted context omitted.

Expand that to the entire Twin Cities area and prices fall even more. I bought a two bedroom condo in a suburb 20 minutes from downtown Minneapolis for $80k last year. When I was renting a three bedroom two bathroom house house in a nice area of South Minneapolis was $1500 a month. And developer salaries here are pretty good. Not Bay Area levels, obviously, but mid-level developers should be making over $100k in base…

What would the equivalent house have cost you?

I live in a nice but not upscale neighborhood in South Minneapolis (Longfellow, just north of Minnehaha Park, a few blocks from the famed Minnehaha Falls from Song of Hiawatha). My block is basically 100 year old bungalows in the 1200-1800sqf range, mostly three bedroom (two main floor plus a finished attic). The house next door to mine and the house next to it have sold in the $325k range in the past year. They're both pretty nice - a couple more sold farther down the block that were a little smaller and not as sweet, for around $300k.

fwiw, one of the new neighbors came from the East Bay area, and they were boggled at being able to get a beautiful 3br in a great neighborhood for that price.

Re: The Places in America Where Most Income Goes to Rent

#52

Post by daxorid »

drngdds wrote: post #48
Jormundir wrote: post #29

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.

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

What is the norm? Fewer, or more bedrooms than two?

Re: The Places in America Where Most Income Goes to Rent

#53

Post by ahelwer »

prolikewh0a wrote: post #50
loeg wrote: post #27

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.

Capitol Hill last year I was paying $3200/mo for a mediocre 1br. These prices seem accurate. Studios downtown are pushing $2000. 2br are pushing $4000. Check Zillow. I now live 9ish miles outside of the city and pay $2000 less for a 1br rental condo with an actual yard I can garden in, and patio.

I find it highly improbable that your 1br was mediocre for $3200/month. The only place you can even find 1br rents that high is in brand-spanking-new buildings with tons of amenities and huge unit sizes.

For another data point, I have rented a respectable (1985+ wood frame building) 2br for the past two years for $1595/month total in Capitol Hill. You can find many places for cheap during the December-February time period.

Re: The Places in America Where Most Income Goes to Rent

#54

Post by ghaff »

pmiller2 wrote: post #36
ProfessorLayton wrote: post #23

Earlier quoted context omitted.

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.

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.

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.

Re: The Places in America Where Most Income Goes to Rent

#56

Post by pmiller2 »

occamrazor wrote: post #42
pmiller2 wrote: post #35

Earlier quoted context omitted.

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?

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

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.

Re: The Places in America Where Most Income Goes to Rent

#57

Post by [deleted] »

drngdds wrote: post #48
Jormundir wrote: post #29

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.

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

[deleted]

Re: The Places in America Where Most Income Goes to Rent

#58

Post by dionidium »

dawhizkid wrote: post #55

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.

How do you "do it right?"

Re: The Places in America Where Most Income Goes to Rent

#59

Post by rsync »

zdragnar wrote: post #21
Woofles wrote: post #15

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 les…

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.

"The rents seem absurd to me- $1300 for a one bedroom apartment?"

I think these numbers are unduly skewed by the relatively very large build-out of condo buildings that has occurred in Minneapolis in the past 4-5 years.

Prior to 2005 (or so) Minneapolis was a very, very white-flighted downtown area with only a very few condo buildings extant. The notion of living in downtown minneapolis, to most metro area residents, was a weird and wild one.

So now, there is a huge influx of supply but it is all made up of "luxury" units that I believe are going online, in the market, with very optimistic rent numbers. I believe those newly online rental units are skewing the number upwards...

Re: The Places in America Where Most Income Goes to Rent

#60

Post by tjr225 »

loeg wrote: post #27

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.

Sshhh. Nobody move to Seattle. Its too expensive - you're looking for Austin or Minneapolis. ;)
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