Are Some Metros Better for the 99%?

By Margery Turner :: December 5th, 2011

Share

 

In the decade preceding the Great Recession, I was monitoring housing market trends in the Washington, DC metro area. The region’s economy was booming, population was expanding, and house prices were sky-rocketing. Well-educated people could get great jobs with high pay. But people working low- and medium-wage jobs had a tough time finding affordable homes and apartments. Even so, Washington seemed like a good place to live: unemployment was low and earnings were well above the national average – even for jobs at the bottom of the wage ladder.

Recently, the Occupy Wall Street protests have made me wonder whether the most prosperous metros – New York, DC, and San Francisco, for example – are really good places for the 99% to live.  Despite the crash, housing prices and rents there remain high.  Skilled professionals can probably earn enough to cover housing costs (if they can find work), but lower skilled workers face a real pinch.

Take a look at a few numbers.  If you live in the DC metro, you need to earn about $60,000 to afford the rent for a typical (modest) two-bedroom apartment.  Average earnings just barely exceed that threshold.  If you’re a computer professional, you probably earn much more (over $90,000 on average), but if you’re a personal service worker, you may only earn half of what you need to afford that apartment.  Disparities are equally stark in San Francisco, but the unemployment rate there is almost 10 percent, compared to only 6 percent in the Washington region.

Who Earns Enough to Pay for Decent Housing?


Source: Urban Institute analysis of NLIHC and OES data, available from www.metrotrends.org

How do things look in a low-cost metro like Detroit?  That two-bedroom apartment costs far less, but the personal service worker still can’t afford it.  And the Detroit metro’s unemployment rate stands at 13 percent.

One region that looks good on these metrics is Oklahoma City.  Somehow, it avoided the excesses of the boom years, and its economy has weathered the downturn better than most.  Housing costs are low, and though wages are too, a personal service worker can almost afford the rent for a two-bedroom apartment.  And at 5 percent, Oklahoma City’s unemployment rate is among the lowest in the country.

What can we learn from the Oklahoma City metro about keeping wages and housing costs in better balance through both good times and bad?  For my next blog, I’ll track down some possible answers.

 

7Comments

  1. K.G.  ::  10:58 am on December 12th, 2011:

    Why use a two-bedroom apartment as the measure here? A two-bedroom apartment would have two earners, so each person would have to make only $30,000 in DC. If there is only one earner, a one-bedroom is enough.

    Also, you need to clarify what being “affordable” means. Is that based on paying a certain percentage of income for rent? But many people are okay with spending a higher percentage of their incomes on rent, in exchange for living in an exciting city like DC.

  2. Compared to DC: the NYC Rental Market is a Bargain – City-Data Forum  ::  5:27 pm on December 12th, 2011:

    [...] and chart of the day regarding the cost of renting compared to income across different US cities. Blog post link accompanying the chart. I don't know about the 99 percent. But one could reasonably suspect that [...]

  3. Go Home Already: Wisdom | My Blog  ::  10:20 pm on December 12th, 2011:

    [...] is not really good for a 99 percent. [MetroTrends [...]

  4. E  ::  12:03 pm on December 13th, 2011:

    This is interesting when you look at the relative lack of affordable housing in these “major” cities and hubs. Anecdotally speaking though, I live in the DC-Metro area and make around 60k, and you’d be hard-pressed to find a two-bedroom less than 25 miles away from DC cheaper than $1500/month

  5. NYC Real Estate Update |  ::  1:46 pm on December 13th, 2011:

    [...] Are Some Metros Better for the 99%? |” Recently, the Occupy Wall Street protests have made me wonder whether the most prosperous [...]

  6. Tom A  ::  2:21 pm on December 13th, 2011:

    Well, the salary of the 99% is $0 – to well over $800,000.

    So….. I think the 90-99% can afford to live ANYWHERE.

  7. Slinking Toward Retirement | Housing Costs vs Wages | News, Travel, Opinion and Just Odd and Funny Things…  ::  5:00 am on December 15th, 2011:

    [...] a great chart from the Urban Institute illustrating how housing costs and wages vary from place to place. It suggests that a typical worker in Oklahoma City or Chicago could increase his or her wages by [...]