Most Livable Cities Also Very Affordable

I'm sure this post will ruffle some feathers. :-)

I've noted more than once that where you live has a big impact on your finances. Of course, anyone is free to live wherever he likes for whatever reasons he likes. That's not my point. My point is that it costs more to live in some places rather than others and this can significantly, negatively affect your finances over time. And yes, people often earn more in more expensive cities than they would elsewhere, but I've shown that this increase in income does not make up for the increases they experience in costs. As such, living in expensive markets is a net financial loss no matter how you look at it.

But there's nothing going on in less expensive cities (or so many people would say.) What if you want to see a play at 4 am or if you would like to see the latest soda can traveling art exhibit? Those "fly over" cites don't have these options available, and as we all know, money can't buy that sort of "lifestyle experience."

Ok, so I'm exaggerating a bit to make a point. But you know what I mean. People living in expensive cities often cite how great their cities are and how bad others are. And they often do it with an attitude of "how could people even stand to live there?" disbelief.

So I found it especially interesting when Forbes listed the following as America's most livable cities:

1. Pittsburgh, Pa
2. Ogden, Utah
3. Provo, Utah
4. Ann Arbor, Mich.
5. Harrisburg, Pa.
6. Omaha, Neb. 
7. Manchester, N.H.
8. Trenton-Ewing, N.J.
9. (tie) Bridgeport-Stamford-Norwalk, Conn.
9. (tie) Lincoln, Neb.

How did they decide this ranking? By looking at five key data points including both financial and "quality of life" measures: 

In compiling our list, we measured five data points in the country's 200 largest Metropolitan Statistical Areas: unemployment, crime, income growth, the cost of living, and artistic and cultural opportunities.

Wait! So you mean there are places to live that have low costs, good income growth, low unemployment, and also offer lots of cultural alternatives in a safe environment? Wow, who would have ever known that? ;-)

Living in an average to low cost-of-living city for most of my adult life has saved me a fortune. And I've thoroughly enjoyed every place I've ever lived (I even lived in #1 for five years.) So for me, it's been a win-win. For others, it might not work. But if you have the choice between living in a higher cost city versus a lower cost one, be sure you run the numbers and see how much that expensive city will cost you over the next decade or two. I believe you'll be stunned by the expense.

Comments

[Jenn in Michigan]

I can see Ann Arbor being on the list. In Michigan it is a very desirable city to live in. However, it is not affordable from the perspective of many Michiganders and has a reputation of being a highly elitist city. Most middle to low income workers who's jobs are in Ann Arbor are forced to find affordable housing in smaller villages and cities like Brighton, Howell, and Saline. Many commute into Ann Arbor to work, very few can afford to actually live in the city itself. In comparison to cities in other states Ann Arbor may be highly affordable, but in comparison to its surrounding area it is not.

[Matt]

Agree with Jenn in Michigan. Ann Arbor is not affordable. Plus unless you like all the liberal cultural events and mayhem that happens around University of Michigan (FOOTBALL) you are better off not living there. Ann Arbor has little that I am looking for in a city.

Honestly, Forbes criteria is questionable in my opinion.

[MrAtoZ]

What's interesting and in some ways dubious about this list is there is not a single Sun Belt city among these...nothing from the South. Are we really to believe that people would forego Charlotte or Austin for Trenton? HAs anyone from Forbes been to Trenton? Really?
What's more, with the exception of Utah, where population is growing, and Nebraska, where population is stagnant, every one of these states is losing people. Wait till the 2010 census is complete and then count how many congressional seats are lost by the combination of 5-6 states represented here.
So I don't know about the Forbes' criteria, but the evidence would suggest that for MOST of these places (and I have visited at least 5 of them in the past decade), those criteria are not magically drawing crowds of new neighbors.

[Rob]

My wife and I both grew up on the east coast and now live in Ohio. We have thoughtt about moving back east a few times but whenever we look at the numbers it just does not make sense. We would have to get some REALLY high paying jobs to have an equivalent lifestyle as we do in Ohio. Plus, I'm pretty content being in the Midwest. It is much more laid back.

[Laura]

I live in Omaha, NE and I am delighted to see it on the list. Omaha is growing by leaps and bounds in several areas including the arts, music (indie music capital!), business and commerce, and recreational activities. There is plenty of afordable housing in charming turn of the century and mid-century neighborhoods. Commuting is relatively quick and simple. There is always something to do!
We've got out share of problems...what city doesn't...but I was born and raised here and can't imagine living anywhere else!

[RBK]

MrAtoZ, I noticed the same. Nothing south of New Jersey? Seriously? I'm surprised that Forbes did not consider climate as a factor in whether a city is livable or not, considering the hundreds of thousands of people that leave these same states during the winter and come south because they can't bear the cold.

[Old Limey]

I have lived as follows. Ranked from 1 to 10 with 10 being the most desirable.

Bournemouth, on the South coast of England ....... 22 years ----------- 3 .... 1934-1956
Toronto, Canada ................................................ 2 years ------------ 1 .... 1956-1958
Denver, Colorado ................................................ 2 years ----------- 5 .... 1958-1960
San Francisco Bay Area - Silicon Valley ............. 50 years --------- 10 .... 1960-2010

Bournemouth - Seaside resort, great beaches, great surrounding countryside, cold, damp winters, lots of rain, unpredictable summers, poor job opportunities.
Toronto - On Lake Ontario, terrible summer heat and high humidity with lots of June bugs, flies & mosquitoes, miserable cold winters, lots of nice lakes up north, good job opportunities.
Denver - Very friendly people, skiing, backpacking, camping, hot dry summers, tolerable winters, good job opportunities.
Silicon Valley - Forward thinking, young population, every recreation including winter sports at Lake Tahoe, great job opportunities if you qualify, the best year round climate in the world.

As for affordability - if you want a great climate in a beautiful area with lots of job opportunities then be prepared to pay dearly for it. We moved to California in 1960, our first home in 1963 was a brand new 4br, 2ba ranch style in a nice subdivision for $26,950, sold it in 1977 for $90,000, current appraisal at zillow.com is $744,500. Our second home bought in 1977 was a 4br, 3ba ranch style, 5 years old, on 1/3 acre, in the best area of our small city for $107,000, current appraisal is $1,027,000.
In 1960, it was called the Santa Clara Valley and a major producer of apricots, cherries, plums, and prunes with many canneries. That all changed. Now it is home to Intel, AMD, Cisco, Adobe, HP, Google, Yahoo, Apple, my former company Lockheed Missiles & Space, and hundreds of others. Stanford University and the University of California at Berkeley played a vital role in the change from fruit to semiconductors.

Another affordability factor is that our property taxes are only $2,216/year, but because of proposition 13 enacted in 1978, a new buyer would be reassessed and pay about $11,000/year. We also don't need A/C as because of the effect of the Pacific ocean on one side and the Bay on the other, it cools down greatly after sunset. I use a whole house fan for an hour or so in the evening, 4 or 5 days a year if it gets into triple digits - so far this year it hasn't been needed. Our city has its own electricity company with rates about 30% lower than Pacific Gas & Electric Co. We also have scores of city, county, and state parks and recreational facilities within a 50 mile radius, and a 325 mile (eventually 400 miles) Bay Area Ridge Trail for hiking, biking, equestrians, and camping.
If you are a keen gardener then this is the place. I have been picking plums, squash, cucumbers and beets for several weeks and today I picked my very first heirloom tomatoes.

[Kelsey]

I was quite surprised to see Harrisburg, PA on the list. While it is fairly affordable to live there, the level of crime is high (for central PA). Also, the City of Harrisburg is considering bankruptcy; city politics are always a hot button there.

A lot of multi-use development is happening there, so I do believe the perception of growth is probably what got Harrisburg on the Forbes list.

[Budgeting in the Fun Stuff]

I count myself lucky that I was raised around Houston, TX since I'm not big on moving away from everybody I know.

Houston has culture, great food, all the amenities I'd ever want, jobs, and a low cost of living. Like I said, I'm just glad it wasn't a hard choice.

Yes, I am willing to pass up the fantastic weather elsewhere for the great stuff right here (and the weather I enjoy - temp less than 80 - is around for about 6 months a year, lol).

[vga]

I find your (Forbes?) assertion that there is culture in these cities highly dubious.

Utah? Seriously? Only if you're a mormon.

Nebraska? I guess.... If you count Husker's football and farming as cultural events.

Ann Arbor at least makes sense. But then you're stuck living in Michigan - which is either a good thing or a bad thing depending on your take on being surrounded by Liberals and snow.

Finally, where is the mid Atlantic, the South, the West coast? Is this list telling me that there is nothing worthwhile in 3/4 of the country?

[Money Reasons]

I think ideally, it would be best if you worked in a big city, with a big city income, but telecommuted in from a city like the one you identified above. That way, you get the best of both world... a total win-win

[jclimber99]

Austin, TX usually gets rated on high on lists of desirable places to live, but I guess it's too expensive for this list. I love it here and is the only place I'd consider living in TX. Housing costs are higher than the rest of TX but lower than the East/West coasts. No income tax but property taxes run about 2% of the appraised value. Other than housing I don't see living here would cost much different than anywhere else.

[MC]

Well from your comments/bad jokes in the post, FMF, it's clear how highly you value cultural opportunities. Not surprising then that you don't care about these things. However, some people do care about these things even if you don't.

Another thing not mentioned is the political and racial climate in these places...As an educated liberal democrat with Hispanic kids, I find the casual racism, sexism, anti-intellectualism, homophobic attitudes isolationism (those darn French!), lack of diversity, and hatred of immigrants and hatred of non-Christian religions here in the Midwest to be very alienating. While it's true that not everyone is like that here, those who are are really not quiet about their views and tolerance seems to be looked down on.

Would you really recommend an african american settle in Utah? I can't see that working out real well....

[Old Limey]

In 1958 when we emigrated from Toronto, Canada to Denver, Colorado we entered the country at Port Huron, Michigan. As we were processed by immigration I said to the border guard, "We have plenty of time to get to Denver, what interesting places would you recommend that we visit on our way?" His reply was, "There's nothing worth stopping for between here and Denver". We started down US 80 and got to a small town in Nebraska before we couldn't go any further because of a snowstorm that obliterated the road, I believe it was North Platte. Fortunately there was a nearby motel where we decided to spend the night. The owners were incredibly friendly and asked us to come visit them after we unpacked and settled in our unit. We had a delightful evening chatting with them and did discover that the highlight of their existence seemed to be watching their high school basketball team in action. Denver was also very friendly to newcomers and we quickly made lots of friends. In California we have 6 ft. fences around our rear yards which makes it hard to get to know your neighbors, but that seems to be the way most people like it. There's both good and bad about every place but home is where you put down your roots.

[Matthew]

I know that most people will turn their nose up at my home, but I live in Alabama. I cant understand all the people that live up North where the taxes are so high, the salaries are NOT that much higher, and the weather is horrible. I live in Homewood, AL which is a subburb of Birmingham. I work for the power company as an engineer and have been out of school for 3 years now. I make around $72,000 with my bonus pay, and 2 years ago I purchased a nice 3br/2bth 1500 sqft house for around $170,000. My property taxes are around $1200/yr. We have such great weather, beautiful beaches within a half day drive. The most recreational freshwater mileage in the lower 48, and......ALABAMA FOOTBALL (sorry, I am obsessed!)

Everyone thinks we are all racists down here but if you came you would see that most everyone is friendly and helpful. This is a great place to live and have your kids grow up, and I hope more people give the South a chance!

[Kimberly]

Interesting list, I like that Utah has two spots in the top 10. I've only been there once, but clearly it has been an underrated state until now! I myself am in love with New York City, but talk about high cost of living. I had to leave because I couldn't afford it. #4 on the list sounds appealing to me, so perhaps I will give it a try. :)

[billyjobob]

I live in the county. 10 minutes away from the great Lake Michigan. Money Magazine named us as one of the great places to retire on the water. For me the cost of living is extremly cheap and I can easily drive to Chicago, Grand Rapids, Kalamazoo or Detroit if I find a need to go there. I would not want to live in any city. I believe I have the best of both worlds.

[FMF]

billyjobob --

Sounds like I need to become your best buddy so you can invite me to your Michigan paradise. :-)

[Pop]

Hey FMF,
Was tonight Applebee's night, or Denny's?

[Anonymous]

SO glad my state isn't on here...the last time that Forbes listed our capital 'city' (sorry to be cryptic) on the list, we truly seemed to suffer from an influx of people from neighboring states (no offense, I used to live in NJ, but people, please go back to NY/NJ! You have beaches there, too!). We are now getting pretty overpopulated, so much so that our infrastructure is barely keeping up.

It was the combination of affordability, decent climate, proximity to many major metropolitan areas, and schools/colleges that put us on the map, I think.

[Jim]

MC, I feel sorry for you. It seems that you aren't open to any other thoughts or viewpoints other than your own very narrow ones. I have lived in Minneapolis MN, Jamestown NY, Chicago IL, Central NJ, Madison WI and now Southeast PA. I've been enriched everywhere I live. OH, by the way, the most racist place I lived was in the enlightened liberal mecca of Madison, WI.

[Squirrelers]

It's the free market at work. Some places are more expensive that others for a reason.

I lived in Indianapolis for some time, and that was a very pleasant city - very underrated - and very inexpensive relative to where I live now, Chicago. That said, there are many more career and cultural opportunities in Chicago.

I have people very close to me living in San Francisco. More expensive than Chicago - but there is better weather, more recreational opportunities, etc.

What I'm saying is that there is a spectrum of pricing for a reason - some places are more desirable than others, all things considered.

Now, if one can truly be happy living in a smaller town or city further removed from a more expensive metropolitan area - AND can be able to make a good living in such an area - then it's a win-win. Clearly, with a lower cost of living, it all adds up over time, and can really make a huge impact on your nest egg. So I agree with that part of the original post.

Personally, I'm staying where I am - in a big metropolitan area. All a matter of choice, no right or wrong. Happiness is more than one's personal NPV!

[Old Limey]

A very frequent occurrence is that a couple will decide to move to a far different location when they retire. It really means that they weren't very happy throughout their working life and stayed because of their career, but retirement gave them an opportunity to leave and to go somewhere that they really would have rather lived all along. There's also the fact that people can cope with snow, ice, and cold weather when they're young but realize it would not be desirable for a host of reasons when they get up into their seventies and beyond.

We were lucky, we liked living where we were in California during our working life and couldn't think of anywhere else that we would rather live. A few colleagues stayed in state but moved to less expensive regions. Of course as the previous writer pointed out, they're less expensive for multiple reasons.

Another factor is healthcare, we happen to be in a Senior HMO that we really like a lot and even moving to the next county over would mean that we would have to change healthcare plans. Senior HMO's generally only offer services in regions with denser populations. Who thinks about healthcare when they're young and healthy? Hardly anyone!

I also know two couples that lived in idyllic rural settings that are great when you can both drive, are both very healthy and can cope with some of the issues that arise when you have a long drive down a steep and winding, unlit road to civilization, or lack many of the services available in suburbia. One couple moved soon after retirement when the husband's health deteriorated. The other couple, that we visited yesterday, are still in their very early sixties and don't even seem to be aware of the issues with their location that are very apparent to a couple like us in their mid seventies and it's not up to us to point them out. What can look like a big "plus" at 62 can turn into a huge "minus" later on in life if you don't give some thought to your retirement and all the changes that take place as you get older.

[My Personal Finance Journey]

I completely agree with your conclusion about any increase in income due to living in a more expensive city not making up for the cost of living increase. I work for a large pharmaceutical company, and the pay is the same no matter if you live in New Jersey or in the rural parts of Virginia. Very interesting!

[BD]

Oh man, vga hit the nail on the head with his comment. Utah is NOT liveable, unless you're Mormon. I know. I live here (not by choice, and first opportunity, I'm outta here). Discrimination against non-Mormons in Utah still exists, folks.

[billyjobob]

Yeah FMF! St Joseph, Michigan. I love boating on the St Joe river and the big lake. The Grand Mere dunes. Summer in SW Mich is great. Lots of festivals this time of year. all along the Fruit belt. Something going on every weekend around here.

[FMF]

billyjobob --

I've heard that area is very nice. Good for you!!!

[Sarah]

@ Matt & Jenn in michigan - I understand what you're saying about Ann Arbor, but perhaps I am biased because I grew up there. As far as the cultural events though, I never realized how much Ann Arbor had to do until I moved away. I currently live in a suburb of Cleveland, and was surprised by the lack of fun free activities, non-chain restaurants, etc. Growing up in Ann Arbor we went to the art museum, outdoor concerts, botanical gardens, etc. As for affordability, the housing may be expensive compared to surrounding areas (although it doesn't even come close to the prices of the northern suburbs of detroit), but it isn't that out of line with what I have found elsewhere. We grew up lower-middle class and had a house within ann arbor.

[Jenn in Michigan]

Really, the best place to live depends on your personal preference. To me the best place to live would be the Charlevoix area in Northern Michigan. You couldn't pay me enough to make me live in the Detroit Metro area. To me it is too crowded with endless mini-malls, but then I grew up on Lake Superior in the Upper Peninsula. The U.P. was too isolated for me but N. Michigan is a perfect in between. BTW, I like the cold and detest the heat, once it gets over 70 degrees I am miserable! Good thing I love Michigan!