By Larry Edelman Boston Globe, Updated May 2
“Young people define Boston,” my colleague Diti Kohli wrote last week in a special feature looking at the financial obstacles young people face in Boston.
In interviews with adults under 25 years old — a.k.a. Gen Z — Diti wanted to learn whether they saw a future for themselves in the city.
“Nearly everyone,” she reported, “said no.” For most, Boston and its environs are just too expensive.
The reporting prompted me to dig into the data on living costs. I was a little surprised — and not a little disheartened — to see just how poorly the Boston metropolitan area stacks up, especially against regions where many people — not just Gen Z but millennials, Gen X, and even boomers — are relocating.
New York and San Francisco, as always, are pricier than Boston — by 16 percent (in the Gen Z mecca of Brooklyn) and 23 percent, respectively, according to NerdWallet, the financial information website. Costs in Los Angeles and Seattle, meanwhile, are about the same as in Boston.
But there are glaring disparities with many metros that have emerged as serious competitors to Boston for people and jobs. Atlanta, Dallas, Miami and Tampa, Fla., and Phoenix are all roughly a third less expensive. Living costs are 27 percent lower in Denver.
Housing is the big outlier for Boston, with NerdWallet saying shelter costs here are a staggering 50 percent higher than in Atlanta, Dallas, and Tampa. But other basics — transportation, food, entertainment, and health care — are also more expensive.
Looking at the issue another way, MIT has a tool that compares the “living wage” needed to get by locales across the country. An individual with no children in the Boston region needs $22.59 an hour, or about $47,000 a year. That’s more than the metros named above except New York (about the same) and San Francisco ($49,300).
When comparing living costs, you can’t ignore incomes, and incomes in the Boston area are among the highest in the country.
The region’s per capita personal income was seventh highest among US metro areas at $92,290 in 2021, the latest year for which Bureau of Economic Analysis data are available. That’s a third more than the cheaper cities cited above.
So, yes, for some people, the steeper cost of living in Boston is offset by higher pay — at least in part, and at least before factoring in taxes.
Also worth pointing out is that prices are now rising more quickly in some Sunbelt cities than in Boston. Over the past 10 years, annual inflation, as measured by the consumer price index, increased 2.4 percent here compared with 3.3 percent in Tampa and 3.4 percent in Phoenix.
Last year, inflation advanced 10.7 percent in Atlanta and 9 percent in Seattle. In Boston, the rate was 7.1 percent.
The Wall Street Journal ran an interesting chart last month after March CPI numbers were released. It showed that compared with Boston, the shelter component of the inflation index climbed significantly faster over the past year in metros including Phoenix, Tampa, and Denver, and Dallas.
Gen Zers are right to worry about whether they can thrive in Boston. But the cost advantages of cities in the Sunbelt and Mountain states are shrinking.