Comparing Boston’s Rent to Other Leading Cities

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Boston is a city with a unique mixture of history and contemporary character. Perhaps only Philadelphia can offer the history buff a comparable big-city experience, and Boston can hold its own with New York and San Francisco in terms of remaining on the cutting edge.

Living in a big city is expensive, though, and living in Boston is certainly no exception. Small town U.S.A. can’t compete with the teeming metropolises for the American imagination, but all of those possibilities add up to one pricey lifestyle.

02It’s easy to think in nice round numbers and say the cost of living in the biggest cities in the United States is roughly the same, but when you are crunching the numbers in your own budget and trying to figure out what you can afford, “roughly” isn’t quite good enough. Perhaps you are moving from one big city to another, and you want to plan your finances accordingly. Or perhaps you have the flexibility to choose where you are going, and you want to figure out which city is right for you and your bank account.

We can’t help you plan every last penny of your monthly budget, but we can give you an idea of how Boston stacks up against other big cities in the United States in cost of living. Hopefully you’ll find this information helpful so you can learn what to expect if you are moving to Boston or deciding whether Boston is the best choice for your next move.

Rent Prices

Renting an apartment in Boston isn’t cheap. Boston is one of the most expensive cities in 03the United States for the renter. With a median monthly rent of $1,263, Boston ranks as the third most expensive city in the country, according to a 2013 study by the Furman Center. Shockingly enough, this places Boston ahead of New York City, which has long been taken for granted as the most expensive rental market in the United States. While San Francisco and Washington D.C. have famously surpassed New York City, unfortunately, Boston has as well.

We’re going to spend a lot of time in this article discussing numbers and statistics, so we would like to start out by offering the standard disclaimer: All of our consumer pricing numbers are taken from Numbeo.com. Our rental data comes from the Furman Center report mentioned above.

Cold Hard Truth – Why It’s Not Likely to Change Any Time Soon

With some other cities, we can point to some obvious factors that contribute to high rental prices. In New York, Washington D.C. and Los Angeles, massive amounts of wealth are generated from the financial, governmental and entertainment sectors, and rent prices have been largely set by what people can afford. Once that cycle is set in motion, it can be impossible to halt, though New York City’s rent control program helps a tiny bit.

In San Francisco and Silicon Valley, the exponential increase in rental and property prices is directly attributed to the technology boom and the influx of wealth that it created. Home and rental prices merely hung on for the ride when income levels in the tech sector skyrocketed.

This isn’t to say these trends are going to reverse themselves any time soon. But in Boston’s case, the trends aren’t so obvious. Boston isn’t a historical center for finance or entertainment, nor did it experience the explosive growth of a single industry.

04Rather, Boston’s expensive rental market is tied to its age. As one of America’s oldest cities, its historical buildings and antiquated city planning have limited options for creating more rentable residential space. New York chose to literally grow up, and other major cities like Chicago and Los Angeles grew out and consumed their closest suburbs. Boston is hemmed in somewhat by its waterways and the older, less flexible nature of its suburbs.

We can look at a few key figures to explain why Boston’s rental market isn’t likely to change any time soon:

Rental Vacancy Rate

Boston’s rental prices can be explained in part by the state of the rental market itself. Boston sports the third lowest vacancy rate among the 11 cities studied, at a miniscule 3.5%. If it feels like you can’t seem to find an available apartment in Boston at any price, this could explain why.

Percent Change in Rental Population Versus Rental Properties

According to the laws of supply and demand, prices in the Boston rental market will continue their upward trend. The almost 23-percent change in the rental population is far outpacing the 15-percent change in rental properties, so demand will continue to outstrip supply in the foreseeable future. As competition for available rental properties increases, prices will go along for the ride.

Affordable Rental Units by Income Level

Of course, finding an apartment you can afford isn’t such a big deal if your budget is as big as Boston Harbor. For the rest of us, our budget is going to be the first criteria limiting our search.

In Boston, individuals with income near or below the median income level are priced out of roughly 70% of the rental market right from the get-go. While this number may seem high, you’ll be in better shape in Boston than you would be in New York, L.A., or San Francisco. According to the figures in the Furman Center report, in all three cities, the percentage of rental units considered to be affordable to middle income rentals is less than Boston’s 29%.

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Living Expenses: Rent Isn’t Everything

While it can be easy to fixate on the cost of your monthly rent, other living costs vary wildly among the major cities in the United States. When comparing Boston and New York, for example, your apartment might be slightly more expensive in Boston, but practically everything else is going to be more expensive in New York City. At the end of the day — or rather, month — it is likely that living in Boston will take less out of your bank account.

Cost of Living: The Complete Picture

To calculate cost of living, the most popular metric is called the Consumer Price Index (CPI). The U.S. Government maintains a CPI, which has proven to be quite effective in monitoring the health of the nation’s economy and informing fiscal policy decisions. But there’s nothing mystical about the CPI, so other organizations have created their own models. To get an idea of how the total cost of living in Boston compares to other major cities, we’ll take a look at Numbeo.com’s CPI and compare a few specific items:

  • Median monthly rent
  • Utilities
  • Internet access
  • A dozen eggs
  • Gym membership
  • Transportation
    • A one-way ticket on the subway
    • A one-mile taxi ride
    • Monthly pass

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Boston

New York

Los Angeles

Chicago

San Francisco

If you had $5,800 a month to cover all of your living expenses in Boston, an equivalent lifestyle would cost:

  • $7,206 in New York
  • $5,155 in Los Angeles
  • $5,054 in Chicago
  • $8,099 in San Francisco

Clearly, we can’t present a truthful case for Boston being the cheapest big city to live in. It is certainly expensive to live in Boston. But if you are reading this, you clearly have some life circumstance that is bringing you to live in Boston. So let’s talk about why it is worth every penny.

Why Boston Is Worth the Money

It’s tempting to take time to discuss the various aspects of everyday life in Boston, such as:

  • Arts
  • Food
  • Beer
  • Nightlife
  • Schools
  • Events
  • Sports

However, the truth is that every major city in the United States offers a lifetime worth of options in these categories, so it would be disingenuous to imply that Boston can claim superiority here. But this doesn’t mean Boston doesn’t have any way to stand out from the crowd.

“Downtown” Boston – a City of Neighborhoods

07The standard for discussing any city is to evaluate desirable locations in terms of their proximity to “downtown.” The closer you are to downtown, the more expensive the real estate becomes. Being close to downtown theoretically puts you closer to job opportunities, as well as social outlets and leisure options.

Boston certainly has a traditional downtown, but you don’t have to live anywhere near it to enjoy employment and leisure opportunities. Boston is a city comprised of dozens of neighborhoods that all possess their own unique character. Each neighborhood offers a mix of stores, restaurants, outdoor living and entertainment that others can’t match.

If 08you do work downtown, the “T” can get you to and from work quickly and easily. Of course, you always have other options as well.

Walkability

Getting around Boston is easy, with several options at various levels of expense. To get where you need to go, you can keep a car in Boston a lot more easily than in most of New York City. If you don’t want to maintain a car, Boston’s mass transit system is useful and efficient.

These options add to your monthly living costs, but you can easily get around town on bike or by foot, and neither of those options cost a dime — after the cost of the bike and nominal maintenance, of course. This isn’t just some generic advice, either.

09In a study conducted by the Center for Real Estate and Urban Analysis at George Washington University, Boston was ranked as the third most walkable city in the country. Furthermore, Boston claimed the top spot in the study’s projection of future walkability growth.

Across the country, urban redevelopment has focused on higher density and mixed real estate development. This trend has transformed not only urban city centers, but also suburban neighborhoods that had previously been car-centric.

What does this mean? As cities are being revitalized, city planners and developers are prioritizing a “neighborhood” feel. In these “walkable” neighborhoods, we can take care of all of our needs without getting in a car and driving to a suburban shopping complex.

If you live in one of these neighborhoods, you can do your grocery shopping, drop your kids off at day care and have a nice dinner or a couple of drinks all within an easily walkable distance from your residence. The Boston area already boasts a large number of these neighborhoods, and the data suggests that this number will grow much faster than in most other big cities.

Population Density

The “big city that feels like a small town” is entirely an urban legend. When you pack a million or more people into one urban area, it is impossible to make it feel like anything other than what it is — a really crowded place.

However, some cities definitely feel more crowded than others, because those cities definitely are more crowded than others. As of 2010, Los Angeles was the most densely populated urban area in the country. San Francisco ranks second, with New York falling to fourth. Chicago checks in at number 14.

Where does Boston rank? 35th place — right behind Cleveland and Kansas City. So when you consider that Boston ranks right up there with New York, L.A. and Chicago in any discussion of the “best” cities in the United States, no matter the metric, remember that it’s less crowded than Milwaukee (30) or Buffalo (31).

What’s Next?

Boston is a fantastic city to live in, offering a wonderful quality of life for all of its residents. While there is certainly a price to be paid for being right in the middle of the action, it is certainly money well spent.

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After you do your research and gather all of the relevant information, you should be narrowing down the areas of Boston you are considering for your apartment search. When it comes time to initiate that search, the wing-and-a-prayer approach probably isn’t going to work in Boston. Let us help you. Browse our listings and let the friendly agents at Boston Luxe find a great place at a reasonable price.

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