This post originally appeared on Orphan Road.
SeattleBubble just posted some very interesting numbers for the 25 most populated cities in the US. There are a few lessons from this set of data, but my favorite is how cheap this city is – as dense cities go. Click on the “Density” tab, and we’re #8. Our Income/Rent ratio is 5 – much higher than most of those above us. The next cheap city is all the way down at Denver – with a bit over half the density we have.
Of course San Francisco nearly catches us with an I/R of 4.9 and is over twice as dense as us, so although we’re less expensive, if you want density at a reasonable price you may consider SF.
Owning is a completely separate matter. While owning a home is much cheaper (per income) here than NY, LA, or SF, anywhere else more dense than us is a better deal. And housing in Detroit – just one under us in density – is practically free (seriously, $25k for a house? are they missing a zero?).
Why does any of this matter? Well, there’s the human aspect of wanting to be paid well yet not paying a fortune for housing and still living in a city. But what I see in these numbers is the drivers of density. To create density we need an attractive place to live and enough supply. Lumped in with an “attractive place to live” is income and cost of living, which includes rent. The price of housing alone doesn’t tell you much, since this can be offset by income. But an I/R ratio exposes this piece of “attractive place to live”. Of course, as a city becomes more dense it’s harder to meet housing demand with supply, so rents go up. So we expect I/R ratios to drop with density. The fact that ours is still high shows that we’re a comparatively attractive and affordable city, at least by this measure.