- People have been fleeing major cities like New York and San Francisco during the coronavirus pandemic.
- A new report from financial technology firm Self Financial analyzes the US cities where residents have to work the most hours just to pay their rent.
- The top spot goes to the San Jose metro area in California, which is known as the capital of Silicon Valley.
- In the San Jose-Sunnyvale-Santa Clara metro area, residents need to work 68 hours per week at the median wage to afford rent for a typical one-bedroom home.
- The list also includes the San Francisco, New York, Seattle, and Austin metro areas.
- Visit Business Insider’s homepage for more stories.
As the US continues to battle the coronavirus pandemic even as states reopen, large cities with high costs of living may be losing their appeal.
During the pandemic, more than 420,000 people left New York City for places like the Hamptons and upstate New York. Houses are flying off the market in the suburbs of Connecticut and New York. The pandemic has accelerated the trend of people fleeing cities for less dense areas with lower costs of living, as Business Insider’s Aria Bendix recently reported.
New York isn’t the only major city that saw an exodus. Rents in the San Francisco Bay Area plummeted in May as tech workers left the city and many wealthy residents bought homes in wine country. As Business Insider’s Aria Bendix recently reported, large cities may be losing their allure as high-paying jobs transition to remote work and urban amenities are closed or limited – and that’s not to mention the high cost of living.
In many US cities, the average worker has to work far more than 40 hours per week to pay for a typical apartment. Self Financial, a Texas-based financial technology company, has compiled the US cities where residents have to work the most hours just to pay their rent. The report is based on data from Zillow, the US Bureau of Labor Statistics, and the US Department of Housing and Urban Development.
To figure out the number of weekly work hours needed to afford rent, Self Financial assumed that residents would work 52 weeks per year and spend no more than 28% of their gross income on rent. For this list, Business Insider focused on large metro areas with at least 1 million residents.
A metro area's cost of living is not always representative of the cost of living in its largest city. In the New York-Newark-Jersey City metro area, for example, Self found fair market rent for a one-bedroom apartment to be $1,613 - far lower than Manhattan's average one-bedroom rental price of $3,841 in April 2020.
Here are the US metro areas where the typical worker has the hardest time affording rent.
10. Portland-Vancouver-Hillsboro, OR-WA
Hours needed to afford rent (one-bedroom): 48.7 hours per week Hours needed to afford rent (two-bedroom): 56.5 hours per week
Fair market rent (one-bedroom): $1,289 Fair market rent (two-bedroom): $1,495
Median hourly wage: $21.80 Median annual wage: $45,350
Year-over-year change in rent prices: +4%
9. Seattle-Tacoma-Bellevue, WA
Hours needed to afford rent (one-bedroom): 51.1 hours per week Hours needed to afford rent (two-bedroom): 62.4 hours per week
Fair market rent (one-bedroom): $1,590 Fair market rent (two-bedroom): $1,943
Median hourly wage: $25.65 Median annual wage: $53,360
Year-over-year change in rent prices: +11%
8. Orlando-Kissimmee-Sanford, FL
Hours needed to afford rent (one-bedroom): 53.1 hours per week Hours needed to afford rent (two-bedroom): 62.3 hours per week
Fair market rent (one-bedroom): $1,064 Fair market rent (two-bedroom): $1,248
Median hourly wage: $16.50 Median annual wage: $34,320
Year-over-year change in rent prices: +5%
7. New York-Newark-Jersey City, NY-NJ-PA
Hours needed to afford rent (one-bedroom): 56.6 hours per week Hours needed to afford rent (two-bedroom): 65.1 hours per week
Fair market rent (one-bedroom): $1,613 Fair market rent (two-bedroom): $1,856
Median hourly wage: $23.48 Median annual wage: $48,840
Year-over-year change in rent prices: +6%
6. Miami-Fort Lauderdale-West Palm Beach, FL
Hours needed to afford rent (one-bedroom): 57.7 hours per week Hours needed to afford rent (two-bedroom): 72.7 hours per week
Fair market rent (one-bedroom): $1,243 Fair market rent (two-bedroom): $1,566
Median hourly wage: $17.76 Median annual wage: $36,930
Year-over-year change in rent prices: +8%
5. Boston-Cambridge-Nashua, MA-NH
Hours needed to afford rent (one-bedroom): 59.5 hours per week Hours needed to afford rent (two-bedroom): 72.6 hours per week
Fair market rent (one-bedroom): $1,850 Fair market rent (two-bedroom): $2,256
Median hourly wage: $25.62 Median annual wage: $53,300
Year-over-year change in rent prices: +5%
4. San Diego-Carlsbad, CA
Hours needed to afford rent (one-bedroom): 59.6 hours per week Hours needed to afford rent (two-bedroom): 77.5 hours per week
Fair market rent (one-bedroom): $1,566 Fair market rent (two-bedroom): $2,037
Median hourly wage: $21.66 Median annual wage: $45,050
Year-over-year change in rent prices: -1%
3. Los Angeles-Long Beach-Anaheim, CA
Hours needed to afford rent (one-bedroom): 60.9 hours per week Hours needed to afford rent (two-bedroom): 78.6 hours per week
Fair market rent (one-bedroom): $1,517 Fair market rent (two-bedroom): $1,956
Median hourly wage: $20.52 Median annual wage: $42,680
Year-over-year change in rent prices: +9%
2. San Francisco-Oakland-Hayward, CA
Hours needed to afford rent (1-bedroom): 65.5 hours per week Hours needed to afford rent (2-bedroom): 80.8 hours per week
Fair market rent (1-bedroom): $2,179 Fair market rent (2-bedroom): $2,687
Median hourly wage: $27.42 Median annual wage: $57,040
Year-over-year change in rent prices: +5%
1. San Jose-Sunnyvale-Santa Clara, CA
Hours needed to afford rent (1-bedroom): 68.0 hours per week Hours needed to afford rent (2-bedroom): 82.1 hours per week
Fair market rent (1-bedroom): $2,458 Fair market rent (2-bedroom): $2,970
Median hourly wage: $29.80 Median annual wage: $61,980
Year-over-year change in rent prices: +5%
