Why the ‘Cheapest U.S. Cities’ Ranking is Misleading

Sold HomeGeographical rankings are a little problematic because they often attempt to grade cities, states, or countries on one factor without considering other variables. While technically there might be some merit to the order, the list may not tell the whole story.

That’s certainly the case with a new list published by Kiplinger titled ‘The 10 Cheapest U.S. Cities to Live In’. The rankings were based on data published by the Council for Community and Economic Research, an organization that calculates cost of living in urban areas across the country by measuring housing prices, transportation, healthcare, utility rates, and even grocery bills. Towns or municipalities with less than 50,000 residents were not considered.

According to the Council’s findings, the ‘cheapest’ city in the United States is Harlingen, Texas. Situated between the Rio Grande and the Gulf of Mexico, this town’s 66,000 residents enjoy a cost of living that falls nearly 20 percent below the national average. Stuff comes pretty cheap in Harlingen; the median value of a home is $77,900, while only two other cities in the country boast cheaper groceries. Sounds pretty idyllic, right?

However, the ranking fails to take one thing into account: Harlingen’s poverty rate exceeds 30 percent, while the median household income falls short of the national average by $17,500.

How does that work? It’s simple math, really. ‘Affordability’ as it relates to a city’s cost of housing, utilities, and other necessary expenses is directly influenced by average household earnings of that city’s residents. In other words, the cities where people earn the lowest wages are also, generally speaking, the cheapest places to live. If you get on the right side of the income gap, you’ll be living pretty nicely.

I’m not trying to suggest at all that Harlingen is a crummy place. On the contrary, it sounds pretty lovely. The average temperature fluctuates between 50 degrees Fahrenheit in the winter and 95 degrees in the summer, and the city is home to the World Birding Center. Nice things could also be said about McAllen, Texas, a city that lies roughly 40 minutes from Harlingen and was ranked second on Kiplinger’s list. McAllen is home to the Quinta Mazatlan, a historic Spanish mission, as well as numerous bike trails and public parks — and notably, the cost of living is 14.6 percent below the national average. However, the median annual income in McAllen is $13,000 below the U.S. average household. Noticing a pattern here?

The exception, it seems, is Norman, Okla., which ranked third on the list. Unemployment and cost of living in Norman are both low, while median incomes are somewhat high. The town is also home to the headquarters of the National Weather Center, which is a welcomed establishment in the heart of Tornado Alley. But then we move onto Memphis, Tenn., the fourth ranked city. The average home costs less than $100,000, but the median household income is just a shade above $37,000.

The rest of the ‘Cheapest Cities’ list follows this trend pretty closely. The average household income earned in the remaining six cities — Fayetteville, Ark.; Pueblo, Colo.; Wichita Falls, Kan.; Springfield, Ill.; Conway, Ark.; and Idaho Falls, Idaho — is $42,006, more than $8,000 below the national average. And not surprisingly, the cost of living falls at least 12 percent below the U.S. average in all six. One usually follows another.

Kiplinger has produced some excellent articles (including many informative rankings) over the years, so this isn’t a slight against the publication. But when it comes to the ‘10 Cheapest U.S. Cities to Live In’, the title of the list only tells half the story.

 

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