Why the Cost of Living is So High in Many Coastal Cities

Looking to move to the coast? Well, regardless of whether you move to the East Coast or the West Coast, you’ll likely be paying quite a bit more in cost of living expenses.

Cities such as New York, Los Angeles, San Francisco, San Diego, Boston and Washington are featured prominently on lists of U.S. cities with the highest cost of living. You’ll also likely see other suburban areas near these cities mentioned (such as Stanford, CT or Orange County, CA). In fact, Honolulu is the only city to consistently make the Top 10 lists for highest cost of living index that isn’t located in California or the northeast. (Of course, Honolulu has unique factors such as population density and an island location driving up living expenses up).

So why is a dollar earned in Dallas worth three quarters in New York? Let’s take a closer look at what goes into these inflated costs of living.

New York

New York has the highest Cost of Living index in the United States (Image courtesy: Johanes Valkama/flickr)

High Populations and High Costs

Many of the cities with a high cost of living have the highest populations in the country. Others are based in some of America’s most populous metro areas.

Since Census data is updated less frequently than media market size data, let’s look at a 2012 estimate on U.S. metro area size from ratings giant Nielsen. The New York metro area ranks first, while Southern California (the Los Angeles area) ranks second. Other high cost of living hubs such as the San Francisco Bay Area, the Washington, D.C. area and Greater Boston are also in the top 10 of Nielsen’s list.

Golden Gate Bridge

The San Francisco Bay Area is one of the most highly populated regions in the U.S., which might help explain the high cost of living there. (Image courtesy: www.frontenddeveloper.com)

This shouldn’t come as any great surprise. A greater proportion of people in a specific, concentrated area leads to greater demand for services. Higher demand taxes service providers (such as supermarkets or electric companies), and providers must often raise prices to compensate. Add congested roads and public transit systems to the mix, and daily transportation costs will end up higher in these areas than they are in other cities across the country.

But cost of living isn’t directly tied to population. If it were, the Dallas-Fort Worth Metroplex, Greater Houston, Chicagoland and the Atlanta area would be ranked closer to the top of cost of living lists. In reality, certain other metro areas of Texas (the second most populous state in America) are actually ranked among U.S. cities with the lowest cost of living. So what gives?


The widespread cultural appeal of cities such as New York and Los Angeles (pictured) help keep the cost of living consistently high in these cities (Image courtesy: Rupert Ganzer/flickr)

Demand and Appeal

Many of the coastal cities with high costs of living have high housing prices and rent prices, even if there’s room for new suburban housing to be built in the region. This factor bucks the general economic trend of prices primarily rising when supply is low.

In truth, the demand is still sky high in these areas — even if supply growth (current and potential construction of new houses and apartments) hasn’t yet been capped by geographic constraints. In fact, thousands of people move to cities like New York and Los Angeles from other parts of the country (or other countries around the world) each year. These new residents are drawn to these cities not only for the jobs but also for the entertainment.

And that’s not all. The name value of a place such as Los Angeles or New York draws in lots of new residents to these areas each year. People who grew up in a tiny town in Nebraska or a large city in Georgia have probably heard about the lights of Broadway, or the glitz and glamour of Hollywood. They might not have heard about the Fort Worth Stockyards or Chicago’s Willis Tower.

The demand driven by name appeal helps keep the cost of living high in many large cities on both coasts. This concept has a greater upward impact on a city or metro area’s cost of living than other factors do — such as the housing market or other living expenses.

So if you’re considering moving to the northeast or California, and wonder why it’s so darn expensive to live there, understand that the prices are a reflection of thousands of other people having the same idea as you. If you believe in strength in numbers, this trait along might make taking the leap to the East Coast or West Coast well worth it for you.

If you’re looking to move across the Dallas-Fort Worth Metroplex, or across the country, look no further than Garrett’s Moving and Storage. We’ve moved thousands of satisfied customers since 1992.  To get a free moving quote, click here or call 972-487-5843.

Why the Cost of Living is So High in Many Coastal Cities was last modified: by
This entry was posted in Moving Stories and tagged , , . Bookmark the permalink.

Leave a Reply

Contact Us

  • This field is for validation purposes and should be left unchanged.




Enter your email address to subscribe
to this blog and receive notifications
of new posts by email.