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Comment by legodt | Hacker News Reader

But a lot of those professions can't afford rent inside the city and are forced into unwieldly commutes and lose out on the benefits of being in a city

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Sure they can, have you never lived in a mid sized city? Those horrendous commutes are more common to large cities that can't support the population demand. Mid sized cities don't have that problem as much.

There are plenty of suburbs within a 10-20 minute driving distance from the city. Also, businesses operate in those surrounding suburbs.

I like mid sized cities. Not too large, not too small, but just right.

I'm baffled as to why this was downvoted. It's a perfectly reasonable opinion.

The average rent for a two-bedroom apartment in San Antonio is $1200 (the seventh largest city in the nation). The median home price is $228k, so with a median income of $51k that means the average person would be paying 21% of their gross income towards housing costs, well within the range of "affordable."

It seems very strange to compare gross income to housing costs and deem a situation 'affordable'. When FICA and Federal income tax is subtracted from that $51k ($9,800)[0], we're left with $41,000 of net income.

I pay around $1600 monthly for a $227,000 house in Austin, so the housing cost would be $19,200 / $41,000 or _46%_ which is absolutely not 'affordable.'

[0]https://smartasset.com/taxes/income-taxes#1DOWfkzhx3

A rule of thumb (admittedly arbitrary) for housing is to keep costs below 30% of gross income. That is why I compared median housing prices against median gross income.

If someone making the median income in a city can afford a median house with 21% of their gross income, yes, I deem that "affordable."

To go back to my example, the family making $41k net annually is paying $10,800 (ish) annually in mortgage costs. They pay an additional $4,781 in property tax annually. That leaves $25,419 annually or $2,100 monthly for other costs and savings.

My example makes plenty of assumptions that won't necessarily hold (after all, I'm assuming averages here). Notably, I'm assuming a 20% down payment and excellent credit. And no, that's not a lavish lifestyle. But it's well within the realm of "affordable" for an average person.

I'll also note that $228,000 is the median price, but a search on Zillow shows >1500 listings for less than $150,000. I saw one listing for 3bd/2ba at $135k within the loop. near decent schools and within 20 minutes driving distance of downtown, the USAA and Valero corporate campuses and the UTHSCA medical center, all major employers.

I don't really see what your example has to do with my point. Yes, Austin is more expensive than SATX. Yes, someone making $51k should not pay $1600 a month in housing cost. But you're making my point for me—housing costs in medium-large cities are not necessarily out of whack average incomes in all such cities, just some markets (like Austin).

Honest question... where does the 30% income/housing ratio come from? I always assumed it was pushed by the housing industry to "con" us into more housing than we need.

That's why I called it arbitrary.

https://www.bloomberg.com/news/articles/2014-07-17/housings-...

I was using it as a starting point.

Excellent link, thank you.

I tend to agree. The bottom line (and very obvious) is that the more spent in any one budget category, the less available for all other categories--housing included. My wife and I shoot for no more than 20% in order to ensure we can meet our other financial goals. We have paid as high as 46% (in San Diego), which simply wasn't workable.

A lot of it is enforced by landlords. Go apartment hunting, and they'll all tell you they'll only lease to you if the rent on the unit is less than 1/3 your gross income.

The whole point of smaller cities is, they are more affordable. Those professions will have a better time of it than in a larger city.

But what happens when very few of those professionals can afford to live in the big ones?

The price goes up for folks living there? And then plumbers can afford to live there. Its good old supply-and-demand freemarket principles at work.

I think there's a tradeoff. Smaller cities should be more affordable, but there is less labor mobility, leading to higher economic risk. If a person finds themselves in even a moderately specialized occupation, and loses their job, there might not be another job for them unless they move to another city.

Thus they either have to deal with periodic un- or under-employment, or manage the risk by building a cash cushion, either of which means a less affluent lifestyle.

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