Earn a better salary or move cities
In a 2016 Global Cities Business Alliance report examining the effect of high housing costs in relation to earning potential, Beijing was the least affordable city in which to live. In China’s capital, average housing costs account for more than 100% of net earnings, suggesting that it is impossible for a worker earning an average salary to live alone in typical city accommodation.
Where in the world do you pay the highest rent? Surprisingly, it’s not Tokyo or Stockholm but San Francisco. Of the 15 cities examined in the report, titled “Housing for Inclusive Cities: the economic impact of high housing costs”, San Francisco’s 2015 monthly rentals rated as the world’s most expensive, averaging at $2,824. New York and Abu Dhabi followed closely with average rents of $2,629 and $2,460 respectively. The report examined the economic impact of high housing costs and income, and its knock-on effects on businesses and social wellbeing across 15 cities. High housing costs in global cities often contribute to longer commutes. The report found the cheapest monthly rentals in Mexico City and São Paulo at $385 and $480 respectively. At 113 minutes per round trip, those living in Mexico City also had the longest average commute among the cities studied. Second and third places went to Beijing and Shanghai, with daily commutes running to 104 and 101 minutes respectively.
Only one of the 15 focus cities – Boston – has normal rentals swallowing no more than 30% of average net income. The difference? Although the average cost of housing in the city is relatively high, Boston wages are correspondingly high.
Beijing, Abu Dhabi and Hong Kong are at the opposite end of the spectrum. Although the amount spent on housing in these cities is lower, average wages are lower, too.
Words Kim Maxwell