New York City’s Manhattan borough is the most expensive place to live in the United States, a new report shows.
The finding comes from the Council for Community and Economic Research’s Cost of Living Index, a measurement of regional price differences in the “cost of consumer goods and services for professional and managerial households in the top income quintile.” A composite score of 100 is the national average, with the cost index comprised of categories such as housing, utilities, grocery items, transportation, health care and miscellaneous goods and services.
The report finds that living costs in Manhattan are 122% higher than the U.S. average. Compared with the second and third most expensive areas of Honolulu and San Francisco, the cost of living in Manhattan is 24% and 31% higher, respectively.
Driving Manhattan’s first-place ranking are costs associated with entertainment, dining, alcohol and, most of all, housing. CoStar data shows that among the top 10 most expensive neighborhoods in the U.S., seven are in Manhattan, with the average rent in the entire borough costing $4,300 per unit.
New York City, as the financial capital of the world, contains the most billionaires and millionaires, with the latter growing at a rapid pace. This level of wealth, and the city’s glacial pace of adding new housing, has allowed some owners to push rents considerably beyond what they would be willing to do under normal circumstances. For instance, a recently built building, 111 Charles St., in Manhattan's West Village, is nearly fully occupied with apartments reportedly ranging in rent between $7,000 to $43,000.
In fact, the high costs of living in Manhattan have created a cost spillover effect, with the boroughs of Brooklyn and Queens now among the most expensive places to live. Brooklyn claimed the fourth spot, beating out cities such as Boston, Washington, D.C., and Los Angeles. CoStar data shows that rents in the neighborhoods of Williamsburg and Downtown Brooklyn both top $4,100 per unit. Queens claimed the 13th spot, aided by rents in Long Island City, which top $3,850 per unit.
Other parts of New York failed to make it among the least expensive places to live, which instead include urban areas in southern Texas, Oklahoma and Mississippi.