Houston Is Now Less Affordable Than New York City?!

“There are three kinds of lies: lies, damned lies, and statistics.” -Mark Twain

This week the big Houston ruse was uncovered – the illusion unveiled. I know you’re thinking I’m talking about a certain baseball team, but I’m talking about Texas Monthly’s expose that Houston is less affordable than New York City. Evidently Houston has been suckering millions of people to move here with the false promise of affordability – and they all fell for it! (I guess because they’re all bad at math?) Suckering that many people has to be one of the greatest frauds perpetrated in history, right? Well played, Houston, well played. But now the truth is out and it’s all going to come crashing down.

As news gets around, hundreds of thousands of Houstonians will soon be putting their house on the market to move to NYC. Why wouldn’t they? Clearly it’s cheaper to live there. Texas Monthly and an “unbiased” nonprofit say so.

“Martha, call our real estate agent: we’re selling the home and moving the family! It says right here we can give up our four-bedroom house and two SUVS, move to a one-bedroom apartment in the Bronx, and come out ahead!”

“Oh Bill, that’s a great idea! I’m so ready to trade in the Escalade for standing-room-only subway rides – we’ll save a fortune! But what about the taxes?”

“Well, it doesn’t look like the study says anything about taxes, so they must not be an issue in New York…”

April Fools came early this year. Thanks, Texas Monthly.

Now we can move on to the dry, fact-based part of the response to the study:

There is absolutely no normalization of size or quality of what people get for what they pay – all they look at is what people are actually spending. In NYC, you might get a cramped apartment with roommates vs. your own house in Houston. Same with the transportation: tax-subsidized subway fares (and those taxes are ignored in the calculations) vs. your own nice car/truck/SUV.
By the calculations in this study, if you move from NYC to Houston and spend the tax savings on a better house and car, your life got worse because their percentage of your income went up! ?
Conversely, using the methodology of this study, NYC can zoom up to #1 by jacking up their taxes high enough to leave less than 40% of income available to their citizens for housing and transportation!
As I’ve said on this blog before, spending on a luxury vehicle (including depreciation) is *not* a basic cost of transportation, yet they include it in their figures. A person can get around Houston quite cheaply with a used Toyota Prius if they choose to. The fact that lots of people choose to splurge their extra discretionary income on a nice ride does not mean Houston is an expensive city to get around! The same line of thinking would say that people in West Hollywood spend a lot on clothes, so they must not have access to affordable clothing! ?
According to this study, if you move from Houston to LA, you’ll actually save money! Could that be because, after taxes, you’ll just have less money to spend?
Also according to this study, if you move from Houston to San Francisco, you’ll reduce housing and transportation from 49% of your income to 42% of your income! And yet for some reason, masses of Houstonians don’t seem to be picking up and moving to San Francisco?

And some additional facts courtesy of Wendell Cox, a fellow Fellow at our Center for Opportunity Urbanism

Comparison of the costs of living in Houston vs. New York (MSA)

The test of whether one metropolitan area is more expensive than another is the cost of
living – the cost of all goods and services, not only housing and transportation. The latest regional price parity (RPP) data from the US Department of Commerce, Bureau of Economic Analysis indicate that the New York metropolitan area has an RPP of 122.3 for all items (100.0 being the national average). The Houston metropolitan area has an RPP of 101.7. The cost of living for renters is thus 20 percent higher in New York than in Houston.

Other factors would make this difference even more. The just-issued 16^th Annual Demographia International Housing Affordability Survey indicates that the median house cost in
New York is 50 percent more expensive than in Houston (comparison of the Median Multiple, the median house price divided by the median household income). This is a bigger difference than among renters, with New York median rentals being 30 percent higher than in Houston, according to the 2018 American Community Survey.

Also, state and local taxes are far higher in New York than in Texas. According to 24/7 Wall Street, New York taxation is about two thirds higher than in Texas. New York has the highest state and local taxes according to this analysis, while Texas ranks 45^th.

Finally, just a self-reflection question for Texas Monthly: are you still actual critical-thinking journalists, or just clickbait publishers now?…

Tory Gattis is a Founding Senior Fellow with the Center for Opportunity Urbanism and co-authored the original study with noted urbanist Joel Kotkin and others, creating a city philosophy around upward social mobility for all citizens as an alternative to the popular smart growth, new urbanism, and creative class movements. He is also an editor of the Houston Strategies blog.