Let’s get this obvious fact out of the way up front: The typical “best” and “worst” lists are subjective. They also vary vastly, according to the criteria used to compile them.
For instance, Forbes magazine’s list of the best cities for renters is based on data gleaned from a real estate firm and the criteria includes average rents, annual change in rents, cost of rent versus the cost of a mortgage, and vacancy rates in the nation’s top 43 metros.
Time Magazine, on the other hand, chose its best cities for renters based solely on affordability.
Finally, Business Week editors based their choices on lifestyle criteria, such as the number of restaurants and bars, libraries and residents with college degrees.
As you can no doubt guess, the three magazines came to vastly different conclusions. Forbes chooses Tucson, Ariz. to top its list, because of its low monthly rent and the fact that it’s cheaper to rent a home there than to buy.
Time Magazine editors think Des Moines, Iowa is the best U.S. city for renters. It got the nod mainly because of its ranking as one of the highest “overall performing cities” during the recession. Its low cost of living also factored heavily into its nomination.
Business Week is partial to Raleigh, N.C. The high number of restaurants, bars and cultural institutions sets it apart from other cities. Good schools, large universities and entertainment options rounded out the criteria.
If you’re looking for that perfect city in which to rent a home, your list of priorities won’t match mine or anyone else’s. It’s a safe bet, though, that affordability is somewhere near the top of your list.
The 5 Most Affordable U.S. Cities for Renters
Experts use a range of criteria when determining a city’s affordability for renters, but typically they use a formula that includes how much of the average renter’s income is spent on housing. This is the formula that formed the basis for a recent study by the Joint Center for Housing Studies of Harvard University, and here are five cities they determined to be the most affordable for renters:
Des Moines, Iowa
The editors at Time Magazine chose Des Moines as the most “Affordable U.S. City for Renters” back in June of 2011. The magazine cited the city’s low unemployment rate, healthy economy, good schools and low cost of living as the reasons for crowning it number one.
The Harvard University study places it lowest on their Share of Severely Cost-Burdened Renter Households ranking. Financial advisors typically agree that renters should spend no more than 30 percent of their income on rent. If they pay more than 50 percent, the household is considered cost-burdened. While the 30 percent figure is a challenging goal to attain, fewer than 18 percent of Des Moines renters pay more than 50 percent of household income on housing and utilities.
Located in the southern, central part of Pennsylvania, Lancaster has a population of 59,322. With a median household income of $32,737, according to the most recent census, most of the area’s jobs are in the healthcare and manufacturing industries.
Lancaster’s median rent is $640 per month. When compared to some of the nation’s costlier cities, such as San Jose, California with an average rent of $1,635 or New York where they pay $3,038, renting in Lancaster is a downright bargain.
According to the 2010 census, Ogden’s population is 82,825. The census also tells us that the median household income in the city is $34,037 and the median gross rent is $675. Not only is Ogden an affordable city in which to rent, its cost of living overall is far less than the U.S. average.
If you live in certain regions of the country, Ogden is familiar to you because every year you address your tax return to an address in the city. Ogden is home to one of the largest Internal Revenue Service facilities in the country and employs over 5,000 Ogden residents.
Ogden has a young population, with the average resident in his or her late 20s. If you’re young and you love outdoor recreation, Ogden may be the perfect city for you.
El Paso, Texas
In addition to its low rents and amazing weather, El Paso is also ideally situated for the outdoor enthusiast. Franklin Mountains State Park, the nation’s largest urban park, offers residents the chance to get outdoors and rock climb, hike, mountain bike and camp.
In 2010, an independent research firm, CQ Press, named El Paso the Safest City in the United States (among cities with populations of 500,000 or more).
Finally, as if you needed another reason to consider moving to El Paso, Texas has no state income tax, saving you yet more money.
The median gross rents in El Paso are $618.00 per month.
Not a name a lot of outsiders can pronounce (WOO-STAH if you want to sound like a local). Worcester is a city filled with parks, universities, colleges and unique neighborhoods.
Worcester’s population stands at 181,045, as of the last census, with the average household bringing in $45,036 in income per year. The median monthly rent in this city is a bit higher than the other four we’ve discussed – $833 – but it’s still a bargain compared to other cities its size.