The Cost Of Living Crisis Hits Hard In These 8 Cities Where You Need To Earn At Least $100K To Live Comfortably

There was a time when earning a six-figure income was considered a career high point. Not anymore. In fact, earning $100,000 per year in many American cities is just enough to get by, according to new data from Zillow Z.

The listings and analytics company calculated that to afford the typical apartment rental in many American cities, residents need to earn $80,000 per year, up from $60,000 five years ago. However, in pricier cities such as Boston, Los Angeles, Miami, New York, San Diego, San Francisco, and San Jose, earning $100,000 annually is considered the minimum for renters to survive. 

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Six Figures Is The Minimum

"Today, renters need to make six figures to afford the typical rental in eight major metropolitan areas — twice as many as before the pandemic,” Kara Ng, senior economist at Zillow, told CBS News. “That means renters have less money in their budgets for essentials like groceries and transportation, or for saving for a down payment."

The increasing cost of living in major cities aligns with the spiraling homeless epidemic. The Department of Housing and Urban Development stated in a report: "Between 2023

In 2024, 39% more people in families with children experienced homelessness. Overall, the number of people experiencing homelessness increased by 18%."

“This Zillow data backs up what every renter has been feeling when they’ve been looking for an apartment or trying to renew their lease,” Rachel Fee, executive director of the New York Housing Conference, a nonprofit that advocates for affordable housing, told CBS News. “Not just in New York City, but across the country, the cost of housing is skyrocketing, and they just can’t keep up."

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New York City Is The Most Expensive City In America

Unsurprisingly, New York is the most expensive city in America to live in. Zillow calculates that an income of $135,000 is needed to rent in the Big Apple. Although the end of broker fees, due to happen this summer, will alleviate some of the burden, the average rent in NYC is still $2,950, 59% higher than the national average, Zillow found.

The 30% Rule

The basic rule of thumb for affordability, accepted in calculations by many lending institutions, is the 30% rule  —  i.e., to spend no more than 30% of your pre-tax income on rent. So, for someone earning $100,000, your rent should be no more than $2,500. Financial guru Dave Ramsey factors in take-home pay to draw a similar conclusion, advising his followers to spend no more than 25% of their post-tax pay on rent.

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Some Cities Are Still Affordable

Zillow found that many smaller cities in the Midwest and in New York State were eminently affordable. Buffalo, New York, requires an income of $55,000, and Oklahoma City requires an income of $56,000 to afford to live there. Additionally, as rents are not too expensive here, tenants would likely spend around 23% of their income on rent,  Zillow Senior Economist Orphe Divounguy writes, allowing for a better cost of living.

Housing Shortage

Housing affordability had been one of the central themes in the last election. It still remains to be seen what the new administration will do to increase housing inventory and affordability, which is tied to developer interest rates.

"Renters across the country are looking to Washington for relief, and Congress has yet to take any meaningful action to increase affordable housing supply," Fee told CBS News.

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