Illinois - Staying or Moving? (Chicago, Phoenix: 2015, crime rates, neighborhoods)

[numberfive]

Originally Posted by dtcbnd03

Let's compare Apples to Apples as far as major cities. Chicago is similar to NY, Boston, SF, Wash DC and LA. They offer similar jobs, arts, entertainment, public trans, restaurants, walkability, etc. I did not include Houston, Dallas, Atlanta, Denver, etc. because those are major sprawls with no public transpo. I went on CNN cost of living calculator and put in a starting salary of $100k for Chicago and here's the comparable salary you would need in other cities:

$100,000 in Chicago
$119,707 in LA
$122,719 in Boston
$125,559 in DC
$150,344 in SF
$194,320 in NYC

So Chicago is the cheapest (for right now). Once tax hikes it it will still be in line with other major cities and NY and CA have major pension underfunding too.

CNN money did not have a Chicago suburb toggle so I used the same Chicago toggle (which includes the city)...if you move out to the burbs (Naperville, St. Charles, Hinsdale, Arl Heights, Palatine) you have great schools and the trains can take you downtown to earn that top salary but you still need a car to get everywhere and the cost of living is as follows:

$100,000 in Chicago Suburbs
$74,871 in Knoxville, TN
$81,239 in Nashville, TN
$82,186 in Austin, TX
$82,874 in Charlotte, NC
$82,960 in Dallas, TX
$86,403 in Atlanta, GA
$82,358 in Phoenix, AZ
$94,062 in Denver, CO
$102,926 in Philly

I just don't think the burbs are for me. You lose everything Chicago has to offer like the lake, walkability, public trans, restaurants, entertainment, friends close by, etc. but keep the Illinois debt, traffic, cost of living, terrible winters, etc.

A question for those of you that moved from the city to the burbs...did you find that you started over making new friends once you moved to the burbs?

This is a good point, I was looking at burbs to burbs in my earlier comparisons. For those that don't give a hoot about "walkability" (we're a family of 4, so we'd be car-dependent even 6 blocks away), the Chicago burbs aren't favorable to the burbs of Atlanta, Nashville, or Dallas. Not by a long shot.

For Chicago proper, it depends on what you use and the relative value. You're paying an ultra premium for that walkability that you wouldn't have to pay in other metro suburbs. For us, being able to walk to a grocery store isn't worth an extra 10 years of cubicle time. Maybe for others it is.

[numberfive]

Originally Posted by Justabystander

Museums, restaurants, transportation, culture ( symphonies, concerts ) major airport connections ( Atlanta excluded ) universities, variety of living options (large city plus 200 plus suburbs). There are cultural amenities that I cannot put into dollars, like waiting in line at the post office in Franklin TN for two hours because many people work like molasses there. To each his own, but don't compare Nashville to Chicago apples to apples, or Atlanta for that matter.

Since all of the areas in question have all of those amenities, how do you objectively measure each from city to city? I don't think that's nearly as simple as you say.

It's a genuine question, I don't know how those would be measured.

[usagisan]

[quote=compactspace;44466398]If

Originally Posted by compactspace

It's true that the property taxes are going to rise, but it's also likely that the pensions will be renegotiated to make them viable.

The courts have repeatedly rules that you cannot diminish the current pension benefits - period. Do you understand how mathematically impossible this is? You have a situation where the pension money has to follow a set asset allocation formula plus an quality in grade standard. What that means is the split between equities and debentures (bonds) is fixed and the quality on the bond side is set in stone. One of the problem is, in this low rate environment for quality bonds is a significant portion of the portfolio is earning virtually nothing after you factor in inflation. So equities have to do the majority of the work, but their returns are depressed too and you cannot tilt too heavily to the equity side.

The most realistic scenarios show a real rate of return of about 2.75-3.5% - and here is the problem. Anyone who already collects a pension is guaranteed a 3% a year increase or the rate of inflation whichever is greater. That means, for those currently retired we are essentially funding their increases not from investment earnings but directly by tax revenue. And many state workers retire in their 50s, so you are funding this for 30-40-50 years depending on longevity. And for the rest you are looking at those 2.75-3.5 investment returns. You can't lump sum it all in a S&P500 index like you can in your 401K plan because of the mandated asset allocation.

So you cannot negotiate the pensions, you cannot earn a rate of return that is greater than the yearly mandated increases in benefits and the plans are all vastly underfunded in the first place. But to highlight, the biggest killer of all, is that guaranteed 3% annual increase in pension payouts.

[numberfive]

Great post, usagisan. What's the viability of sunsetting pensions? In other words, those with current plans don't have reduced benefits, and those that have accrued partial benefits don't lose what they've already earned, but new pension earnings are reduced?

Wouldn't that then be subtraction through attrition?

[IrishIllini]

Originally Posted by numberfive

Your link doesn't cover the Chicago metro area. Let's take a look at a source that does:

Chicago cost of living index: Moderator cut: link removed, competitor site

Nashville cost of living index: Moderator cut: link removed, competitor site


That means it's 17% more expensive to live in Chicago vs Nashville. Ouch.

Looks like a 19% spread there. Double ouch.

What makes you say that? Everything I've seen seems to indicate that the Chicago metro area is included. Obviously the Chicago metro area is more expensive than the rest of the state, but Chicagoland as a whole is far cheaper than any other comparable area.

[numberfive]

Originally Posted by IrishIllini

What makes you say that? Everything I've seen seems to indicate that the Chicago metro area is included. Obviously the Chicago metro area is more expensive than the rest of the state, but Chicagoland as a whole is far cheaper than any other comparable area.

I'm not saying you're wrong, but I don't understand the specifics behind why Dallas, Atlanta, or Nashville "don't count" as comparable metro areas, but New York or San Francisco are.

What's the standard in which all cities are evaluated equally?

[IrishIllini]

Originally Posted by numberfive

I'm not saying you're wrong, but I don't understand the specifics behind why Dallas, Atlanta, or Nashville "don't count" as comparable metro areas, but New York or San Francisco are.

What's the standard in which all cities are evaluated equally?

You were saying I was wrong. You said that the index did not factor in Chicagoland, which is false. The index does factor in Chicagoland. Even with Chicago's higher than average COL, the State of Illinois is still more affordable than most U.S. states. People seem to not realize that wages for skilled laborers are higher in places like Illinois than they are in Tennessee, Georgia, or Texas.

Have you been to Chicago, NYC, SF, Dallas, Atlanta, or Nashville? Maybe I'm wrong, but I feel like it's fairly obvious why Dallas, Atlanta, and Nashville aren't comparable to Chicago. Dallas, Atlanta, and Nashville all have their charm, but there's no comparing them to Chicago, NYC, and San Francisco. They are completely different places. The cultures, cultural amenities, built environments, and employment opportunities for high-skilled laborers exceeds those in Dallas, Atlanta, and Nashville. Dallas and Atlanta definitely pull their own economically, as does Nashville, but they're just not in the same league. The cultural amenities, economies, and lifestyles are just drastically different. Dallas, Atlanta, and Nashville don't have the same "big city hustle" that Chicago, NYC, and SF do. They probably never will.

[numberfive]

Originally Posted by IrishIllini

You were saying I was wrong. You said that the index did not factor in Chicagoland, which is false. The index does factor in Chicagoland. Even with Chicago's higher than average COL, the State of Illinois is still more affordable than most U.S. states. People seem to not realize that wages for skilled laborers are higher in places like Illinois than they are in Tennessee, Georgia, or Texas.

Have you been to Chicago, NYC, SF, Dallas, Atlanta, or Nashville? Maybe I'm wrong, but I feel like it's fairly obvious why Dallas, Atlanta, and Nashville aren't comparable to Chicago. Dallas, Atlanta, and Nashville all have their charm, but there's no comparing them to Chicago, NYC, and San Francisco. They are completely different places. The cultures, cultural amenities, built environments, and employment opportunities for high-skilled laborers exceeds those in Dallas, Atlanta, and Nashville. Dallas and Atlanta definitely pull their own economically, as does Nashville, but they're just not in the same league. The cultural amenities, economies, and lifestyles are just drastically different. Dallas, Atlanta, and Nashville don't have the same "big city hustle" that Chicago, NYC, and SF do. They probably never will.

You've already made your opinion clear, opinions are subjective. I'm asking for the objective criteria to measure amenities, like I've shown with the cost of living index, median income, overall tax burdens, etc.

So please share the objective criteria used to measure whether the amenities are "Chicago-class" or "Dallas-class". Answering this question should be based on data, not your opinion or mine about a specific metro area.

Hopefully that clarifies my still unanswered question to you.

[compactspace]

Originally Posted by dtcbnd03

How much higher can taxes go??? The answer is very high to fill the $111 billion pension hole. Chicago property taxes increased 50% and that only resulted in $500M to fill the $111 billion funding hole. Pensions can not...i repeat...can not be renegotiated without a constitutional referendum or bankruptcy. Chicago already tried to lower pension benefits and the Illinois Supreme Court said "No".

Are you with the Joffrey Ballet? I have a friend who's in the company.

For me I'm at that age where I'm close to settling down and starting a family which may require a move to the burbs at some point. Nothing against people in the burbs but that just sounds awuful. I'll be giving up all that Chicago has to offer while still keeping the debt. So that's what's driving my thought process to stay or move in the next few years.

You're right -- the constitution will need to be amended. That or the city (or its taxing districts) will need to declare bankruptcy.

Not with the Ballet, just a fan.

If my wife and I ever have a kid (no more than one), we've already budgeted for a private school. If we moved to our condo in Chi it would have room for the three of us, so that's not a problem. I know that many people can't afford either private schooling or enough space, so I can see why leaving the city (and hence the state) would be on the radar.

[compactspace]

Originally Posted by flamadiddle

compactspace, It's more than a few grand in taxes. A similar $500K home in the burbs of Atlanta, Nashville, Indianapolis, Cincinnati, etc, will have a $10K+ per year property tax differential (not including the higher sales tax, toll roads and other nickel and diming Illinois provides). Think about what that would add up to after 10 or 20 years of investing w/ compound interest!

Very true. But the way I see it, my wife would earn much less (I work from home) and running a car would make up for the price difference. Of course, everybody's different.