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I'll start. Iowa is billed as having a low cost of living, but it really does not when you look at the overall picture.
- High state income tax (making 64K puts you at the top bracket of 8.98%) State taxes: Iowa
Only making $12,952 puts you at 6.12% The lowest threshold in the country to pay such a percent.
- Higher property taxes than Beverly Hills, even in rural Iowa
* Property taxes for a 250K house will cost you approx. $5,251 per year in East Peru, IA. Included a link to an excel calculator ran by the state and an LA times property tax rate table. Using the Beverly Hills rate of 1.087422%, you'd pay $2700 there on a house of the same price. This is just property tax.
- A "per weight" car registration system, even an old car will cost you a lot to register Kiplinger.com
From 2006, meaning, it's only gone up.
- Most of the year you have to pay high energy bills. Very cold in winter, hot in summer, and the fall months are cold enough you have to run some heat. Late March/April, maybe first half of May, the weather is very pleasant and you'll be ok with no air/heat. Then you'll have to run air most likely, and September gets 30s/40s some nights.
- Rent is high. I was paying $750 my last year at Univ. of Iowa for a small 1-bedroom apt (in an older building) close to campus. In Des Moines, it's not quite as high, but still higher than most larger midwestern cities.
- Houses are also expensive, even with all the seemingly infinite space available
- Education is expensive, using community colleges as baseline, $46 per credit in California for a resident (the land of high cost of living), it's $125 in Iowa. Almost 3x the price to get a basic education.
- Sales tax is lower than most places, around 6% depending on city. Because people see this lower sales tax, they automatically believe that transfers to overall lower cost of living. It never shows up any lists for high cost of living, simply because it doesn't register on anyone's radar as an expensive place to live.
Where else are some surprisingly expensive places to live?
Last edited by tollfree; 10-08-2012 at 11:58 PM..
Reason: certain links weren't showing up correctly
Arizona is an affordable state overall but there are some hidden expenses. Like in the desert cities(Phx,Tucson)you pay for AC in the summer and the electric bills can be surprisingly high especially if you have a larger home. Some people pay between $300-$400 a month on electric bills in the summer. Car registration and car insurance is on the high side as well because there are so many uninsures motorists. Other than that property taxes are cheap. The sales tax is a little high if you ask me but no one asked me so I'll keep quiet about it.
The salary to rent ratio is high (low wages versus disproportionately high rent), and commodity prices such as food, gas and utilities are fairly high too. Homeowners insurance is high due to the perceived "threat" of a mass devastation hurricane by the bloodsucking insurance companies that are still underwriting policies in the state. Also prepare to pay high auto insurance rates due to the large numbers of uninsured motorists here. In addition substantial out-of-pocket health insurance costs are likely for many, with the workforce here overwhelmingly part-time and service industry-based.
The problem with your comparison between property taxes between Beverly Hills and East Peru, IA is that you can actually buy something for $250,000 in IA. Looking at Realtor.com there are several listings at that price range which will land you in a 4 bedroom home on 49 acres in East Peru, IA, whereas looking at Beverly Hills there are zero listings for that price range, you can get a 1 bedroom apartment for $500,000 though.
I think you are trying to spin a few numbers, ie... why would you choose a tiny town of 125 people in IA to represent the entire State? Looking at the information available right here on C-D shows how flawed your example is. Picking Des Moines instead of East Peru would at least be a better comparison. Average rent in Des Moines 2009 = $681 and average home/condo price = $120,300 with the average income being $42,718. Beverly Hills average rent $1791, average home/condo price = $845,757 while the average income was $81,188. Want a city that is almost the same population as Beverly Hills? Try Marion, IA Average rent $576, Home/condo $144,474, Income $55,938. So, just how is IA so much more expensive?
Overall there is just way too much information out there to dispute your claim that IA has a high cost of living. This page is from Missouri but gives COL for all the States, Ranked lowest COL to highest, IA is #11 overall. Sure if you look hard enough you can find anomalies in every State, but to paint an entire State using those numbers is disingenuous at best.
North Carolina. There are a lot of low-paying, service related jobs here (ie: minimum wage of $7.25) and the cost of living in a lot of areas of the state is disproportionately high when the low wages are taken into account.
A lot of Northerners / Westerners seem to be enticed toward North Carolina for it's seemingly low cost of living- but the fact is, the wages are also a lot less. In my experience, a lot of the Midwest is cheaper than a lot of areas in NC. I obviously moved here because of my husband- but I too (mistakenly) thought for some reason that NC would be cheaper because it was 'The South'. 3 of the popular city choices in NC (Raleigh, Asheville, Wilmington) are all more expensive than the national average when it comes to COL.
A lot of Northeasterners think that NC is THE place to be and I've never understood why. I get that the weather is nicer but it's so different. I'm glad I chose Atlanta over Charlotte. Not knocking NC, but it was way too different there (not to say that Atlanta's not extremely different either).
Only making $12,952 puts you at 6.12% The lowest threshold in the country to pay such a percent.
- Higher property taxes than Beverly Hills, even in rural Iowa
* Property taxes for a 250K house will cost you approx. $5,251 per year in East Peru, IA. Included a link to an excel calculator ran by the state and an LA times property tax rate table. Using the Beverly Hills rate of 1.087422%, you'd pay $2700 there on a house of the same price. This is just property tax.
Hawaii and Beverly Hills have lower property tax rates because they have astronomical housing prices.
that's generally how it is -- local government is like a fixed cost. Housing may be 5x more expensive in Beverly Hills vs, Iowa, but it doesn't require Beverly Hills 5x more in property taxes to keep the government running.
A lot of Northeasterners think that NC is THE place to be and I've never understood why. I get that the weather is nicer but it's so different. I'm glad I chose Atlanta over Charlotte. Not knocking NC, but it was way too different there (not to say that Atlanta's not extremely different either).
Actually, the cities in NC aren't that much different than Northern cities of a similar size. With that said, it is definitely the South.
The problem with your comparison between property taxes between Beverly Hills and East Peru, IA is that you can actually buy something for $250,000 in IA. Looking at Realtor.com there are several listings at that price range which will land you in a 4 bedroom home on 49 acres in East Peru, IA, whereas looking at Beverly Hills there are zero listings for that price range, you can get a 1 bedroom apartment for $500,000 though.
I think you are trying to spin a few numbers, ie... why would you choose a tiny town of 125 people in IA to represent the entire State? Looking at the information available right here on C-D shows how flawed your example is. Picking Des Moines instead of East Peru would at least be a better comparison. Average rent in Des Moines 2009 = $681 and average home/condo price = $120,300 with the average income being $42,718. Beverly Hills average rent $1791, average home/condo price = $845,757 while the average income was $81,188. Want a city that is almost the same population as Beverly Hills? Try Marion, IA Average rent $576, Home/condo $144,474, Income $55,938. So, just how is IA so much more expensive?
Overall there is just way too much information out there to dispute your claim that IA has a high cost of living. This page is from Missouri but gives COL for all the States, Ranked lowest COL to highest, IA is #11 overall. Sure if you look hard enough you can find anomalies in every State, but to paint an entire State using those numbers is disingenuous at best.
Using the state-provided excel calculator, Des Moines itself comes out to $5,154 on a 250K house - this has nothing to with yard size. It's property tax based on the assessed value of the entire property, which yes, the yard size can play a factor in ascertaining the final value.
In Marin County, a mountainous Bay Area suburb packed with sleek, expensive homes, the median household income is $88,101, and homes are valued at a median $912,100, with a median annual property tax of $5,233, more than four times the national average. It's the same story in Santa Clara County, Calif., where taxes are $4,437, and San Mateo County, Calif., where the annual bill is $4,208.
912K house in CA, still costs less than 250K house in Iowa on property taxes. Yes, the cost of homes is lower in Iowa overall, but that doesn't mean you can't find expensive homes in Iowa.
What I'm saying is, Iowa has a disproportionate amount of price anomalies compared to other "low cost of living" states. You ignored the state income tax as well. They only look at average home prices, and that is it. Not all of CA is SF or LA. There are places like Temecula as well, which offer a good standard of living, good schools, and home prices are comparable to midwestern cities.
Find another state that wants 6.12% from someone making only 12K a year. You won't be able to. The reason Iowa is always low on "cost of living" lists is because researchers don't even bother looking into it.
It's the usual suspects (NY, LA, SF, Boston, Seattle), maybe throw in Vermont to mix up the list, and it's basically the same re-arranged list every year.
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