Here are the most and least affordable cities in the US. Is your city on the list?
As Sioux Falls, South Dakota, Mayor Paul TenHaken is preparing to deliver his State of the City address Wednesday, he can add another accolade to a growing list: the most affordable city in the U.S.
That's according to GoodHire, a background-screening software company that examined several factors, including wage growth, unemployment rate, job growth, job openings, rental prices, real estate sale prices and real per capita personal income.
"It's welcome news," TenHaken told Paste BN about the recognition. "You can come here and live a pretty normal life."
Using 2021 data from the U.S. Census Bureau, Bureau of Labor Statistics, Bureau of Economic Analysis and the Commerce Department, GoodHire analyzed 155 cities with workforces of more than 150,000 people to find the most affordable and least affordable places to live and work in the U.S.
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And Sioux Falls, with a population of slightly more than 200,000 residents, topped the list. TenHaken attributes his city's affordability to steady growth and solid incomes.
The city averaged nearly 4,000 new residents in the past two years, the latest census figures show. It also has a low unemployment rate of 1.8%, 9% sales tax growth year over year and a stable median household income of nearly $60,000, according to the census.
TenHaken also notes that most Sioux Falls businesses remained open during the pandemic, which led to increased tourism while other parts of the country suffered through tough stretches.
"We don't have the feast-or-famine swings as they do on the coasts," TenHaken said. "We've managed to do well, even during the leanest of times."
Sioux Falls is one of the many surprises on the most affordable list that consists of cities that typically don't make headlines, GoodHire CEO Mike Grossman said.
Grossman said the COVID-19 pandemic saw more Americans move from large metro areas to smaller places as many of their employers adopted more work-from-home or hybrid employment arrangements.
A large number of those now-remote workers were looking for a new adventure in a new city, he says.
"I think it's interesting because big cities usually get a lot of attention," Grossman said. "This is a very varied list.
"Not all Americans are interested in moving to New York City, Chicago, Boston or Los Angeles, and this study is a prime example of why. If you peek at the top 10, you’ll find a number of cities that fly under the radar."
Reno comes in a close second
Just behind Sioux Falls on GoodHire's most affordable list is Reno, Nevada. The "Biggest Little City," with a population of more than 264,000 residents, is known for its casinos, conventions and proximity to the San Francisco Bay Area.
Just two years ago, Reno was considered among the least-affordable cities in the U.S., according to real estate site RealtyHop.
But this year, GoodHire said Reno has the best market for job seekers of any of the cities on its list based on the number of job opportunities, earning potential and housing affordability.
The annual median household income in Reno of $58,790 is comparable to Sioux Falls, the latest census figures show. And according to the Economic Development Authority of Western Nevada, Reno's average annual salary rose to $64,000 in 2021.
The rising income coincides with a recent analysis by the EDAWN that said the Reno-Sparks-Lake Tahoe area is thriving in the wake of 59 companies, mostly tech and manufacturing, either relocating to the area or expanding in the past two years.
The growth is expected to bring 5,600 new jobs over the next five years, the EDAWN said.
"Despite the pandemic, our region has continued to grow," EDAWN CEO Mike Kazmierski said in a report. "More importantly, we are attracting quality companies bringing the higher paying 'jobs of the future' to our region. The continued development of our advanced manufacturing and technology sectors will continue our diversification efforts."
Grossman said Reno is a perfect example of the regional growth that is attracting those who can opt to relocate and work from home.
"What we’re expecting is an acceleration to move elsewhere for the economic advantages," he said.
Grossman added that the top 10 cities also reflect some Americans' desire to live in more spacious locales.
"The working world has changed permanently, and even if the pandemic recedes, it’s a new normal," he said.
Affordable housing in Reno becomes harder to find
With success, however, comes challenges.
The median price for an existing single-family home in the Greater Reno area reached $545,000 in December, breaking the previous record of $540,000 set in October, according to data from the Reno/Sparks Association of Realtors. The average sale of a home in Reno reached a record high of $567,000 in November.
Reno now has an affordable-housing problem, said April Conway, a spokeswoman for the Reno Housing Authority.
"While it's great that Reno is growing like gangbusters ... with lower-income housing availability, we're having more and more difficulty finding clean and safe places for (people) to live," Conway said.
Conway is hopeful that $9 million in American Rescue Plan Act funding that was recently approved by the Reno City Council will help residents in need of housing. The city is partnering with the Veterans Administration to build a complex for vets. That's scheduled to break ground by summer, and it's revamping a controversially closed downtown motel as a new home for low-income residents.
"With rising labor and supply costs, we don’t know how far it will go, but we’re going to do our best," Conway said. "Every little bit moves the needle. The more we can build, the better we can serve our community."
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Least affordable cities include Los Angeles, New York City
GoodHire also revealed the least-affordable cities and, not surprisingly, New York and Los Angeles made the list. But while Los Angeles is ranked No. 1, New York comes in at No. 8, as much smaller cities are ranked more expensive than "The City that Never Sleeps."
Those are Bakersfield and Modesto, California, and the Texas cities of Corpus Christi and El Paso.
The list shows that just because a city is smaller doesn't mean it is more affordable, said Sam Radbil, a content strategist at GoodHire.
"Cities like Bakersfield, Rockford, El Paso might have more expensive housing costs and lower wage growth and potential earnings, making them as unaffordable as larger cities where workers earn more to offset housing costs," Radbil said.
Most affordable cities list includes 3 Utah cities
Here is GoodHire's full list of the most affordable cities.
1. Sioux Falls, South Dakota
2. Reno, Nevada
3. Provo, Utah
4. Madison, Wisconsin
5. Huntsville, Alabama
6. Charleston, South Carolina
7. Fayetteville, Arkansas
8. Ogden, Utah
9. Salt Lake City
10. Spartanburg, South Carolina
Least affordable cities include Hartford and El Paso
Here is GoodHire's full list of the least affordable cities in the U.S.
1. Los Angeles
2. Hartford, Connecticut
3. Corpus Christi, Texas
4. Bakersfield, California
5. Shreveport, Louisiana
6. Modesto, California
7. El Paso, Texas
8. New York
9. Rockford, Illinois
10. McAllen, Texas