Rochester’s affordability edge

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The fact New York has one of the most onerous state and local tax burdens is mentioned so often, it’s a wonder anyone still lives here. The latest reminder came right after Thanksgiving, when USA Today published a list of the states where Americans pay the least in taxes. New York ranked dead last.

Gov. Andrew Cuomo dismisses such analyses as old numbers. He has a point; the most frequently cited report, from the Tax Foundation research organization, uses 2012 tax-year data. Cuomo argues that New York has lowered middle-class, manufacturing and corporate tax rates to levels not seen in decades.

Even so, I’ve yet to hear Cuomo argue that New York has a lighter tax burden than most states. And with the Democrats now controlling the governor’s office and both houses of the state Legislature, some New Yorkers are concerned about the prospect of higher taxes. In one of her first post-election statements, the new leader of the state Senate, Democrat Andrea Stewart-Cousins of Yonkers, felt compelled to try to put those fears to rest.

State and local taxes no doubt contribute to outmigration from New York. Still, most residents of the state—and our region—each year opt to stay. In fact, the metropolitan Rochester population has been quite stable over the last two decades.

Quality of life and other non-financial factors often get credit for retaining residents and drawing new ones. But what if money also is part of the equation? Is it possible the high-taxes narrative is only part of the story?

I think so. Why? Because the Rochester area scores high in a key economic metric: affordability.

It’s widely recognized that Rochester is a great place to buy a home. The Demographia International Housing Affordability Survey, which is based on data from the U.S., Australia, Canada, China, Ireland, Japan, New Zealand, Singapore and the United Kingdom—in 2017 found Rochester to be the most affordable major housing market in any of those countries.

What about overall affordability? Each year, the federal Bureau of Economic Analysis releases data on personal income and the cost of living in U.S. metropolitan areas. The most recent numbers show Rochester is less expensive than the national average and has a decided edge over big cities on both coasts.

Read Mark Oney’s post: “Why our Silicon Valley startup chose Rochester.”

The BEA’s regional price parities index compares the costs of goods and services. The Tax Foundation translates the data into a yardstick that’s easy to understand: the real value of $100 in metropolitan areas. The figure for Rochester in 2016, the most recent year for which data is available, is $102.04.

Source: Tax Foundation

How does that compare to other cities? The value of $100 in New York City is $81.97. In Boston, it is $90.01. In San Francisco, where my brother lives, the figure is $80.19. He’s got the better view from his house, but I have a 27 percent purchasing-power advantage.

Even when compared to comparably sized cities, Rochester does well. We have the edge on Salt Lake City ($100.60), and are not far behind Raleigh, N.C. ($104.28), and Richmond, Va. ($104.06).

Taxes matter, and high rates can be particularly hard on older residents with fixed incomes. But overall affordability is a big factor too—especially for young adults and families, and for entrepreneurial firms that need an ample pool of younger, skilled workers.

For years, Rochester was shedding millennials, and it still has fewer than most large metros as a percentage of the total population. But when Texas-based Headlight Data analyzed Census Bureau data for 2009 to 2014, it found Rochester had the biggest percentage increase of millennials—and the gains have continued. This fits with a broader trend of Americans moving to metro areas with a population of 250,000 to 5 million.

When I recently skimmed Greater Rochester Enterprise’s website, I found brief mentions of Rochester’s affordable housing and health care in its Quality of Life section. In the Rochester Chamber’s “We #ROC: 100 Reasons to Love the Rochester/Finger Lakes Region,” any reference to Rochester’s affordability was so well hidden I couldn’t find it.

Maybe it’s time to do more to tell the story of Rochester’s affordability edge?

 

5 thoughts on “Rochester’s affordability edge

  1. I’m a Rochester resident and agree that it’s a very affordable city compared to most. Lately I’ve seen some renovating of old buildings and a few companies move in.
    My biggest concern is the downtown area.
    We need to continue to grow it and add some real jobs in order to continue to develop it.

  2. I live downtown. It’s a much more dynamic place than it was even a few years ago. Anyone who tries to hire technology savvy talent these days knows how hard it is. The majority of salaried jobs being created are in software and tech, but orgs like GRE are zeroed in on manufacturing, which often represents entry-level jobs (needed also but just one piece of the pie). The state has the same bias- there are virtually no incentives for businesses based on intellectual property because the aid is focused on capital equipment expenditures. I agree that these agencies should be screaming quality of life when promoting our area. And making sure they note that we have major cushions against climate-related disasters….

  3. I’m an “Active Near-Senior” who loves living in Rochester. I first discovered Rochester by getting assigned to the Coast Guard Station in the ‘70’s. Lived here afterwards, but disappeared for ten years due to college and subsequent job offerings in Indianapolis and Chicago. But, I was always spending my vacations back here in the Finger Lakes. Eventually, I smartened up and returned in 1991 for keeps. As a bicycle tour guide, I frequently host guests from out of state who have “something to say” about our taxes and cost of living. Your article helps support my argument about what a great deal it is to live here, so I added a link to it from my blog. Nice work … hope you get plenty more views. Thank you.

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