Reasons to Choose: Cost of Living

HOUSING PRICES HAVE LONG BEEN A KEY TO THE LOWER COSTS OF LIVING IN KANSAS CITY, BUT THERE ARE OTHER FACTORS THAT MAKE LIFE HERE A COMPARATIVE BARGAIN.



It spoke volumes about how Kansas City is perceived by people on the East Coast: In June, the USDA announced that it would be moving two of is divisions out of the Washington D.C. area, bound for Kansas City. And as Ag Secretary Sonny Perdue was breaking that news to an auditorium of staff members, roughly half stood up with their backs to him in protest.


The average price of an existing home in Kansas City this spring was $240,000. In New York? The same home would run you an additional $500,000. That's a lot of dough to lay out for quick access to a fresh bagel at 3 a.m.


For some, the silent protest will morph into new lines of work as they cling to life in the District of Columbia. But it turns out that what they
don’t know—at least about the cost of living on a federal salary—is going to hurt them. In the wallet. If they want a better life, they might want to think about rates and availability on moving vans.

When it comes to cost-of-living trends, the bad news is that it’s getting more expensive, no matter where you live. The good news, for residents of the Kansas City area, is that even if it costs more to put dinner on the table today, the costs are lower relative to national
averages.

Nearly a decade ago, the cost of living index for this region stood at 97.7, compared to the national average of 100. The most recent figure: 95.5. So while everyone most everywhere feels the pinch of inflation, each year, we’re actually down 2.2 percentage points relative to the rest of the nation.

Once again, the Kansas City Value Proposition comes shining through. The big driver, as always, behind that is the cost of housing here. This year’s index put Kansas City at 88.9, nearly 11 full percentage points below the national average. Think about that for a moment: the average selling price of an existing  home in the Kansas City market in May  2019 was about $240,000 according to the Kansas City Area Association of Realtors.
Compare that to a locale like New York, with a whopping 388.9 housing indicator. That same house, assuming you could cram it into Manhattan, would run better than $763,000. That’s a cool half million-plus to build into the mortgage payments. It’s easy to see why an employee can relocate from the Big Apple to Kansas City, perhaps accept a cut in pay, and still enjoy a considerably higher standard of living.

It’s easy, of course, to cherry-pick the stats of big cities like New York, San Francisco and Boston. But the Kansas City value holds up well compared to housing markets in Chicago, Seattle and Portland, which are all roughly a third more expensive. The broader index, taking into account utilities, transportation, groceries, health care and miscellaneous costs, still show those bigger venues as being at least half again as expensive, and sometimes twice the cost of living in KC.

Savvy employers locked in a nationwide search for talent are able to leverage Kansas City’s advantage to land the true players. We do cede a bit of ground on the costs for transportation and miscellaneous goods, with indexes of 100.8 and 105.1, and we’re holding our own on  utilities, matching the national average of 100.

But we also pick up advantages in health care (97.0 index) and groceries—living in the center of the ag sector’s value chains for beef, pork, poultry and grain contributes mightily to a score of 94.8, a discount of more than 5 percent compared to the nation’s average grocery bill. And those factors add up.

For years, law firms, engineering and architecture firms and other professional services based in Kansas City have been able to use the lower cost structure to compete with firms on either coast. In a global economy, more companies outside those sectors are experiencing the same advantage.