Out of all of the world’s cities, New York City surprisingly does not have the most unaffordable rental market. In a report released by RENTCafe, Mexico City beats Manhattan as the worst urban area for renters, with 60 percent of their income being spent on housing. However, Manhattan continues to be extremely unaffordable, with residents putting 59 percent of their income toward rent. Affordability levels are not much better in the three other U.S. cities that made the list; Chicago, San Francisco and L.A. have rent-to-income ratios of 38, 41, and 47 percent respectively.
Cities of Opportunity, via PwC and RENTCafe
RENTCafe used a report by the global professional services firm PwC that ranked the world’s best cities to work and live. The report, called Cities of Opportunities, ranked the 30 best by analyzing at indicators like infrastructure, intellectual capital, sustainability and ease of doing business. Then RENTCafe took this information and found out the amount of money people earn in these cities and whether their salaries were enough for them to afford rental apartments. They examined the average rent of each market and median incomes to calculate the rent-to-income ratio for every city of opportunity.
If housing costs exceed 30 percent of a household income, they considered this rent-burdened. If cities boast an average rent of 30 percent or less of the median than the report says the household income is burden-free. The group then divided the remainder into moderately burdened at 31 to 50 percent rent to income and severely rent burdened at over 51 percent of a household’s income.
According to the data, Kuala Lumpur, Moscow and Johannesburg are the three most affordable cities of opportunity. In the original ranking, these cities sat at 20th, 22nd and 24th place respectively. Overall, the data shows that renting an apartment in more than half of the world’s greatest cities of opportunity won’t cost you more than 30 percent of your income. And while affordability is obviously a draw for many, unfortunately, the economic opportunity may be greater in cities with higher rents, like New York, London, and Singapore.
Discover more about the most affordable cities of opportunity here.