Cost of Living Ranking: Income And Standard of Living in 253 Cities

New cost of living ranking compares gross incomes needed to afford the same standard of living across 253 different U.S. cities. A new algorithm by Warheit Ventures is taking the guess work out of cost of living ranking. 

Wahrheit Ventures is pleased to release the latest findings from a new method of cost of living ranking.  The information is derived from the patent-pending technology behind its recently launched mobile application: City Vs City.

Most cost of living ranking tools  are based on an index of average costs over widespread metropolitan areas.  The City Vs City algorithm significantly narrows down these cost comparisons by specific ZIP Code, with each matched with the most equivalent ZIP Code area found within every other city[1]

Check out the below video for a quick illustration of how the cost of living ranking works in real-time.

Watch on YouTube and check out our daily city match-ups here.

Comparisons Based on Gross Income

The City Vs City app and the resulting cost of living ranking bases the  calculations on the pre-tax income a household must earn in each location to cover equivalent after-tax spending habits.

The first step is calculating the difference in after-tax spending between the two chosen cities. Afterward, each of the locations’ various state and local taxes are reverse engineered. As a result, we arrive at the gross income needed to afford other cost-of-living parameters.

Much like the City Vs City app, the ranking was developed to answer a simple question.

“How much does a household need to earn before taxes in another city to maintain the same lifestyle currently enjoyed in their current city?”

cost of living ranking

Answering The Question

Researchers at Warheit Ventures used the app’s algorithm to compare and rank every city covered by City Vs City. They started by establishing a subject city and ZIP Code and entering realistic spending habits for that location. Then, they adjust the after-tax spending and savings until the gross income equaled $100,000.

The baseline was set at a married couple living in a two-bedroom home within the 33rd most expensive ZIP Code as determined by median home price in the metropolitan Denver area.

This couple would have to earn $100,000 before taxes to afford their overall spending habits. This baseline was then compared against the equivalent ZIP Code found in the 252 other City Vs City metropolitan areas. As a result, Warheit was able to produce a ranking of all the cities.


cost of living rankingWith this ranking, one can determine what the married couple in Denver would need to earn before income taxes if they were to move to any other city in the ranking.

For an example, let’s examine if the couple were to move to the city with the highest cost of living ranking Manhattan, NY.

When compared with Manhattan, the married couple would have to earn $303,600[2] to afford the same type of lifestyle they currently enjoy in Denver.

At over $300,000, that’s more than 3 times their current $100,000  Denver gross income.

This includes owning a two-bedroom home in a ZIP Code that is the same cost relative to other Manhattan ZIP Codes as their Denver ZIP Code is relative to all other Denver ZIPs (33rd).



What About Variables In Lifestyle?

Of course, it could be reasonably argued that a move to more expensive city might require budgetary sacrifices. In reality, the couple might rent a home instead of buying one. Or they might downsize to a less expensive, smaller home.

However, that would not constitute an equivalent standard of living. This type of sacrifice is called “substitution” in calculations of inflation rates. An oft-used analogy references it as “substituting hamburger for steak.”

For the purposes of objectivity, substitutions are not utilized as part of the equation. These are decisions reserved for the individuals who are deciding where to trim the budget once they have been provided with unfiltered math.

A Sample Ranking

cost of living rankingClick Here For our Complete List of 253 Cities Ranked By Cost of Living! 


There is little doubt the hypothetical Denver couple might want to consider the hamburger for steak substitution. Especially after they check out the unfiltered cost of living math of living in the other highest ranked cities.

This substitution may continue to be appealing in consideration of those cities ranked higher than Denver. However, the couple is far more likely to consider going with steak for hamburgers given the comparative cost of other cities in the ranking.

Remember that Denver serves as a “baseline” and not a median. With a ranking of 44, more than 200 cities provide a bigger bang for the pre-tax buck needed to live the equivalent lifestyle enjoyed by the Denver couple.


Steak for Hamburgers

McAllen, Texas bookends the bottom of the ranking at number 253. Our Denver couple could move to the equivalent ZIP Code area in McAllen. There, they would only need to earn $63,400 to maintain a similar standard of living.

Compared to the $100,00 needed in Denver, that is, 36.6% less. In all, fourteen cities offer the Denver couple an equivalent standard of living below $70,000. Another 56 offer the equivalent at between $70,000 and $75,000.

Lansing, Michigan at number 127 is the median city in the rankings. Lansing provides the equivalent standard of living at $81,700. This which is still about 18% less than needed in Denver.

Overall, the difference in achieving the same standard of living between Denver and the highest and lowest ranked cities ranges from plus-203% for Manhattan to minus-36.6% for McAllen, Texas.

These eye-opening numbers are just a few of the insights offered by a careful analysis of the rankings. In fact, analysis of the rankings reveals dozens of interesting facts about the cost of living in the profiled cities.

For example, the top 20 cost of living cities come from four states:

  • California
  • New York
  • Massachusetts
  • Hawaii
  • and Washington, DC.

cost of living ranking - 4 states


Analysis also lends support to the effectiveness of the methodology behind both the City Vs. City app and new ranking system derived from it.

Importance of the Tax Calculations

Consideration of just the “taxation” component of the rankings provides interesting cost of living insights between the cities. It also supports the algorithm’s treatment of taxation for the app and resultant rankings.

As previously noted, City Vs City starts by calculating the equivalent after-tax costs between two cities and then reverse engineers the various taxes. Additionally, by combining all forms of taxation together, the unique tax structure of each place is standardized. This allows for an effective comparison between the two cities.

These factors allow the City Vs City ranking to be based on a comparison of the gross incomes needed in each location to afford the same after-tax spending. They also provide the rankings with an extra level of real-world intersection not factored by other cost of living ranking systems.

This helps make the City Vs City cost of living ranking system one of the most comprehensive and realistic currently available.

Below are just a few of the significant taxation-related insights that were discovered during our careful analysis:


  • Total taxes (income, property, sales) as a percentage of gross income range from 25% (Casper, WY) to 45% (Manhattan, NY).
  • Total taxes as percentage of gross income range between 32%-45% for the top 20 locations in the ranking.
  • In 102nd ranked Dallas, TX, where there are no state income taxes but high property taxes, the total tax bill is $24,600. This is 29% of the $84,000 of gross income needed to maintain the same lifestyle as Denver.
  • We can confirm the belief that California and New York residents pay higher taxes. To generate the same standard of living in Coastal Los Angeles (fifth-ranked city), all forms of taxes represent 38% of gross income. This is an amount that would be 40% in Brooklyn (fourth ranked), and just over 41% in Nassau County, NY (ninth ranked).

The ranking’s inclusion of the taxation component provides evidence that this parameter is an essential factor in comparing cost of living.

Compounding Effects of Taxes

This is due to the compounding effect that taxes have on the amount that a household must earn to maintain the same standard of living.

If taxes were not a factor, the results would show that a move from Denver, CO to San Francisco, CA would require $52,600 (78%) more spending.

Because taxes are a factor, it realistically shows that a household would need to earn $109,000 (109%) more gross income to cover the $54,000 increased spending requirements.



Similarly, a move from Denver to Washington, D.C. requires 31% more spending, but 41% more gross income. Imagine if you were negotiating a salary for a new job in D.C. and used a cost of living calculator that applied the 31% to your current salary, instead of correctly arriving at 41%?

Other Revelations

The rankings also show that high-tax locations tend to have more expensive after-tax spending requirements to live there. It’s not exclusive to high income taxes either. Locations with more expensive housing usually have higher property taxes, requiring more income to afford those extra costs.

This extra income is typically taxed at higher rates .Generally, the more you make, the more tax you pay. This provides another good reason why cost of living ranking systems need to account for taxation.

There is a way to demonstrate the importance of differentiating between pre-tax income needs and after-tax spending. This is illustrated by looking at the 11th and 17th ranked cities.

Washington, D.C.(11) and 17th ranked Seattle, WA (17) have nearly identical after-tax spending requirements ($87,600 and $87,200, respectively). However, Seattle requires $13,000 less in pre-tax earnings thanks to its absence of a state income tax.

Importance of Housing Cost Calculation

Further analysis of the ranking data lends significant support for other benefits provided by the City Vs City app and resultant rankings. For example, the rankings show actual dollar amounts for major spending categories.

This is especially important when accounting for housing costs (whether monthly rent or mortgage payments). The algorithm doesn’t just apply the same percentage of gross income across cities.

The algorithm locates the median price of the same size home across all 253 equivalent ZIP codes. The last step is calculating how much income is needed to cover each location’s housing costs. This is based on each location’s tax environment.

This information is especially important to know in urban areas where housing constitutes a household’s highest after-tax spending item.

This is demonstrated by examining housing costs as a percentage of gross income. New York City’s Manhattan has the highest at 34.2%, while Davenport, Illinois has the lowest, at 8.4%.

The 14.8% average is held by Wichita Falls, Texas, while our baseline city of Denver is at 20.1%. Generally, housing is the highest after-tax spending item for locations with percentages above 19%.

The numbers also support the idea that every extra $1,000 needed for housing requires pre-tax earnings of $1,500. For this reason, an extra 50% premium must be achieved before attempting to move to a more expensive housing market.

Importance of Accounting for Marital Status

cost of living rankingFinally, our ranking and the City Vs City app algorithm demonstrates that pre- and after-tax income amounts favor married couples. This holds true across the spectrum of different metropolitan areas.

This is largely a factor of tax saving benefits offered to married couples, which helps them receive a much bigger overall bang for their cost of living buck.

Our baseline Denver married couple pays roughly $16,500 in federal taxes on their $100,000 of gross income. However, a single person living in the same ZIP would pay $21,000.

This, and other taxation factors, leaves the married couple with an after-tax income of $67,200.  However, the Denver singleton will earn $63,000. In New York City’s Manhattan, the married couple pay $75,500 in federal income taxes. Compare this with $84,700 owed by the singleton.

The married couple ends up with $166,800 in after-tax income, compared to only $160,400 by the single person. The same scenario plays out in McAllen, Texas, where the singleton pays $11,700 in federal income taxes. The married couple owes $8,600.

This helps result in $46,800 in after-tax income for the couple compared to $44,100 for the singleton.

Conclusion: The Most Accurate Cost of Living Ranking System

Based on the above and an examination of other cost of living rankings; Wahrheit Ventures believes it has developed the most comprehensive and realistic cost of living ranking available.

This ranking serves as an excellent first step to review accurate cost of living differences between 253 U.S. metropolitan areas. The City Vs City app can be further utilized to determine precise cost of living differences. This includes a complete picture of differing taxation structures, between two different metropolitan areas.

Download the City vs City App from the Apple App Store Here


[1] “City” as referred to in this document includes high-population locations designated as distinct “metropolitan areas.” For example, Nassau County, NY; Fairfield County, Connecticut; Boston Suburbs North; and New York City—Bronx-Yonkers.

[2] Most figures have been rounded.