Is Pittsburgh Really the Most Affordable City in the World?

A blog about business and economics.
Jan. 28 2014 2:28 PM

What's the Most Affordable City in the World?  

81437436-the-pittsburgh-skyline-during-game-six-of-the-2008-nhl
The Pittsburgh skyline.

Photo by A. J. Messier/Getty Images

Pittsburgh is the most affordable city in the world. At least it is according to the method used by Demographia International (PDF) in a report that really only surveys a handful of countries. But Pittsburgh is, at least, the most affordable city in the United States of America.

I think it's a little bit hard to say whether the methodology chosen really makes that case. What it did basically was look at the ratio of the median home price in any given market to the median income in that market. You can see why this is helpful for doing international comparisons, but I don't like it very much in a domestic context. It carries the unfortunate implication that San Francisco could increase its "affordability" by deporting all the low-income workers to outside the metro area boundaries, thus raising the median household income. Conversely, it ignores the fact that average homes may be of different sizes in different places. If the median home in Dallas is twice as large as the median home in Pittsburgh, but costs 10 percent more, then Dallas is more affordable than Pittsburgh, not less.

Methodological quibbles aside, I think this at least gives you a decent approximation. Its 10 most affordable cities of Pittsburgh, Detroit, Atlanta, Cleveland, St. Louis, Kansas City, Dallas, Minneapolis, Houston, and Charlotte, N.C., are among the most affordable cities in America. Conversely, Hong Kong and San Francisco are very expensive. The policy bottom line is that "the affordable markets are generally characterized by liberal land use regulation"—by which the authors mean "liberal" as in "not too strict" rather than "liberal" as in "left-wing."

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Last but by no means least it's worth noting that the affordable cities list here is kind of a grab bag. Detroit may be affordable, but it's also a city in crisis. Pittsburgh, by contrast, is a great rust-belt economic success story with an economy reoriented around health care, technology, and education. Houston and Dallas are adding people at staggering rates. It's some very different paths to affordability.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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