Money 2010

What It Costs to Live in Boston

HEALTHCARE

What We Pay vs. the National Average:
+12 percent. When figures from the Kaiser Family Foundation’s most recent study (2008) are adjusted for today, the average Massachusetts family shells out almost $15,000 in healthcare costs; nationally, it’s $13,375.

Why the Difference:
We’re blessed with great hospitals in these parts, but paying for the expertise and technology to pull off pricey procedures in fancy institutions drives up costs on mundane services, too.

HOUSING

What We Pay vs. the National Average:
+21 percent. According to the U.S. Bureau of Labor Statistics, the average Boston household, making $75,000, spends $20,677 per year on housing, compared with the national average of $17,109.

Why the Difference:
The Boston area (median home price $365,000) has always been a hot housing market. The city itself is packed with oh-so-appealing historic neighborhoods, while its affluent suburbs ooze with big earners paying their share into excellent public schools.

TAXES

What We Pay vs. the National Average:
-0.1 percent. Based on numbers from an annual study of large cities’ taxes — and adjusting them to reflect recent sales and property tax hikes here — a family of three in Boston, making $150,000, pays $12,455 (or 8.3 percent) in annual taxes. The national big-city median is about $150 higher.

Why the Difference:
Despite that “Taxachusetts” moniker, our tax burden is actually comparatively light, even after last year’s increases. The same family of three in places like Wichita, Kansas; Jackson, Mississippi; and Burlington, Vermont, for instance, would bear a heavier burden. Property taxes have always been on the low side here, and, unlike our friends in New York and Philadelphia, we don’t have to pony up for a city income tax.

ELECTRICITY

What We Pay vs. the National Average:
+49 percent. According to the U.S. Energy Information Administration, residential electricity rates in Massachusetts, which on average ring in at 17.4 cents per kilowatt hour, are almost 50 percent above the national average. (Go ahead — put down the magazine and unplug some appliances.)

Why the Difference:
Electricity costs across the Northeast are steeper for a variety of reasons, but the biggest is that, more so than in the rest of the country, much of our energy is generated from oil or natural gas (as opposed to, say, coal). That means that when global oil and gas markets are volatile—as they have been lately—we feel the pinch.

HEATING

What We Pay vs. the National Average:
+20 percent. That’s for those using natural gas. Bostonians warming their homes with heating oil pay 2 percent more than the national average, says the U.S. Energy Information Administration. And remember: On top of higher prices, we also have higher usage here.

Why the Difference:
Natural gas prices are high because the pipelines bringing the stuff into our homes are designed to carry an average (or a bit above average) load. In a city like Boston, winter’s bitterly cold days can spike demand, which strains the system’s capacity and makes prices skyrocket. Oil prices are more in line with those in the rest of the country because petroleum is typically delivered here by truck, not pipeline.

CLOTHING

What We Pay vs. the National Average:
+8 percent. According to the most recent study by the U.S. Bureau of Economic Analysis, clothes typically are more expensive here, even when compared only to prices in other big cities.

Why the Difference:
Retail analysts say the story here is our relative lack of big-box retailers like Walmart and Target, which tend to drive down prices in other cities. The behemoth national chains we do have also arrived later, explaining why Bostonians remain comparatively loyal to independent (and more expensive) “Main Street” retailers.

SPORTS TICKETS

What We Pay vs. the National Average:
+48 percent. Since seeing our teams play is, of course, an essential for any Bostonian, we calculated this figure by combining average ticket prices for our four pro teams and comparing that with the leagues’ combined averages. The Patriots (average: $118) and Red Sox ($50) have the second-most-expensive tickets in their respective leagues, and the Celtics ($69) and Bruins ($61) have the third-priciest.

Why the Difference:
Six titles in one decade ain’t cheap! The Celtics were one of seven NBA teams last year to pay a luxury tax (for exceeding a salary threshold), and the Red Sox routinely rack up payrolls north of $120 million. That cost gets passed on to us, but it hasn’t led to many empty seats at Fenway, Gillette, and the Garden, for Celtics games. (The Bruins’ prices? Well, that’s just baffling.)

WAGES

Boston vs. the National Average
+15 percent. And now for some good news: According to analysts at Needham-based Salary.com, Boston employers are among the highest-paying in the country. Those same analysts say that only workers in California’s Bay Area, the New York City metro area, and — go figure — Anchorage, Alaska, get a bigger bump.

Why the Difference:
Because of Boston’s aforementioned high costs of living, employers typically pay people more to work here. On top of that, the city’s populace is highly educated and, in large proportion, white collar, which drives up our earnings.