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Can You Afford to Live in Boston in 2018?

Originally posted on August 06, 2018 7:26 am
Updated on August 28, 2018 11:39 am

Median Annual Income Won’t Afford Suffolk County Apartments

We pulled data for 2-bedroom median rents across Boston ($2,700 for the whole metro area), and found many neighborhoods to be quite affordable, much more affordable, in fact, than Los Angeles and Miami, where nearly all neighborhoods had rents out of reach of the average household. Unfortunately for many Bostonians, these affordable neighborhoods are outside Suffolk County. To determine what is and is not affordable, RentHop data scientists used the most recent Census’ American Community Survey data for median household income as well as our own rental data.

The ACS data shows highly varying incomes across the counties that make up the Boston/Cambridge Metro Area. Suffolk median household income is estimated at $61,796, while Essex is a bit higher at $73,901. Middlesex was significantly higher at $95,249 as is Norfolk County at $92,696. The lower income in Suffolk County greatly contributed to its not being affordable, despite the most expensive neighborhoods in the metro area were in Suffolk County.

Some of our key findings this year include:

  • Of the zip codes we looked into, only 16% had median 2-bedroom rents exceeding half of the median household income. This is a stark contrast to both LA and Miami, where upwards of 54% of zip codes had 2-bedroom rents exceeding half of median household income.
  • It should come as no surprise that the most unaffordable neighborhoods to rent an apartment were near the center of Boston, where, with some exceptions, the 2-bedroom rental prices vastly exceed the incomes in the area.
  • The Seaport District (specifically zip code 02210) manages to simultaneously be one of the most expensive places to live from a median-rent perspective ($4,628), but with the incredibly high household income, still manages to masquerade as “affordable” with a median household income of $155,313. With such a high median household income, the high rents “only” cost 35.8% of said income.
  • Asking rents in areas like Washington Park (zip code 02121) and Mission Hill (zip code 02120) highlight the stark disparity between what people can afford and the real estate that’s currently available for rent. With a median household income of $26,313 in Washington Park and $29,592 in Mission Hill, the 40x rule would only allow for those households to afford 2-bedroom apartments costing $657.83 in Washington Park and $739.80 in the Mission Hill – prices far lower than the median 2-bedroom asking rents.
  • The Chinatown – Leather District neighborhood (zip code 02111) topped the list of least affordable neighborhoods with median rent of $3,600 per month, requiring $144,000 of annual income to afford. That’s over 200% of the Suffolk County median household income. Not too far behind was Fenway (zip code 02115), with income of $124,000 required to secure a $3,100 2-bedroom there.
  • Anything that is affordable? Neponset – Port Norfolk (zip code 02122) ($1,695 for a 2-bedroom), Downtown Woburn (zip code 01801) ($1,800), and Wollaston (zip code 02170) ($1,850) are all very affordable from a rent perspective.

The 40x Rule

Another metric we used to calculate what is and isn’t affordable is the 40x rule. This is the rule of thumb for most landlords in pretty much every major city. This guideline says that the household income must be at least 40 times the monthly rent. For example: 2-bedroom median rent across Boston is currently $2,700. A Boston household will need to make at least $108,000 combined for an apartment at that price. This is above any of the ACS estimates, even the more affluent Middlesex and Norfolk Counties.

There are exceptions to this rule: If you have vast savings or a guarantor whom makes 80 times the rent, a landlord is likely to let you slide without meeting the income requirements. It’s also not unheard of for a landlord to request last month’s rent in addition to the first month and security deposit for those with below average credit / income. Our “how much can I afford” guide can give you a little more info on these rules and some ways to overcome them.

So how much DO you need to make to live in a Boston neighborhood?

The Map Below Shows Income Required for a 2-Bedroom Apartment in Boston/Cambridge

The map above shows the cost of a 2-bedroom apartment in zip codes across The Boston Metro Area. We used data for the trailing 7 months as of August 1, 2018 to calculate the median asking rent and multiplied that by 40 to calculate the customary income requirement to rent an apartment. Median household income is all according to the Census American Community Survey table S1903.

If the data presented on the map doesn’t align with what you pay or makes you wonder how people can afford to live, that’s because we are only mapping current asking rents. Housing stock is fairly limited, and many people are locked in at lower rents negotiated in the past.

What Are the Least Affordable Places to Live in Boston?

The Chinatown – Leather District neighborhood (zip code 02111) topped the list of least affordable neighborhoods with median rent of $3,600 per month, requiring $144,000 of annual income to afford. That’s over 200% of the Suffolk County median household income. Not too far behind was Fenway (zip code 02115), with income of $124,000 required to secure a $3,100 2-bedroom there. While neighborhoods like the Seaport District, the Financial District and Kendall Square have high median rents (all north of $4,000 a month), the median incomes in those zip codes are commensurately high.

The Table Below Displays all 2-Bedroom Median Asking Rents

It also shows the income required to live in each neighborhood with sufficient data. You can sort by “Zip Code”, “Income Required to Rent (40x rule),” “Median 2BR Price,” or “% of Income Required for Median 2BR Rent,” or type in a neighborhood name or zip code to search for yours.

Is There Anywhere in Boston That’s Actually Affordable?

If you click “% Income Required for Median 2BR Rent” to re-sort the table above it’ll show that stat in ascending order. This shows us Wellesley (zip code 02481), Newton Highlands (zip code 02461) and Winchester Town Center (zip code 01890) at the top of the list of affordable neighborhoods relative to median household income. Again, because this is calculated based on the median household income, however, Wellesley’s affordability score is largely a function of the high household income in the zip code.

Neponset – Port Norfolk (zip code 02122) ($1,695 for a 2-bedroom), Downtown Woburn (zip code 01801) ($1,800), and Wollaston (zip code 02170) ($1,850) are all very affordable from a rent perspective. That said, the median income in Neponset – Port Norfolk is $53,103, which is far below that of Wollaston at $71,065 and Downtown Woburn at $84,479. While the median income for a given zip code is important information, one should base one’s apartment search on one’s own income rather than the household income of a given zip code.

What Does This Mean For You?

While these stats aren’t the only factor that determines what one can and cannot afford, they certainly give an advantage to anyone that didn’t know where to start when deciding where to live and how much they can afford. We encourage you to entertain all options when finding a new apartment, including having as many income-earners in the household as possible and looking at apartments with more bedrooms to bring down the average cost per bedroom.

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