The Worst Best Cities For Millennials In America

I am a fan of “Top XX” lists when it comes to truly useful information: best cities or states to live in, lowest cost of living, best locations for jobs, most affordable housing, etc. So I found myself very interested when I saw a Forbes piece written by staffer Kathryn Dill titled, “The Best Cities For Millennials In 2015.” I found myself leaving very disappointed, and even a little upset. Yes, part of the reason was the article was a lazy aggregation of a Niche.com list and completely lacked any unique thought, but the biggest disappointment was that the content itself was incredibly irresponsible, especially from a source like Forbes, where people turn for reputable financial insight.

 

Let me preface this essay by saying there is more to choosing a place to live than money. There are many intangibles that make a place feel like a real home – proximity to family, cultural diversity, access to nature in the form of parks and trails, the bar and restaurant scene, population density and traffic, weather – the list is long. However, many of today’s modern cities have access to great restaurants and bars, music venues, museums, parks and trails and a diverse cultural ecosystem. We Millennials commonly share two unflattering characteristics: a tendency to move quickly from job-to-job and a boatload of student loan debt. Given these dilemmas, our #1 and #2 priorities when choosing a place to live should be:

 

  1. Cost of living versus income.
  2. Securing employment at a place we are pleased to work long-term.

 

The Two Levers Of Building Wealth

When it comes to building wealth, there are only two levers you can adjust to balance the equation in your favor:

 

  1. Money In
  2. Money Out

 

We Millennials are well-versed with the “Money In” concept. I can tell you about many young people I’ve met who believe a college degree automatically entitles them to a $60,000+/year position (no piece of paper entitles you to a dime). Those are typically the first people to be discouraged by job opportunities upon graduating from college. Regardless, every new graduate wants to start making money as quickly as possible.

 

It is the “Money Out” concept that seems to be the bigger struggle. Controlling the outflow of cash is critical and often poorly executed. Yet, we have a reputable financial source recommending some of the most expensive cities in America as ideal places for Millennials to live, even though they don’t have a dime to their name and have the next decade of their lives signed away to the big national banks. With this type of advice, we can quickly understand why so many of us Millennials are…struggling.

 

2015 Best Cities for Millennials In America – The Breakdown

Forbes and their ad-filled, clumsy interface is difficult to navigate smoothly, so I have broken the data down into a simple chart below, ranked in accordance with Niche’s information:

 

Rank City Percent of Population Age 25 – 34 Millennial Newcomers Unemployment Rate Median Rent
1 Cambridge, Massachusetts 27.7% 6.9% 4.4% $1,612
2 Manhattan, New York 22.1% 3.1% 5.7% $1,442
3 Alexandria, Virginia 24.4% 6.2% 3.6% $1,501
4 San Francisco, California 21.5% 3.1% 5.2% $1,488
5 Jersey City, New Jersey 22.8% 3.4% 7.3% $1,174
6 Seattle, Washington 21.4% 2.8% 4.8% $1,091
7 Washington, D.C. 21.5% 3.4% 7.0% $1,242
8 Berkeley, California 17.0% 4.3% 4.1% $1,298
9 Boston, Massachusetts 21.5% 3.6% 7.2% $1,281
10 New York, New York 17.3% 1.6% 6.1% $1,200
11 Denver, Colorado 21.2% 4.2% 6.0% $883
12 Minneapolis, Minnesota 21.3% 2.9% 6.9% $836
13 Ann Arbor, Michigan 17.2% 4.2% 4.4% $1,008
14 Brooklyn, New York 17.3% 1.4% 5.9% $1,149
15 Sunnyvale, California 20.4% 3.3% 5.5% $1,606
16 Austin, Texas 21.2% 3.1% 5.1% $978
17 Madison, Wisconsin 19.5% 2.7% 4.4% $906
18 Portland, Oregon 19.6% 2.8% 6.7% $915
19 Bellevue, Washington 17.2% 3.2% 4.0% $1,395
20 Santa Clara, California 18.0% 2.8% 5.5% $1,609
21 Pittsburgh, Pennsylvania 18.1% 2.4% 5.6% $767
22 Rochester, Minnesota 17.0% 2.0% 3.1% $792
23 Queens, New York 16.3% 1.3% 5.9% $1,315
24 Chicago, Illinois 19.1% 1.3% 8.1% $949
25 Tempe, Arizona 19.0% 2.7% 6.2% $925

 

Statistics mean very little without a benchmark, so I did some digging at ApartmentList and MarketingCharts to create a National Average dataset.

 

Rank City Percent of Population Age 25 – 34 Millennial Newcomers Unemployment Rate Median Rent
N.A. National Average 13.70% N/A 5.50% $980.00

Call me crazy, but I think any reputable organization trying to market a list of the best cities for Millennials to live in should be trying to find cities with median income above the national average and a median cost of living at or below the national average. There are still plenty of cities out there that fit that criteria that have things like diverse culture, great bars and restaurants, access to nature, etc.  You can be thrifty and trendy, folks!

 

When reorganizing the list by median rent cost, a very different picture is painted.

 

Rank City Percent of Population Age 25 – 34 Millennial Newcomers Unemployment Rate Median Rent
21 Pittsburgh, Pennsylvania 18.1% 2.4% 5.6% $         767.00
22 Rochester, Minnesota 17.0% 2.0% 3.1% $         792.00
12 Minneapolis, Minnesota 21.3% 2.9% 6.9% $         836.00
11 Denver, Colorado 21.2% 4.2% 6.0% $         883.00
17 Madison, Wisconsin 19.5% 2.7% 4.4% $         906.00
18 Portland, Oregon 19.6% 2.8% 6.7% $         915.00
25 Tempe, Arizona 19.0% 2.7% 6.2% $         925.00
24 Chicago, Illinois 19.1% 1.3% 8.1% $         949.00
16 Austin, Texas 21.2% 3.1% 5.1% $         978.00
N.A. National Average 13.7% N/A 5.5% $         980.00
13 Ann Arbor, Michigan 17.2% 4.2% 4.4% $     1,008.00
6 Seattle, Washington 21.4% 2.8% 4.8% $     1,091.00
14 Brooklyn, New York 17.3% 1.4% 5.9% $     1,149.00
5 Jersey City, New Jersey 22.8% 3.4% 7.3% $     1,174.00
10 New York, New York 17.3% 1.6% 6.1% $     1,200.00
7 Washington, D.C. 21.5% 3.4% 7.0% $     1,242.00
9 Boston, Massachusetts 21.5% 3.6% 7.2% $     1,281.00
8 Berkeley, California 17.0% 4.3% 4.1% $     1,298.00
23 Queens, New York 16.3% 1.3% 5.9% $     1,315.00
19 Bellevue, Washington 17.2% 3.2% 4.0% $     1,395.00
2 Manhattan, New York 22.1% 3.1% 5.7% $     1,442.00
4 San Francisco, California 21.5% 3.1% 5.2% $     1,488.00
3 Alexandria, Virginia 24.4% 6.2% 3.6% $     1,501.00
15 Sunnyvale, California 20.4% 3.3% 5.5% $     1,606.00
20 Santa Clara, California 18.0% 2.8% 5.5% $     1,609.00
1 Cambridge, Massachusetts 27.7% 6.9% 4.4% $     1,612.00

 

MedianRentVUnempM2015

 

When compiled, there are only three cities on this list that have both unemployment rates and median rents below the national average.

 

1. Rochester, Minnesota

Population Age 25-34 (2015): 17.0%

Millennial Newcomers (2015): 2.0%

Unemployment Rate (2015): 3.1%

Median Rent (2015): $792.00

Livability Index: 81

Cost Of Living Index: 92 (National Average = 100, lower is better)

Walk Score: 30

 

2. Madison, Wisconsin

Population Age 25-34 (2015): 19.5%

Millennial Newcomers (2015): 2.7%

Unemployment Rate (2015): 4.4%

Median Rent (2015): $906.00

Livability Index: 77

Cost Of Living Index: 106 (National Average = 100, lower is better)

Walk Score: 48

 

3. Austin, Texas

Population Age 25-34 (2015): 21.2%

Millennial Newcomers (2015): 3.1%

Unemployment Rate (2015): 5.5%

Median Rent (2015): $978.00

Livability Index: 80

Cost Of Living Index: 104 (National Average = 100, lower is better)

Walk Score: 39

 

Giving Millennials A Fighting Chance

Rochester, MN, Madison, WI and Austin, TX all look like great potential candidates for Millennials to live and work in an ecosystem that is modern, exciting and becoming more and more youthful and trendy. In my opinion, Austin, TX really stands out. Yes, the summers are certainly hot, but the winters are mild, the city averages 229 days of sun a year with only 34.2 inches of rain, is the home of SXSW and Austin City Limits Music Festival, and, oh yea, Texas has NO STATE INCOME TAX.

 

Compare those numbers to the Top 4 cities as outlined by Forbes and Niche:

 

1. Cambridge, Massachusetts

Population Age 25-34 (2015): 27.7%

Millennial Newcomers (2015): 6.9%

Unemployment Rate (2015): 4.4%

Median Rent (2015): $1,612.00

Livability Index: 79

Cost Of Living Index: 167 (National Average = 100, lower is better)

Walk Score: 88

 

 

2. Manhattan, New York

Population Age 25-34 (2015): 22.1%

Millennial Newcomers (2015): 3.1%

Unemployment Rate (2015): 5.7%

Median Rent (2015): $1,442.00

Livability Index: 75

Cost Of Living Index: 167 (Taken as a NYC average – Manhattan itself is probably higher) (National Average = 100, lower is better)

Walk Score: 89

3. Alexandria, Virginia

Population Age 25-34 (2015): 24.4%

Millennial Newcomers (2015): 6.2%

Unemployment Rate (2015): 3.6%

Median Rent (2015): $1,501.00

Livability Index: 82

Cost Of Living Index: 142 (National Average = 100, lower is better)

Walk Score: 61

 

4. San Francisco, California

Population Age 25-34 (2015): 21.5%

Millennial Newcomers (2015): 3.1%

Unemployment Rate (2015): 5.2%

Median Rent (2015): $1,488.00

Livability Index: 76

Cost Of Living Index: 184 (National Average = 100, lower is better)

Walk Score: 86

 

The list practically reverses.

 

These uber expensive cities tend to have one thing in common to justify their extreme cost of living: high walkability. Between public transportation and your own two feet, you can get just about anywhere in these cities. By contrast, the more affordable cities generally have residents that are more vehicle-dependent. But ultimately, these cities are devastatingly expensive to most Millennials, and the mild inconvenience of more regular vehicle travel is a small price to pay to more quickly shed the shackles of debt. The good news is the cities with lower costs of living are typically better outfitted for vehicle travel with wider roads and less population density, so there is a bit of a trade-off. Besides, with the advent of Uber and Lyft, these cities can be traversed more easily than ever before even with the absence of a clearly defined public transit network.

 

If there is one thing I have learned in my life, it is that the only person that will ever truly help my situation is myself. No matter how hard we try, we cannot fully control the “Money In” lever of the wealth-building equation. We cannot foresee the exact paths of our careers as time moves on. However, we can control the “Money Out” lever. If we are going to start a new life somewhere and begin our careers, why not do it in places that give us the greatest chances of success? A city like Austin, TX, is going to provide far fewer obstacles than a city like New York, NY – similar opportunities for income will exist, but Austin will drain your wallet at a much slower rate. And that rate can be the difference between building wealth and perpetual misery.

 

All information found herein, including any ideas, opinions, views, predictions, commentaries, forecasts, suggestions or stock picks, expressed or implied, are for informational, entertainment or educational purposes only and should not be construed as personal investment advice. I am not a licensed investment adviser.

Anthony

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