Identifying the most desirable communities in America

June 9, 2015 | 0 Comments

What’s the most desirable community in the U.S.? In a recent study titled “Driving to Opportunity: Local Rents, Wages, Commuting, and Sub-Metropolitan Quality of Life,” researchers investigated differences in local rents, pay, commuting costs, household characteristics and amenities in nearly 2,100 areas within metro areas throughout the U.S., creating an index based on “willingness-to-pay,” which “indicates the quality of life typical households receive from local amenities, when households are similar, mobile, and informed.”

A new study named the Upper East Side the most livable neighborhood in the U.S. Image from John Weiss.

As the researchers point out, people must navigate trade-offs when deciding where to live, balancing the fact that residential areas near high-paying jobs, or areas with “desirable amenities,” are usually pricey. Using Census data, the researchers “construct[ed] a local willingness-to-pay index for a typical household based on how high housing and commuting costs are relative to available wages.” Simply put, what is the relationship between the costs of housing and commuting, available jobs, and quality of life?

The researchers targeted 2,071 areas, and they named the top five areas for quality of life:

The Upper East Side in Manhattan
Brentwood/Bel Air/Beverly Crest in California
Cupertino/Los Gatos/Saratoga in California
East Oahu/Waialae-Kahala in Hawaii
San Rafael/Sausalito/Mill Valley in California

There are notable simplifications to the index, of course. As the researchers note, their measurement is based on the “sacrifice” a household makes in order to live in a particular place. Plus, the idea of what a “good neighborhood” varies. Still, notes the study, a few factors are agreed-upon givens, including mild climate, safety, entertainment and number of local bars and restaurants, and well-funded schools. One of the researchers’ helpful analogies: “[I]t can be useful to characterize political views along a single dimension from ‘liberal” to “conservative,’ even though political views are multidimensional. While people may differ on what makes a good neighborhood, it is convenient to have a standardized quality of life measure that reflects ‘typical’ tastes to compare neighborhoods in separate metro areas.”

The commuting aspect of the index discovered that people’s “willingness-to-pay” to live in suburban areas, or in dense areas, is higher than expected, while the index’s wage factor showed that salaries in central cities are just as high as salaries in the suburbs… even though the skill levels of employees are not equal. The study also discovered that the quality of neighborhoods within metro areas vary greatly, due not to the local amenities, but rather to residents and the “artificial amenities” they create.

Some amenities that are particularly important to residents? School funding, for one: Researchers found that an increase of $1,000 in funding per student is correlated with a quality-of-life jump valued at $700. Bars and restaurants are also important: Per 1,000, each bar or restaurant is related to a $190 rise in people’s willingness-to-pay to live in a particular area.

Want to learn more? Discover the ins and outs of the researchers’ extensive work online.