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Wednesday, August 18, 2010

Can middle-income people retire in high-cost cities?

Poor Funny About Money. She wrote about her dream of moving to San Francisco, only to have her dream dashed when she realized that she had miscalculated her income.

But is this really true? A time-honored retirement strategy has been to sell the house in San Francisco or Boston and move to a lower-cost area. Can it go the other way? Are those of us who live in lower-cost areas doomed to never see the big city?

I mentioned to Funny that people rented garage apartments in Houston. I wondered if such were available in San Francisco. She was horrified. That's because she pictured living IN a garage. But the garage apartments I visited in Houston were ABOVE garages, behind very tony houses in good neighborhoods. The apartments were NICE. And very inexpensive.

So, readers: any ideas? San Francisco? Chicago? Philadelphia? Boston? Montreal? Toronto? Vancouver BC? Any way to live on a modest income?

10 comments:

hostess of the humble bungalow said...

San Francisco and Vancouver are way too expensive!
I don't know about Tornoto or Montreal...Quebec City maybe less pricey...
I would think smaller towns generally might be more affordable.

Budgeting in the Fun Stuff said...

We rented out our spare bedroom in a Houston, TX suburb for $500 a month...is that a good deal for California? I never thought about retiring to a more expensive city...that seems stressful...

SewingLibrarian said...

Here in the San Diego area it's not just the housing. Everything seems more expensive than it did in Dayton, Ohio. The possible exception is food, but only if one knows to shop at the correct stores, not the Big Three supermarkets (Ralphs, Vons, Albertsons). Concert tickets, gas, movies, services, you name it. I think the Bay Area would be even worse. In Dayton we had a very nice second-run movie theater that we frequented - much cheaper than the regular theaters. Here, at least in my area, there isn't anything like that.

Duchesse said...

I live in Toronto, it's expensive (I could cite various indices). That's why some semi-rural communities deliberately market themselves to retirees.

One way to reduce the high cost of housing in major, desirable cities is co-housing or shared accommodation. Maintaining one's own living space is a very costly way to live, not to mention socially isolating. I predict a big increase in communal living among seniors- sharing kitchen, laundry and some social space makes sense to me.

nicoleandmaggie said...

I want to live in the SF bay area. There aren't any reasonable jobs in my field that I could get though. BUT I figure if I just save up 10 million, I can buy a small million dollar house with cash and live off the rest. Shouldn't be too difficult, right?

It's something to aim for...

佳張張張張燕張張張張張 said...
This comment has been removed by a blog administrator.
Shelley said...

I've noticed that food costs a lot in major cities as well as housing. Shared living space sounds a great idea to me. One of my fantasies is to buy a large manor house together with several other people and share the cost of a carer... Not likely to happen, but it's fun to think about.

Frugal Scholar said...

@Everybody--This is so depressing! I guess I'm not going to SF either.

Funny about Money said...

LOL! Actually, not exactly in a garage, but in the converted studio.

In the much gentrified central city here, people convert the little free-standing garages, built for the Model A, into studios, which they sometimes will rent. Our neighbor behind us went a step further: she moved into the one-room garage>studio and rented out the house proper. Since she was young(ish) and single, it was a great idea. The rent covered the mortgage and she didn't have to work very hard.

I like Shelley's idea of buying a huge place -- a compound, if you like -- with others, basically a form of cohousing. For me to be comfortable with that scheme, there would have to be some room (a lot of it...) between me and the cohousers. But there are pieces of property here, there, and everywhere that have more than one habitable structure, or a large residence that could be divided into separate housing units.

In San Francisco, for example, my son lived in a house where the landlord occupied the bottom floor and rented the top floor -- another whole three-bedroom flat with a full, well appointed kitchen. In Oakland, he and his roommates lived in the upper part of a house that had been divided into two flats -- I believe the one downstairs originally was a large garage and workroom suite.

What if you could get a place like that, only instead of renting to strangers, have two or three individuals or couples go in to buy the property? Each person or couple then has a separate apartment, but friends are together, maintenance costs are shared, and the yard could be set up as a common area.

Sewing Librarian points out that it's not just real estate making life in a big city financially prohibitive. Often food is higher, as is the cost of transportation. Many rentals have no place to park your car, so you have to pay for parking or park on the street (my son's very nice Camry was totaled when he parked it safely outside his apartment and some teenage kid came along and rammed it full force)..

If you were going to live in place like San Francisco or Manhattan, you'd probably be better off to get rid of the car and use the public transit, renting when you wanted to take a road trip and using a cab for shopping trips that require you to carry more than you could take on a bus. That probably wouldn't be a lot cheaper than owning a car in a more auto-friendly city.

In California, too, many inescapable costs are higher: food, gasoline, insurance, taxes...on and on.

If you crave a cosmopolitan environment, it probably makes more sense to look at big cities overseas. Unless you really are very wealthy.

Frugal Scholar said...

@Funny and Duchesse--Maybe more of us should look into the cohousing options.