A guy just transcribed 30 years of for-rent ads. Here’s what it taught us about housing prices
Michael Andersen
3.3K222

My simple observation on housing costs vs salaries

I do find data presented in the article interesting mainly because it confirms my little theory on living expenses based on simple observation in past 20 years.

In my twenties I lived in Los Angeles shortly. I also lived in Prague for several years and lived in a few small towns in Czech rep. I spent couple months working in Germany and I did get to know some local people and how much they pay for rent.

People often assumed that I have made tons of money while I lived in Prague or LA, while they know the salaries there are much higher compared to my little home town in Czech republic.

This is what I use to say:

It’s all relative. No matter where you live. You usually spent similar fraction of you salary on rent. It tends to be 1/3 to 1/2 of single persons decent salary.

If you earn less you have to get cheaper apartment. If you make more than average you probably afford to pay for more luxurious living.

The only noticeable difference is the fraction of the income you are left with after you pay all your bills and basic needs. In expensive cities it might be equal to whole salary of people living in cheap areas. But if you like to eat out or spend a lot time having fun in theaters, bars, etc. it evens out pretty fast.

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