City grows steadily more expensive to live in
Published by Florida Times-Union on April 18, 2008.
When Bill Marino was looking to move somewhere warm a couple of years ago, Jacksonville was just the place.
Besides having nicer weather than Connecticut, the difference in housing prices meant he would make money on the move.
"We got in at almost the perfect time, " he said, trading his 1,600-square-foot home in Hartford for a 2,100-square-foot home here and netting $75,000 in the process.
Other things made the transition financially beneficial, as well: cheaper gas, cheaper groceries, a lower cost of living overall. But that's not nearly so true anymore. "I've seen in past three years, a lot of the prices have gotten pretty equal to Connecticut, " he said.
Economists' observations have borne that out: The cost of living in Jacksonville compared with the rest of the nation has been steadily trending upward for the past five years, according to data compiled by the Council for Community and Economic Research. The cost of living index shows how different cities compare with each other, with the national average always standing at 100.
Jacksonville's average annual cost of living jumped from 91 to 99 since 2003. The change features both good and bad aspects for Jacksonville, making it tougher for recruiters but serving as a possible sign the city is growing up.
Jacksonville still isn't at the higher end of the scale, and is far below the 212 racked up by list leader Manhattan. But Jacksonville had the fastest-growing cost of living of any major Florida city, with Tampa jumping 6 points, Orlando 5 and Miami 2 compared with Jacksonville's 8. Gainesville got relatively cheaper over the same period, dropping almost 4 points to show up near the same level as Jacksonville last year.
CHAMBERS COLLECT PRICES
The council's cost of living index is derived from prices collected by Chambers of Commerce around the country and does not include state income taxes or local property taxes. Groceries, transportation, housing, utilities and miscellaneous goods are weighted and added to come up with a comparison.
A cost of living index, of which the Council for Community and Economic Research's is perhaps the best known, is related to but different from the Consumer Price Index. While the CPI looks at the change in costs over time, a cost of living index compares one area with another: People most commonly use a cost of living index when they're moving and wish to know, say, how much more it would cost to buy groceries in their new home.
Also, cost of living calculations like the council's are, by nature, rough and don't include all of the differences between two cities' economies. The index ranks the Atlanta metro area as cheaper than Jacksonville, for example, but that doesn't take into account Georgia's state income tax or the increase in commute time seen by those living on the outskirts of the metropolis in order to pay Jacksonville-equivalent housing prices, two expenses that might hit Jacksonville residents who moved there.
Other data confirm the city's rising level of expense. The Local Economic Indicators Project at the University of North Florida, for example, shows inflation growing on the First Coast, hitting a seasonally adjusted 108.59 in March. (Such growth wouldn't change the city's standing on the cost of living index if the nation was seeing similar inflationary pressure.)
The increase in the cost of living has been caused by jumps in a variety of categories: Bafflingly, for example, Jacksonville is now one of the most expensive places in the country to get your tires balanced, pushing up the transportation category.
STILL A GOOD DEAL
Other categories haven't risen quite as high. Although housing - the biggest single expense in the index - is decidedly more expensive now than it was five years ago, lodging here is still a good deal compared with many other places, standing at 95 points, slightly below the national average.
"People are still excited or surprised at what they can get here, compared to New York or Washington or even Atlanta, " said Jane Loop Pomar, owner of Loop Executive Search.
Debra Fox, who moved to Jacksonville from Vermont last year, agreed. "I never had any money left over, " Fox said of her previous home, where she paid double the rent she pays here - "never mind that it wouldn't have the swimming pool and the tennis courts."
The difference in cost of living was a big part of her decision to come to Jacksonville, Fox said. "I wanted to live in a place where I could support myself."
That's a pitch that recruiters long used in helping attract talent to the First Coast, although the city's move to just-about-the-national-average takes away that tool.
"It definitely did help, " said Margot Finley-Aguilera, president of Avondale Search International, which has recruited executives for more than a decade. Now, she said, relatively higher prices aren't keeping people away but "it's made the conversation more lengthy. It's a factor in the negotiations."
HIGHER VS. TEXAS
When Herby Laurent, an engineer at Maxwell House's coffee plant, was asked to transfer from Houston, he looked up the difference in costs between the two cities. "I did know that real estate was going to be twice as expensive, " he said, because the supply of land in Texas combined with low zoning burdens have led to cheaper houses there.
Laurent paid about $50,000 more for 1,100 fewer square feet here. The upside is lower utility costs, about half of what Laurent said he used to pay. "I count on that to make up for the difference in mortgage."
There are other bright linings as well: Although the higher cost of living makes the city more expensive, it might be a sign the city is growing up, with the relatively higher prices leading to long-term benefits.
Wages in the area, for example, have been steadily rising over the same period the cost of living has been going up. As employers are forced to hike wages to attract talent, "you get the reputation of being a place where you can earn a better wage, " said Paul Mason, a UNF economist who heads up the Economic Indicators Project. "It helps you attract more workers."
And recruiters still can tout other benefits for those who move from colder, perhaps bleaker places.
"You're spending the same amount of money you'd spend anywhere else, " Thomas Burke, vice president of human relations for MPS Group, said about the cost of housing. "There's not going to be a price advantage. But at the end of the day, you're living on a golf course with a boat on the water."