The basics of life really do cost much more in New York. It has a well-documented Consumer Price Index of 100, compared to the overall CPI of the US, which is 75.94. Apartment prices, rental or purchase, bear that out.

Rent

You can easily pay $20,000 a month for a family-size apartment on the Upper East Side of Manhattan; a low rent your family might find – and that’s for a tiny place in Astoria, Queens – is $2,000. Obviously, there are many variations, but just finding a place to live in New York City is grueling. The vacancy rate hovers around 2% and rental prices in Brooklyn went up 10% last year. The average rent for a one-bedroom in New York City (including all five boroughs) is calculated at $3,100; Miami, $1,700; San Diego, $1,430; Minneapolis, $1,410. 

If you find the New York figures hard to believe, browse the specific listings on StreetEasy.comRent-controlled and rent-stabilized apartments do exist, but are so desirable and so rarely on the open market that you have to allow months and months to search while you study up on all the angles to find one. 

Buying an Apartment

An apartment in the heart of Manhattan costs an average of $9,792 per square meter, which is almost 200% higher than it would cost in central Chicago, for instance. You could get lucky and find something you want right away, but finding a place to live that you can afford is more likely to take a lot of shoe leather and a good deal of time. Also, some cooperative apartment buildings in New York require a higher down payment (50% or even 75% in ritzy ones) than a mortgage-issuing bank would ask. To win an auction for one of Brooklyn's Park Slope brownstone houses, you might even have to pay "all cash," which means what it says (no mortgage allowed).

Food

According to statistics, almost every grocery item costs at least 10% more in New York than in Chicago. (Although skinless and boneless chicken breasts are only 3.60 % more and tomatoes are about the same price, in season). Beer and bottled water seem to cost a bit less, no doubt because of the competition. Also due to that competition, a lot of the comparative statistics (except for rentals and co-ops) are subject to huge variations. You can find specials on everything in New York. (See How is the cost of living index calculated?)

Dining Out

Restaurant meals are a good example of variations. There are many inexpensive eateries, or find specials on the web and dine in out-of-the-way spots and you can cut your restaurant and/or takeout expenses way down. The statistics say that a three-course meal for two in a mid-range restaurant will set you back $75 in NYC and only $55 in Chicago, a 36.36% higher cost in New York. All the same, New York has so many restaurants and so much competition that you can probably do a lot better there. There are way more than 16,000 full-service restaurants in NYC and 18,780 counter-service restaurants. Combined, that’s thousands more than the number of restaurants in Chicago, according to the Chicago Tribune. And in Chicago, they’re including McDonald’s and Burger King and the like. (Sadly, even McDonald’s costs more in New York than Chicago, by 23.08% for a McMeal.)

Transportation

A single ticket for public transportation that will take you everywhere and anywhere in all five boroughs of New York City is $2.75; a monthly pass is $121, both of which are around 11% or 12% more than Chicago’s fares. Taxis start at $3.24 in Chicago versus only $2.50 in New York, but since they take forever for even short distances because of the traffic, you will do much better on the subway or even on a bus, where you can sight-see the whole way.

One plus for New York City over some locales: You don't need to have a car. In fact, garaging one will add massively to your cost of living. Street parking is possible, but dicey due to scarcity, meters, the possibility of accidents and a New York City street-cleaning nightmare called Alternate Side [of the Street] Parking, which requires you to change parking spots multiple times a week.

Utilities

For an 85-square-meter apartment (that's 101.6592 square yards, to be exact), basic utilities (including electricity, heating, water, garbage) in Chicago cost $126.54 a month; in New York $142.52, a difference of more than 12%. Adding access to the Internet will set you back another $42.71 in Chicago; $52.19 in New York.

Elsewhere

Only San Francisco, of big cities, comes close to New York in cost, and yet overall, New York is still more expensive. In fact, purchasing power is nearly 16% lower for a New Yorker than for a resident of San Francisco. 

The Bottom Line

You have to love New York City, its excitement and its opportunities a great deal to make up for the undeniably higher costs of food, shelter, transportation and so many other parts of daily living. Of course, it helps to have a comparably higher income.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.