Medford is Number One for Un-affordability

Medford, Oregon is expensive.

Costs are high, incomes are low.

Medford wasn't just somewhere on the list of un-affordability. We topped the list.

NPR Best and Worst Places

Planet Money is a program feature of NPR, National Public Radio. The article they posted had an intriguing title: 

"The best and worst places to live if you only care about money"

Medford was on the list.

The NPR article is based on two papers authored by Stanford Economist Rebecca Diamond and Berkeley's Cecile Gaubert and Enrico Moretti, based on data form 2014, Spatial Sorting and Inequality and Where the Standard of Living is the Highest.

The studies' methodology intentionally avoided subjective things like the climate, traffic, and beaches. They look at economic value: The incomes people earned in a place compared to the cost of living there. Is it "worth it" to take a high-paying job in a city if it costs a lot more to live there? The studies observed that incomes are higher in the Bay Area, Boston, and New York, and costs are higher, but in those cases, yes, it was worth it. Incomes were enough better. 

They examined inexpensive places, and featured Natchez, Mississippi as a place where incomes are low but costs are even lower, so money goes farthest. It is the country's best "deal." McAllen, Houston, and Beaumont, Texas were also good. 

Here is what NPR reported to be the least affordable place for a college graduate, after comparing local incomes and costs:

The five places with the lowest standard of living for college graduates: 

Medford, Oregon
Provo, Utah
Salem, Oregon
Olympia, Washington
Asheville, North Carolina

Then, for people who had not graduated from college:

The five places with the lowest standard of living for those with only a high school diploma:

Asheville, North Carolina
San Diego, California
Manhattan, Kansas
Medford, Oregon
Jacksonville, North Carolina

What is going on with Medford?

The studies evaluated 443 "commuting zones" representing 96.3% of the U.S. population. NPR's links lead eventually to the Stanford working papers which included the basis for the city rankings but not the rankings that include Medford. Therefore, my source for ranking Medford is NPR not the papers themselves.  The papers are data-rich and quantitative.

Some of the studies' observations are obvious and intuitive. People with high skills are drawn to places with high productivity and high salaries, and costs are higher. High real estate costs trickle down to haircuts and car washes and everything else. However, the "Spatial Sorting" paper explains why a place might break that pattern and be an outlier of high costs without high income:

A last important difference across geographic locations is the local amenities that they provide, which directly impact quality-of-life. Diamond (2016) highlighted that local amenities influence location choices, especially for the high skill[ed employee]. . ..Taken together with our environmental quality results, these results suggest that we see a transformation away from “production cities” towards “production and consumer cities” offering both high wages and better amenities (albeit at higher housing costs). . .. Spatial sorting of college workers was initially strongly directed at high-wage locations, but is now increasingly directed at high-amenity locations.

Medford, Oregon doesn't "make sense" as a place to live based on incomes, but it is a pleasant place to live, at least when there isn't forest-fire smoke. People like to retire here, or live here and work remotely. There are other pleasant places in the U.S. so why might Medford be an outlier among outliers, the very worst value?

I don't have Stanford research data, but I have a 30-year career's worth of anecdotes as a Financial Advisor. I suspect local realtors have their own versions of the same anecdotes.  Medford is a refuge for Californians who retire here or work remotely from here. Prices are high for real estate in the Medford area because "crazy Californians" from the Bay Area think our home costs are ridiculously cheap. They come to escape the traffic and crowds. They bid up and buy houses for cash, with the money from their California home sale windfall, and have more left over to invest. Directly or indirectly, they bring the high-productivity and high-income costs of the Bay Area here. Some people blame Californians. They skew the income/cost structure here, and many people who earn their money here are disadvantaged. (Not Financial Advisors. They are hugely advantaged by that infusion of investable money.) California pension and dividend checks are a nice clean industry for this area.

The bad news for locals is that Medford is expensive, if one is trying to pay for it with a Medford job. The good news is that it is expensive because this is an unusually nice place to live.