The True Cost of Living in America: Kansas City

When the Kansas City Royals won baseball’s World Series in November, much of small-town America was rooting for them. The small-market Royals had been terrible for decades, unable to compete with big-money teams like the New York Yankees. So while rivals from Los Angeles, New York, San Francisco, and Washington, D.C., watched from home, the young team from the heart of America became world champions.

More evidence that you don’t have to be in a big coastal city to be a winner.

Kansas City is in the middle of a lot of things — it’s basically the geographic center of the United States, and, in fact, North America. It’s close to the population center, too. Often called the eastern-most western city, it’s where the Ford F-150 is built. Where Hallmark makes its headquarters. Where Garmin helps us all get where we are going. Where modern jazz was born. Where barbecue was perfected (for those with a sweet tooth). Both the Santa Fe and Oregon trails passed through Kansas City, making it the first stop in the American West.

It’s also in the top 5 affordable cities in the U.S., according to data we published recently at Credit.com.

Life in Kansas City

Pat Daneman, 61, found her way there 30 years ago because even back then, Kansas City was affordable.

“My husband had job offers in Chicago and Philadelphia as well and we picked K.C. because we wanted to buy a house and have good schools,” Daneman said. “Our first house was $90,000. I think we put down 10% and payments were about $600. His salary as a college professor was about $30K. It took me a few months to find a job. My salary was about $23K. That was 1986.”

Let’s pause on that math for a moment: their combined pre-tax income was nearly $4,500 a month; their mortgage payment only 15% of that. For a place in a suburb named Lenexa, on the Kansas side, about 10 miles southwest of downtown.

Ten years later the c Kansas City ouple sold that house for $125,000 and upgraded.

“We were able to pay off (that mortgage) in about 10 years so we could retire early,” she said.

Daneman’s solid financial footing is critical; her husband died two years ago.

“I am in a paid-off house,” she said. “My taxes are $4,200 and insurance is $1,800… My property taxes feel high, but I think they’re still lower than my parent’s taxes were on Long Island in the 1970s.”

She visits New York often — her daughter and cousins live in Brooklyn — and she loves the big city. But Kansas City is now home for her.

“I love Lenexa and my neighborhood. There are walking trails through the woods. I walk to the grocery, drugstore, library, pool — now that I don’t work in K.C. anymore, most places I go frequently are just a few miles away. I’m close enough to Lawrence to go there for concerts and other events at KU.”

Of course, it’s not perfect. Being in the middle of the continent, Kansas City is within Tornado Alley. Daneman makes an interesting point about living in inexpensive neighborhoods: Her home is probably worth $300,000 now, which is hardly the windfall many homeowners enjoy after a lifetime of mortgage payments. (“That is the down side of affordable housing — not a lot of growth,” she said) And then there’s the decided lack of beaches.

“The worst thing about not living on the coast is no coast,” she said.

The largest employer in Kansas City is the federal government; there’s a Federal Reserve Bank in both Kansas City and St. Louis, making Missouri the only state with two. The Internal Revenue Service has a large presence in the city, as does the Social Security Administration.

Kansas City is considerably larger and better off than its Missouri counterpart 250 miles away on I-70 — St. Louis’ population has been dwindling in recent years, while Kansas City has reversed urban population decline. Today, 25% of all jobs in Missouri and Kansas are in Kansas City, but even better — 63% of new jobs added in the past year within the two states are in Kansas City.

Not everything is rosy. A report by Brookings and the Mid-America Regional Council on Kansas City’s future prospects published in 2014 fretted that the area has a “relatively sparse number of large firms” that compete worldwide; and the city’s job market seemed more sluggish than others to recover from the recession. The report blamed a lack of cross-border cooperation for some of the problem — Kansas City, Mo., and Kansas City, Kan., haven’t always played nicely together, dating back to the Civil War. Racial tensions from when Missouri was a slave state and Kansas was free persist. Crime is still a serious problem, particularly in urban neighborhoods — while the city’s murder rate in 2014 was the lowest in decades, the rate rose dramatically last year, with one murder nearly every three days, according The Kansas City Star.

But Kansas City’s ample inventory of affordable homes is just one of the reasons people people seem enchanted by the City of Fountains.

“I always thought I would move back home to N.Y. at some point,” Daneman said. “But when you live someplace for a long time, that’s hard — much harder than I thought it would be to leave Kansas, of all places … There’s no comparison as far as space, peace, traffic, even weather.”

Kansas City By the Numbers

Affordable Cities Ranking: 5th

Housing Poor Residents: 29.8%

Zillow Home Value Index : $107,800

Median Household Income: $45,376

Remember, a good credit score can make a home more affordable in any area since it generally entitles you to better terms and conditions on a mortgage. (Landlords, too, are in the habit of reviewing a version of your credit report when accepting lease applications.) That’s why it’s always a good idea to check your credit before you start your search for a new home. You can see where you stand by pulling your credit reports for free each year at AnnualCreditReport.com and viewing your credit scores for free each month on Credit.com.