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Southwest Region

southwest minnesota mapSouthwest Minnesota is a national leader in agricultural production, and renewable energy.

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A Lower Cost of Living

10/16/2019 2:00:00 PM

Luke Greiner

Highlighted on page 9 of the newly updated 2019 Regional Profile, Southwest Minnesota stands out for having the lowest cost of living in the state. While costs for food and health care are similar to those costs in other parts of the state, Southwest has much lower costs for housing, transportation, taxes, and child care. Annual costs for a typical family were over $10,000 lower than the state, and almost $16,000 lower than in the Twin Cities metro area (Table 1).

Table 1. Southwest Minnesota Cost of Living, 2018

According to recent Cost of Living estimates, the basic needs cost of living for a single adult with no children was $26,724 in Southwest Minnesota, which would require an hourly wage of $12.85 over the course of a full-time work schedule to make ends meet. In comparison, the basic needs cost of living for a single person in the Twin Cities was $32,640 per year, requiring an hourly wage of $15.69.

Adding a partner raises the cost of living by about $9,000 due to rising food, health care, and transportation costs, while housing costs remain almost the same. Southwest Minnesota still boasts the lowest cost of living of the six planning regions in the state, nearly $6,000 below the Twin Cities level.

Once children are included, the cost of child care makes the gap between the regions even larger. For a typical family with two adults and one child, with one adult working full-time and the other working part-time, child care costs would account for about 6 percent of the total basic needs budget in Southwest, compared to 13.5 percent in the Twin Cities. For a family with two children in daycare full-time, child care costs would eat up almost 15 percent of the budget in Southwest Minnesota, but almost 27 percent in the Twin Cities. Child care costs in Southwest were just 35 percent of the comparable costs in the Twin Cities.

Housing costs are also much lower in Southwest Minnesota compared to the rest of the state and especially the Twin Cities. Median monthly owner costs for owner-occupied housing units with a mortgage were about 78 percent of the statewide median, and less than 70 percent of the median in the Twin Cities metro area. Likewise, the median monthly rent was about 75 percent of the statewide median and 67 percent of the Twin Cities.

However, incomes were also lower in the region than the state and the Twin Cities. In 2017, about 22 percent of households with a mortgage were spending 30 percent or more of their income on housing costs, compared to 23.5 percent of households statewide and 22.9 percent in the Twin Cities. And 42 percent of renters were spending at least 30 percent of their household income on rent, lower than the 46.4 percent in the state and 46.9 percent of renters in the Twin Cities (Figures 1 and 2).

Figure 1. Southwest Minnesota Housing Costs, 2017 and Figure 2. Southwest Minnesota Housing Costs as a Percentage of Income, 2017

For More Information

Contact Luke Greiner at 320-308-5378 or Mark Schultz.

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