Where the Richest Americans Live

Large cities along the coasts are home to the most super-wealthy Americans.

Downtown Bridgeport, Conn., one of the richest--and most expensive--places in the United States, according to Census data.

Downtown Bridgeport, Conn., one of the richest--and most expensive--places to live in the United States, according to Census data.

By SHARE

To live among the wealthy, you've got to be willing to spend big.

New data released this week highlight the tight connection between wealth and cost of living, showing that cities with the highest concentrations of the richest Americans also tend to be the most expensive places to live.

[STUDY: Four Years on, Recession Still a Bummer]

A new report from the U.S. Census Bureau shows that the wealthiest households tend to be concentrated in large coastal metropolises, while smaller metro areas in the Rust Belt and the South tend to have relatively few uber-rich Americans. Census data from 2007 to 2011 show that households in the top five percent of incomes took in roughly $191,000 per year over that period. However, far more than five percent of households made that much money in some cities: nearly 18 percent of households in the Bridgeport, Conn., metro area were in that top tier, compared to around 1 percent for Danville, Ill., and Danville, Va. Those cities near the top of the list tend to have costs of living that far exceed the national average.

These are the 10 metropolitan areas with the largest share of households in that top 5 percent.

Rank Metro Area Share of Households Among Top 5 Percent
1 Bridgeport-Stamford-Norwalk, CT 17.9
2 San Jose-Sunnyvale-Santa Clara, CA 15.9
3 Washington-Arlington-Alexandria, DC-VA-MD-WV 14.1
4 San Francisco-Oakland-Fremont, CA 13
5 Trenton-Ewing, NJ 11.6
6 New York-Northern New Jersey-Long Island, NY-NJ-PA 10
7 Oxnard-Thousand Oaks-Ventura, CA 9.7
8 Boston-Cambridge-Quincy, MA-NH 9.7
9 Boulder, CO 9.4
10 Napa, CA 9.3

And of the 366 metro areas that the Census Bureau analyzed, these are the 10 metro areas with the lowest share of households in the top 5 percent.

Rank Metro Area Share of Households Among Top 5 Percent
357 Cumberland, MD-WV 1.4
358 Gadsden, AL 1.4
359 Mansfield, OH 1.4
360 Hinesville-Fort Stewart, GA 1.3
361 Anderson, IN 1.3
362 Muskegon-Norton Shores, MI 1.3
363 Steubenville-Weirton, OH-WV 1.3
364 Pine Bluff, AR 1.2
365 Danville, IL 1.1
366 Danville, VA 1.1

What makes a place more likely to have so many wealthy people? On one level, it's a no-brainer: cities near the top tend to be home to successful and high-paying industries. Silicon Valley, with its high-paid programmers and entrepreneurs, is centered around San Jose. The relatively stable industries of government, lobbying, and defense contracting are concentrated in Washington, D.C. New York City and its various suburbs likely have a high concentration of workers in finance and business.

The presence of industries that require high levels of education or specialized skills determines a city's cost of living over the longer term, says William Frey, a demographer at the Brookings Institution, a Washington, D.C.-based think tank. He noticed one common thread in particular about these cities where the wealthy live.

"I think what they have in common is relatively high costs of housing," he says. "They're places people want to live either because the amenities are right, the kinds of industries that are there are attracting high income people, and they are either suburbs and big metropolitan areas that are selective of people who can afford to live there."

[ALSO: In Online Dating, Size Doesn't Matter]

The Council for Community and Economic Research, an organization that publishes regional economic data, released figures this week showing that the 10 urban areas with the highest cost of living indices included three New York City boroughs, San Francisco, San Jose, Stamford, Conn., Washington, and Boston—all of which are represented among the cities with the highest shares of wealthy Americans. All of those cities have costs of living of 1.4 times the national average or higher, ranging up to the Manhattan borough of New York City, whose cost of living is more than twice the national average.

The fact that it's more expensive to live in a wealthy city sounds obvious. But there are important implications to that fact. Just as climbing the class or income ladder can be tough, so can moving into a wealthier city.

Frey says that people who settle in wealthier cities earlier in their careers have more time to build up equity in their homes. But getting in from outside can be difficult. "If you start your career in one of these low-income places, it's hard to make that jump. As people get older, a lot of their wealth is in the equity of their home," he says, making it hard to leave that home for a newer, more expensive place.

[PHOTOS: Mardi Gras 2013]

In addition, not everyone in Bridgeport, San Francisco, or Oxnard is in the top 5 percent, or even the top 50 percent. Moving up in the world, even within the confines of Boulder or Trenton, could require a much larger pay bump—and paying higher rent—than a similar move in Danville, be it in Illinois or Virginia.

More News: