Forbes pegs RI as one of the most expensive states to live in. Here's what is driving that ranking.

• Median rent prices are based on old data

How expensive is it to live in Rhode Island?

According to a new Forbes.com report, it's really expensive and it's housing costs – both mortgages and rent – driving up the cost of living in the state.

What went into the rankings?

Forbes looked at several data sources to see how every state ranked in various measures. They were:

• Cost of living, defined as the average amount someone spends on essential expenses
• Average salary, from data provided by the Bureau of Labor Statistics
• Disposable income, calculated as the cost of living substracted from the average salary
• Transportation costs, based on data from the Council for Community & Economic Research
• Real estate costs, based on house prices and average mortgage payments, based on data from Zillow
• Cost of rent, based on data from the website Apartmentlist.com between 2017 and 2023. This year has seen brutal rent increases for Rhode Island and Providence
• Median monthly housing cost, based on U.S. Census Bureau data from 2021 and adjusted for inflation
• Food prices, based on Council for Community & Economic Research's cost of living index
• Health care costs, based on data from KFF.org
• Income taxes, based on the Massachusetts Institute of Technology's Living Wage Calculator. Rhode Island has a graduated income tax, starting at 3.75% on the first $73,450, then rising to 5.99%.

Rhode Island gets a special note in the Forbes report for transportation because it's the smallest state by land area, with "an average one-way commute time of just under 25 minutes." That beats similarly small Hawaii's 27-minute commute.

How does Rhode Island stack up?

• Cost of living was estimated to be $44,481, to rank 13.
• Disposable income was estimated to be $22,120, to rank 22.
• Average salary was $66,602, to rank 14.
• Average transportation cost was $4,421, to rank 50.
• Median home price was $432,888, to rank 13. The May median single-family home price was $460,000.
• Monthly mortgage payment was $2,587, based on 13% down and a 7.3% interest rate on a 30-year loan.
• Rental cost, $1,527 for rank 14, was based on June 2023 data.
• Median monthly housing cost was $1,613 for rank 11.
• Annual food cost was $4,582, to rank 20.
• Health care costs were $11,049, to rank 13.
• Income tax was $5,072, to rank 17.

Are some of these numbers right?

While Forbes is transparent about its data sources, there are many different estimates for a few metrics, including rental costs and salaries. A report by the bill pay company Doxo had wildly different numbers for housing costs and salary than most government sources.

The alternative housing numbers:

• HousingWorksRI's 2023 Housing Fact Book put the statewide average rent for a two-bedroom apartment at $1,996.
• The Fact Book put the average two-bedroom rent in 2017 at $1,869, well before the run-up in rents during the pandemic.
• An April report by rent.com put Providence's median rent at $2,743, marking a 16% year-over-year increase.
• Rhode Island's cheapest town in which to rent, Burrillville, has a rental payment of $1,026, per the Fact Book.

The alternative salary numbers:

• The Fiscal Year 2024 Department of Housing and Urban Development Area Median Income, or AMI standards, the only standard for how much people make in the state, puts the annual salary at $78,750, while for a two-person household it's $89,920.

Housing drives costs

In Rhode Island, a lack of housing supply means rent and the cost to buy a house keep going up, and some towns are pushing back on the state's efforts to spur construction of single-family homes and apartments, such as Narragansett, where officials are looking at banning duplexes.

The town already increased its zoning standards to negate increased leeway for setbacks approved during the 2023 legislative session.

At the same time, Providence is looking to roll back 1950s-era zoning rules labeled racist that reduced density in the city with its new comprehensive plan and zoning maps, which leave all but a few pockets of the city's single-family zoning entirely intact.

Not quite as expensive as Massachusetts

Neighboring Massachusetts, home to Boston, has the second-highest cost of living, at $53,860, putting it just behind Hawaii, according to Forbes. Massachusetts has the fifth-highest level of disposable income, $26,470.

But that comes with a big asterisk, as Massachusetts has a higher average salary ($80,330) than neighboring Rhode Island ($66,602) and has the highest average salary in the country, followed by New York, Washington, California, New Jersey and Connecticut.

For most metrics, Rhode Island was cheaper than Massachusetts, which has some of the highest house prices, rental costs, food costs and health care costs in the country.

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Reach reporter Wheeler Cowperthwaite at wcowperthwaite@providencejournal.com or follow him on Twitter @WheelerReporter.