I’ve lived in San Francisco for four years, and I don’t think I’ll make it another two. There aren’t many areas to settle down, and the Bay Area is determined to break all previous records for the cost of living. I won’t bore you with the statistics, but locals and visitors alike worry about the harsh economic conditions while also taking pride in their ability to survive.
I’d like to have some freedom to select my next, more accessible location before the city kicks me out. My future residence must meet only two simple requirements: speak Spanish and love soccer. Europe was out since the only nation that met both requirements, Spain, has a failing economy.
Then I went out for drinks with my college roommate. Future entrepreneur, he recently completed a two-year stay in Barcelona to complete his MBA at IESE Business School. Evidently, the economy is doing better, and the separatists in Catalonia haven’t caused any major political disruptions. But his rent was the true eye-catching figure. It cost €675 ($754) for him, Stefan Bolea, and his girlfriend, Annie Tang, to rent an apartment that was about 600 square feet in size and 25 minutes by train from downtown.
After making that finding, I switched my attention from South America to Spain and questioned my roommate about his financial situation in Barcelona.
First, let’s look at my roommate’s portion of the couple’s monthly expenses in Barcelona (NOTE: All figures were computed using the conversion rate of 1 EUR to 1.11 USD as of early August 2016):
- Rent: $377
- Internet: $13; groceries: $145
- Utilities (water and electricity): $56
- Do not worry, he washed his clothes. Laundry: N/A
- Medical: $78
- Cost of traveling: $48
- Cellular: $13
- $730 total monthly expenses ($8,760 yearly)
Let’s now focus on some of the more significant expenses. Check out some of the startling variations in the cost of living from one country to another if you’re considering a similar relocation or are simply intrigued.
One-bedroom apartment monthly rent
According to Zumper, the median cost of a one-bedroom in San Francisco as of July 2016 was $3,510. The average price in Barcelona was 16.1 euros/m2, according to information from the English-friendly rental website Idealista. In Barcelona, a 600 square foot apartment will therefore cost roughly €900, or just over $1,000.
Since 2014, Barcelona’s rents have been rising, and in July 2016, they reached a record high. A 600 square foot apartment typically cost €655 ($731) when Bolea and Tang signed their lease in August 2014.
Negotiate the rent price. Bolea said, “We bargained a little and got it down from about €700 to €675.”
Good news is that Barcelona, unlike San Francisco, hasn’t had rent control in decades, so having the flexibility to barter is advantageous. Any residential structures built in San Francisco before 1978 are under rent control. According to Mark Stücklin, owner of Spanish Property Insight, rent restriction, or “renta antigua,” was instituted in Barcelona in response to a housing crisis and low earnings and only applies to leases signed between 1964 and 1985.
The average cost of groceries is $111.
Barcelona, like California, “grows the majority of its own produce locally and has a ton of less expensive stores in addition to supermarkets,” Tang added. The average monthly cost of groceries for Jessica B., a foreigner who blogs under the name Barcelona Blonde, is €100 ($111).
Expatistan, a user-generated website that compares the cost of living in various locations around the world, also found that every food item listed in San Francisco costs between 22% (1 quart of whole fat milk) and 261% more than it does in Barcelona (2 pounds of tomatoes). Additionally, businesses provide their staff members cards like these for restaurant savings in place of catered meals.
Water is not provided in Barcelona as a utility.
Electricity and gas are typically paid for by tenants in San Francisco; the landlord then pays for water and recology (the city’s fancy phrase for trash). Bolea and Tang paid €100 ($111) per month in Spain for water and electricity.
The cost of water usage is more expensive than the cost of heat because San Francisco and Barcelona have moderate climates. Expatistan confirms the problem: The only vertical they track where Barcelona is more expensive than San Francisco is utilities.
You’ll have to do your laundry without using a dryer.
A washer and dryer in a rental is about as uncommon in San Francisco as a snowfall. Most apartments in Barcelona have washing machines, and Catalans are accustomed to living without dryers (clotheslines work just fine).
It can cost $30 per month to haul soiled clothes to a laundromat in San Francisco. Not to mention, according to Expatistan, San Francisco charges 36% more for laundry detergent than Barcelona does.
In Barcelona, private healthcare is actually affordable.
The free public healthcare system in Spain is available to all residents and taxpaying individuals. Jessica B. benefits from the public system even though she works for herself by paying taxes.
Private insurance is still reasonably priced. Tang purchased a medical insurance policy with 100% coverage and no deductibles for €33 ($37) each month. The same coverage was included in Bolea’s €70 ($78) plan, in addition to dental and simpler access to doctors who understand English.
Tang said, “I could schedule an appointment without going through my primary care physician and avoid the lengthy queues at public facilities.
She spent only €4 on a prescription for an allergy medication, which is less expensive than American over-the-counter medications like Clariton because medications are subsidized nationwide.
Because private insurance covers everything, I could still walk into any public ER and receive treatment for free, if necessary.
Cost of a monthly metro pass for commuters
A San Francisco MUNI pass that allows for unlimited bus rides costs $70. A Bolea monthly pass in Barcelona cost €42.5 ($48) and allowed for a total of 50 trips. Unless an employee lives more than 30 or 40 kilometers from their place of employment, subsidized commuter benefits like WageWorks are unknown to one Barcelona resident I spoke with.
Bicing, Barcelona’s bike sharing program, is an additional choice. The annual price is €45 ($50) and includes unlimited rides of little more than 30 minutes. The identical offer costs $88 in San Francisco.
In Barcelona, taxes will be more expensive.
Most people moving from San Francisco to Barcelona will find that their monthly expenses are less expensive, but their taxes won’t. Similar to the US, Spain has a progressive tax structure that levies fees at both the national and local levels. Catalonia unfortunately has among of the highest tax rates.
For instance, a person earning $50,000 (€45,000) annually, which is barely below the median household income in the U.S., will pay about $14,019 (€12,664) in personal income tax in Barcelona. (Disclaimer: We are neither certified accountants nor tax specialists for Spain’s tax system.
While a resident of San Francisco will pay $10,440 in income taxes with the same earnings.
Expenses if I relocated to Barcelona as a whole
To save you the arithmetic (but maybe not the anguish), if the average American earned $50,000, they could anticipate saving $22,780, or more than half of their income, according to Bolea and Tang’s calculations.
This value is not perfect. Rent has increased, a full-time employee won’t cover healthcare bills, travel and entertainment charges will add up, and I’m sure there are tax code provisions that some accountant will tell me I can take advantage of.
However, I’ll gamble in Barcelona.
Here’s some food for thought: If you wanted to buy a house for $50,000 anywhere in the globe, you could acquire one of the following.
