What Is The Cost Of Living In California Vs. Ohio?

While Ohio may not have a swell in population growth, miles of stunning coastline, and a developing tech scene, there is still much to love about the Buckeye State. Aside from having all four seasons, excellent healthcare, great job opportunities, and numerous exciting amusement parks, Ohio is known as one of the most affordable states in the country. It is a far cry from the high rental prices and affordable housing crisis in California. But, how does California and Ohio stack up when it comes to cost of living?

The cost of living index in the state of Ohio is 82.6, meaning it is about 17% more affordable to live in Ohio than the national average (100). California, on the other hand, has a cost of living index of 149.9, so it is considerably more expensive than both Ohio and the national average. Ohio’s median home price is only $179,700, which is about 38% less than the national average of $291,700. Meanwhile, the median home price in California is $684,800 – a staggering 281% higher than Ohio.

Aside from median housing prices, let’s take a look at how the cost of living compares in California vs. Ohio.

When you evaluate the fact that the median home price in Ohio is just 179,700, it is substantially more affordable to buy a home in Ohio than in the state of California. In fact, you’d be looking at spending almost four times the amount for a home in California, with a median home price approaching 700,000.

Home sales across Ohio were up over 10% in June of 2021 compared to June of 2020, which indicates that the housing market continues to be competitive. This competitive market started as a result of low interest rates and not enough homes. Nearly the entire state is seeing an increase in average home prices compared to last year, because of the overwhelming demand for homes. As life starts to return to normal in the midst of the COVID-19 pandemic, it’s unlikely that housing prices will come down.

While it may be a good time to sell a house in Ohio, it is more expensive and more competitive than normal for buyers. Regardless, Ohio remains one of the most affordable housing markets in the nation, and is significantly more affordable than California. California is experiencing a similar supply and demand imbalance, which was only exacerbated by the pandemic. Median home prices in California reached a record high in May of 2021, and residents continue to leave the state or head to more rural locations in search of cheaper housing.

In most cases, rental prices are higher in the states that have higher incomes. The states with the top five highest average rents are also included among the ten highest-earning states in the nation. California takes the second spot on the list of the highest average rental prices in the U.S., with a statewide average rent of $1,503.

However, there are approximately twenty-one states in the country that have average rental prices below $1,000 per month. With an average monthly rent of $808, Ohio has the eighth-lowest rental rates in the country. States with low rental prices typically have the lowest overall costs of living, and this reigns true for the state of Ohio.

With that said, examine the following table for the average rent in some of the various cities across the state of Ohio:

Ohio has what’s called a progressive state income tax, meaning you pay taxes based on your taxable income. While the state income tax rate is somewhat low compared to other states with an income tax, numerous municipalities in Ohio also charge an extra income tax. The state collects taxes based on income brackets, ranging from half a percent of taxable income to as much as 4.797%. Whereas, the Ohio municipal income taxes consist of rates as high as 3% in some areas.

Like Ohio, California has a progressive income tax, with ten income brackets in total. However, there is no local income tax in California, just a state income tax. Rates range from 1% for the lowest earners in the state to as much as 13.3%. California’s top marginal rate is the highest in the country, but it only applies to residents who make more than $1 million in taxable income.

Ohio’s statewide sales tax rate is 5.75%, but counties in the state also collect their own sales tax, ranging between 0.75% and 2.25%. With that said, the lowest possible sales tax in Ohio is 6.50% and the highest rate is 8%. Ohio’s average sales tax rate is 7.17%, the 21st-highest rate in the U.S.

California, however, has the highest base sales tax rate in the nation – at 7.25%. No matter where you live in the state, you have to pay an additional 7.25% of the purchase price on any taxable good. Counties and cities in California also collect their own sales taxes, meaning the actual sales tax rate paid across most of the state is much higher than the base rate. For instance, Los Angeles County’s sales tax is 9.5%, but if you make your way over to Glendale (located in LA County) the rate is a whopping 10.50%.

With a rate of 1.48%, Ohio has the 13th-highest average effective property tax rate in the country. Though, as this tax is mostly collected at the county level, the rate will vary based on where you live. For example, the effective property tax rate in Cuyahoga County is 2.44% but the effective rate in east Ohio’s Lawrence County is just 0.87%. Although property taxes in Ohio are above the national average, the rates remain lower than most of the neighboring Midwest states.

By contrast, California has an average effective property tax rate below the national average – at 0.73%. Passed in 1978, Proposition 13 has helped keep payments below the national average in California. This law set the maximum allowable property tax rate at 1% of a home’s assessed value and limited the increase in assessed value to 2% each year.

Whether you choose to live in California or Ohio, transportation costs are an expense that must be considered in order to understand the cost of living in either state. These costs include things like vehicle purchase prices, gas prices, transit passes, bus fares, and other public transportation expenses. Transportation costs are about 16% below the national average, likely due to the cheaper gas prices and public transportation costs.

With California’s transportation cost index of 133.1 and Ohio’s transportation cost index of 83.9, these expenses are much more affordable in Ohio than California.