What Is The Cost Of Living In Denver Vs. Chicago?

When considering a new place to call home, Denver and Chicago may be at the top of your list – and for good reason. Both of these cities have much to offer potential residents. On the one hand, Denver gives you the best of both worlds: all of the convenience and amenities of a major metropolitan area, with a laidback and outdoorsy lifestyle due to the city’s awe-inspiring nature.

On the other hand, Chicago is a central hub that gives you access to easy world travel, and is a city full of excellent food, diverse neighborhoods, great public transportation, and a strong economy. But, how do these two major cities compare when it comes to cost of living?

The overall cost of living index in Denver, Colorado is 127.8, meaning it is nearly 28% more expensive to live in Denver than the national average (100). Chicago, Illinois, on the other hand, has an overall cost of living index of 107.4, so it is quite a bit more affordable than Denver but still higher than the national average. Denver’s median home price is $534,100, which is a whopping 83% higher than the national average of $291,700. Meanwhile, the median home price in Chicago is just $291,200 – slightly lower than the national average and 45.5% less than Denver.

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

The cost of owning a home in Denver is significantly higher than in the rest of the country. Whereas, housing prices in Chicago tend to be pretty on par with the national average. The median cost of a home in Denver is a staggering $534,100, while Chicago’s median home price is only $291,200. With these numbers in mind, cheaper housing can be seen as an advantage to living in Chicago over Denver.

Looking at housing cost indexes can give you an even better picture of how home prices vary in Denver versus Chicago. Based on an overall US average of 100, Denver’s housing index is 184.3 and Chicago’s is 99.1 This means that housing in Chicago, Illinois is about 46.2% more affordable than Denver, Colorado. Of course, prices will vary depending on where you live in either city. As you might expect, the closer you live to the city center in both Chicago and Denver, the more expensive the homes are going to be.

Like home prices, rental rates vary based on a few different factors, including size, quality, and location. The average rent for an apartment in Denver, Colorado is $1,824 per month and the average apartment size is 841 square feet. Though, the rent that you will pay in Denver ultimately comes down to the neighborhood that you live in.

For example, the most affordable neighborhoods in Denver in terms of rent are Barnum, Mar Lee, and Westwood, each of which have average monthly rental prices of $1,071. Whereas, the most expensive neighborhood in the city is LoDo, with an average rent of $2,285 per month.

With that said, refer to the following table for a breakdown of the average monthly rents in some of the many neighborhoods across Denver:

On the other hand, the average rent for an apartment in Chicago, Illinois is $2,059 and the average apartment size is 750 square feet. This means that, on average, apartments are both more expensive and smaller in Chicago than Denver.

However, like Denver, rental prices vary in Chicago based on the specific neighborhood you rent in. For example, the most expensive neighborhood in Chicago is Streeterville, with an average rent of $2,716 per month. Whereas, The Island is the most affordable neighborhood in Chicago, where average rent is only $654 per month.

The table below displays a more comprehensive overview of the average monthly rent in some of the many Chicago neighborhoods:

The state of Colorado has one of the lowest income tax rates in the nation (among those that have a state income tax). Both Colorado and Illinois have flat income tax rates. This means that, regardless of your income level, you pay flat rate. In Colorado, the income tax rate is 4.3%, which is considered to be in the middle of the pack among the eight other states with a flat income tax rate.

Illinois, on the other hand, has a flat income tax rate of 4.95%. Although this rate is higher than Colorado, the drawback to this whole system is that low earners in both states tend to pay more than many other states that have a progressive income tax system.

Although Colorado’s statewide sales tax of just 2.9% is one of the lowest in the country, the actual sales tax is higher in most cities. Because of the additional city and county sales taxes, the total sales tax rate in Denver is 8.31%.

The sales tax system in Illinois is even more complicated, with three rate structures depending on what you purchase: vehicles, food and drugs, and general merchandise. Groceries, medicine, and drugs are subject to a statewide sales tax rate of 1% of the purchase price, with extra local taxes of up to 1.25%. In Chicago, you pay as much as 2.25% on these goods.

Vehicles in Illinois have their own tax rate, ranging from 6.25% to over 8.50%. Whereas, the state’s general merchandise sales tax applies to any other product purchased for use in Illinois. While the state’s base rate is 6.25%, the additional local taxes brings the total general merchandise sales tax in Chicago to 10.25%.

Denver’s average effective property tax rate is 0.50%, which is considerably lower than the national average of 1.07%. This means that the median annual property tax payment for Denver homeowners is just $1,771.

Surprisingly, property taxes in Chicago’s Cook County are lower than the state mark, with an average of 2.10% compared to 2.16% at the state level. The average Chicago homeowner pays annual property taxes that range from $2,400 to just under $6,000, depending on where exactly in the city you live.

The median household income in Denver is $60,098, which is around 4.2% higher than the national median household income of $57,652. When compared to Chicago, however, Chicago residents make nearly 13% less than Denver residents – with Chicago’s median household income of $52,497. This means that, overall, there’s a good chance that you could make more money in Denver than Chicago.

Though, Chicago has a much higher unemployment rate than Denver. The unemployment rate in Denver is 7.1% and the unemployment rate in Chicago is 9%. Both rates are higher than the national average of 6.0%.

As food and groceries are expenses that people encounter on a daily basis, the overall grocery and food index is another factor that impacts the cost of living in a particular location. If you live in Chicago instead of Denver, you’d be looking at a bout a 4.6% savings on food and groceries.

The overall grocery cost index in Denver is over the national average of 100, coming in at 101.9. Whereas, Chicago’s grocery index is less than the national average, at 97.2. Refer to the following table for a more detailed look at the average prices of groceries in Denver vs. Chicago.

Whether you choose to live in Denver or Chicago, transportation costs must be considered in order to accurately determine the overall cost of living in both cities. These costs include expenses like gas prices, vehicle purchase costs, bus fares, monthly transit fees, and other public transportation expenses.

According to World Population Review, Chicago is considered the third-worst city in the country for traffic and Denver doesn’t even make the top ten list. Both cities, however, have some of the best public transportation systems in the nation. With Denver’s transportation cost index of 116.1 and Chicago’s transportation cost index of 138.5, you’d enjoy a savings of about 16% in Denver.