HARLINGEN — When it comes to saving money, the Rio Grande Valley is the country’s sweet spot.
To prove it, two of the Valley’s biggest cities have earned top marks as the nation’s most affordable places to live.
A new economic study by the Council for Community and Economic Research has Harlingen and McAllen one-two when it comes to least expensive urban areas.
Among the Top Ten, the only other Texas city to make it was Wichita Falls at No. 6.
“I think it’s always good to get our communities mentioned as desirable places to live,” said Sergio Contreras, president and CEO of the Rio Grande Valley Partnership in Weslaco.
“It’s housing, primarily housing, that’s one of the main indicators that is part of that study,” he added, “as well as groceries, access to groceries, for families and some of our restaurants.”
The most expensive cities, the survey found, were New York City’s Manhattan borough, San Francisco, Honolulu, Hawaii, New York’s Brooklyn area and Washington, D.C.
Groceries cost less, too
When it comes to least expensive groceries a companion ranking puts Harlingen and McAllen near the top there, too.
Kalamazoo, Michigan, is No. 1, followed by the Texas cities of Waco, Temple, Harlingen and McAllen.
“As far as food products, for the most part, the closer to the source the lower the transportation costs,” said Raudel Garza, CEO of the Harlingen Economic Development Corp.
The Valley’s strong agricultural industry, along with being near the border, makes produce grown in Texas and Mexico cheaper than fruits and vegetables at markets in, say, Illinois or Montana.
“That’s one of the great dynamics that we encounter here is being that we’re at the entry to the United States and it allows us the opportunity to get access to low-cost agricultural produce either harvested here in the Rio Grande” or brought in from Mexico, Contreras said.
“Also, the avocados and fruits that are crossing, they’re coming in and we have an opportunity to get them faster and also fresh on our shelves and then to the table, and that’s a good thing.”
Texas also is by far the nation’s No. 1 beef producer, and again fewer transport miles can be expected to keep those prices lower than elsewhere in the nation.
The highest grocery costs — transportation certainly plays a role in most of this list, too — are found in Honolulu, Hawaii, Juneau, Alaska, Manhattan, New York, Anchorage, Alaska, and Oakland, California.
Draw for Winter Texans
Having such a low cost of living has made the Rio Grande Valley that much more attractive to Winter Texans, and goes a long way in explaining why they’re not Winter Arizonans.
“Definitely a part of the reason why they come down is the lower cost of living,” Garza said. “Because they can get more for their buck. And actually I’ve heard from different people, that’s why they came down to South Texas. They moved to South Texas because they liked the climate and they liked the low cost of living, the affordability.”
The Winter Texan remains a crucial part of the Rio Grande Valley’s economic base. The latest in a series of surveys of Winter Texan spending conducted every two years by UTRGV shows they injected $760 million into the Valley’s economy in 2015-16, down slightly from a high of an estimated $803 million in 2009-2010.
“Winter Texans are a key economic driver of our region, so it’s great that they see that their dollars are stretched even more in our region, with the ability to give our local restaurants, our local tourist places, a boost to help our local economy,” Contreras said.
Aid to business recruiting?
Some economic development professionals see local economic conditions, like housing costs or whether a state levies an income tax, as inconsequential because the highly-paid executives within companies who make relocation decisions enjoy salaries that make such considerations moot.
But Garza said that, on the whole, the low cost of living in the Valley makes the region more attractive when it comes to attracting new businesses.
“Yes it is, in a couple of different ways,” he said. “On the positive side, if they transfer folks in from high-cost areas, they are giving them basically a pay raise by coming down to this area.
“A lot of people come in from areas where housing is really expensive and they come over here and all of a sudden, ‘You know what? For the same amount of money I can get a house that’s almost twice as big,’ that type of thing,” Garza said.
“People pay attention to that, management pays attention to that,” he said. “That’s the great side.”
Other side of the coin
Garza also believes having such a low cost of living in a region can be a detriment in ways people may not recognize, potentially contributing to keeping wages depressed for the region’s workforce.
“There’s a little bit of a negative because they’ll also say, ‘Oh, we don’t have to pay them as much,’ and some companies do that, but not all,” he said. “Thank goodness not all companies do that.”
But he said the perception persists that companies take advantage of the Valley’s low cost of living to pay their workers less than they would in other parts of the country.
“I think that a lot of people feel that companies don’t pay as much because they don’t have to, and I don’t know if that’s as true now as it used to be,” he said. “But it does make a difference. It makes people wonder if like, ‘OK, are we really about 25 percent cheaper than the average city in America?’
“Because that’s what that means,” he said of the new economic study. “And are we really about 50 percent cheaper than the big cities? And the answer is yeah, we are, in a lot of different categories.”
For his part, the RGV Partnerships’ Contreras said the lower cost of living here must be balanced with a commitment to bringing better-paying jobs to the region for Valley workers.
“I think as our economic development corporations, our community leaders and those from the business community, as we continue to advocate and improve the quality of life, we’ll always engage with cost-of-living opportunities that are lower than other parts of the country,” Contreras said.
“However, our goal will be also to help increase the wages that our employees are earning in our area. We’ll continue to work for and advocate for higher wages.”