THE VIRGINIAN-PILOT  
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Friday, January 19, 1996               TAG: 9601190713
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY CHRISTOPHER DINSMORE, STAFF WRITER 
                                             LENGTH: Medium:   54 lines

LIVING COSTS FOURTH-LOWEST AMONG AREAS OF OVER 1.5 MILLION PEOPLE

Thanks to low housing costs, Hampton Roads is one of the nation's least expensive metropolitan areas in which to live, a new study has concluded.

According to the American Chamber of Commerce Researchers Association, Hampton Roads is the fourth least expensive place to live of 24 metro areas with populations of more than 1.5 million.

Only Houston; Tampa-St. Petersburg, Fla.; and Fort Worth, Texas, had lower costs of living than Hampton Roads. The most expensive place to live was New York City, followed by San Francisco.

A lower cost of living doesn't necessarily mean that residents have an easier burden, however, because businesses can pay employees less, a local economist cautioned.

The cost of living in Hampton Roads is 97.1 percent of the national average, according to the American Chamber survey released Thursday. The survey is based on the third quarter of 1995.

But private-sector wages in the region are just 81 percent of the national average, said John Whaley, economist for the Hampton Roads Planning District Commission.

``If we pay costs that are near the national average, but we're paid much less than the national average, our purchasing power is below the national average,'' Whaley said.

Still, a low cost of living helps attract economic development such as the synthetic paper plant for Chesapeake that was announced Wednesday. Companies want to locate in Hampton Roads in part because it's just a less-expensive place to live and do business.

The survey is based on a composite of costs, including groceries, housing, utilities, transportation, health care and miscellaneous goods and services.

Where Hampton Roads residents saved money was in housing costs. Housing costs in the region were 86.9 percent of the national average. The national average is compiled from 322 urban areas of all sizes.

In nearly every other category, costs in Hampton Roads exceeded the national average, led by utility costs at 108.6 percent of the national average. Transportation cost 105.8 percent of the average, and groceries cost 102.6 percent.

Affordable land contributed to region's inexpensive housing, Whaley said. But one of the biggest costs of housing is labor, so the region's low wages helped drive down housing costs, he added.

But the cost of living has been steadily creeping up toward the national average. ``Our cost of living in Hampton Roads is rising relative to what is happening in other areas of the country,'' Whaley said.

KEYWORDS: COST OF LIVING CHEAPEST SURVEY RATING by CNB