Transportation costs are making more places unaffordable

Philip Langdon
Better! Cities & Towns

An expanded Housing + Transportation Affordability Index, released Tuesday by the Center for Neighborhood Technology (CNT), shows that most Americans are finding it increasingly difficult to afford both their home and their means of mobility.

Two years ago, the H+T Index revealed that only 39 percent of US neighborhoods were affordable when transportation costs as well as housing were taken into account. A newly updated version of the index shows that the proportion of neighborhoods considered affordable has dropped significantly—to just 28 percent. 

The income of the median household has increased roughly half as much as transportation and housing costs have risen since 2000, CNT announced in a webinar and a report. 

By CNT's calculations, a place to live is affordable only when housing and transportation costs, taken together, amount to no more than 45 percent of median family income. By that standard:

• 72 percent of the nation's neighborhoods are out of reach of families making the median income in their region.

• Between 2000 and 2009, approximately 86,000 neighborhoods became too expensive for the typical family. 

Part of the problem is that median housing costs rose nearly 37 between 2000 and 2009, while the national median income went up approximately 22 percent. Another factor was a jump in average transportation costs—by 39 percent, or $318 a month—in the geographical areas covered by the report.

Transit-accessible housing needed

From CNT's perspective, a conclusion is clear: The nation needs more of its housing to be in walkable, transit-accessible locations. In those kinds of settings, people can reduce their transportation expenses significantly. 

When people have less of a need to own a car (or cars), their overall transportation expenses are lower. Of the regions with populations of a million or more, the least expensive in average transportation costs is the New York-Northern New Jersey-Long Island metropolitan statistical areas, according to the updated H+T Index.

The average annual transportation cost per household in greater New York—a region with a well-developed transit network and many walkable neighborhoods—was $10,158 in 2009, according to the index. By contrast, the figure was $14,928 in the Birmingham-Hoover, Alabama, area, the most expensive large metro area for transportation.

Key CNT conclusions: 

Despite the increase in transportation costs from 2000 to 2009, the Index shows that people living in location efficient neighborhoods—characterized by access to transit, jobs, and amenities—experienced a smaller increase than those living in car-dependent places.

The typical family living in a location efficient neighborhood in 2000 (where transportation costs were less than 15 percent of the national median income), saw average transportation costs increase by approximately $1,400 annually. Meanwhile, families living in inefficient neighborhoods (where 2000 transportation costs were greater than 15 percent of the national median income), had average transportation costs increase by more than twice as much, or slightly over $3,900 annually.

The difference between these two numbers, $3,900 and $1400 per year, is a benefit of $200 per month “less exposure” to the rising cost of gas during the decade.

CNT determined rankings and average annual transportation costs (click here for pdf download) both for large regions and for regions with between 500,000 and 1 million inhabitants. In the webinar, CNT President Scott Bernstein pointed out that the index, as expanded, covers 874 metropolitan and "micropolitan" areas, encompassing 89 percent of the US population. 

The index takes in nearly 180,000 neighborhoods, up from the 161,000 neighborhoods covered two years ago. CNT first launched the survey with a version covering 52 metro areas in 2006. 

To some extent, the results are disappointing."Despite the clear benefits to people's pocketbooks when living in location-efficient neighborhoods, we spent the first decade of the 21st century developing in location-inefficient places that put undue burden on household budgets, municipal coffers,and the environment," Bernstein said.

Of the nearly six million households added during that decade in the areas covered by the index, less than 1 percent were in location-efficient places. "We have to do better," he declared.

But this is a long-term effort, and CNT sees reason for hope. Since the start of the index, an array of cities and organizations—including federal agenies, private planning firms, housing counselors, and streetcar advocates—has used the index for planning and policy purposes. 

"Regions with transit systems should be developing TOD [transit-oriented development] everywhere," said Maria Choca-Urban,  director of CNT's Transportation and Community Development Program. The more people who live near rail, bus, or streetcar service, the better the prospects of reducing the typical household's outlay for transportation. 

Gasoline is estimated to make up 27 percent of the cost of automobile transportation, Bernstein said. Though gasoline was selling for $1.50 to $2 a gallon in 2000, it has risen substantially since then, spiking in 2008 and again in May 2011. "It's now ahead of both" those spikes, he noted.

A chief influence on transportation costs is residential density. With more people, transit at frequent intervals becomes more economically feasible, making it easier for people to do without a car. 

Figures in the H+T Index are available at the CNT website in many different permutations, accompanied by maps at various scales.

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