Walkable places are economical, too
We know city living is in demand, but the fact that cities still reduce cost of living relative to drive-only suburbs needs to be more widely recognized.
This article is published in the January-February print issue of Better! Cities & Towns.
One of the persistent criticisms of urban revitalization and New Urbanism is that it is not affordable. Cities are great but they are more expensive, right? On the contrary, the cost of living in cities is less than in outer suburbs. Walkable places, in cities or suburbs, are generally easier on the budget than their drive-only counterparts.
Those statements may be counterintuitive, because walkable places command a premium for housing. Each additional point of Walk Score (walkscore.com) is associated with between a $700 and $3,000 increase in home values, according to a nationwide 2009 study by economist Joe Cortright for CEOs for Cities.
Furthermore, housing in the most sought-after urban neighborhoods can be very costly — and the media highlights these extremes. “Most expensive neighborhoods in San Francisco detailed by terrifying heat map,” exclaimed a headline in the Huffington Post last year. One-bedroom apartments in Pacific Heights, one of the priciest neighborhoods in the US, average $2,700/month, the map showed. When people think about city living, figures like that probably comes to mind.
Transportation costs are often ignored. The cost of car ownership is divided among many expenses: Monthly payments, insurance, maintenance, and gas. How these costs change based on geography is harder to calculate than simple housing prices.
Yet extensive research over the last decade shows that urban families save thousands of dollars on transportation. This shouldn’t be too surprising. Owning a car costs about $9,000 a year, according to the American Automobile Association. A family that eliminates one or more cars, or even drives substantially less, saves a lot of money. The difference in transportation expenses between a family living adjacent to downtown and one in the outer suburbs is about $7,000 a year. That’s after-tax money, translating to about $10,000 per year in income, which buys a lot of house.
There are exceptions, of course. If you drive a Ferrari or have a long daily commute to the suburbs, your transportation costs will be high even if you live in the city.
But in general, city living is relatively affordable. This can be confirmed with a few clicks on the computer. Recently, US Housing and Urban Development (HUD) and US Department of Transportation (DOT) launched the Location Affordability Portal, designed to allow consumers to easily check the combined cost of housing and transportation in neighborhoods across the US (www.locationaffordability.info). A nontechnical web tool that combines housing and transportation costs by location is a big step forward.
Nearly half of the household budget
Housing and transportation are the two biggest items in family budgets, accounting for 48 percent of US household expenditures, reports the Center for Neighborhood Technology. For moderate-income families, that figure amounts to nearly three-fifths (59 percent) of the budget. Yet these costs are not fixed, and the neighborhood families live in has a powerful impact on what they pay — and what they have left over for food, clothing, medical care, education, recreation, retirement, and other expenses.
Misunderstandings in this area are not helped by many urbanists, myself included, who repeatedly emphasize that high demand for urban places — especially on the part of the so-called creative class — is driving up values in mixed-use neighborhoods. This sounds great for urban revitalization, but not so great for affordability.
We also have to admit that many urban neighborhoods do have issues with rising housing costs. Especially in cities with global appeal like New York, San Francisco, or Seattle, policies are needed to maintain affordability. But that reality should be tempered by the knowledge that car-optional neighborhoods are still the most economical places to live and they are likely to remain that way for a long time.
The way to improve affordability is not be fight urban revitalization, but to preserve and build more walkable, car-optional places in both cities and suburbs to meet growing demand. While urbanists trumpet the market demand for walkable places, they should add that cities are also the most economical option. Cities and walkable towns are the key to reducing combined housing and transportation costs.
Robert Steuteville is executive director of Better! Cities & Towns.