Working Families Pay More for Transportation Than They Save on Affordable Housing

Detailed Data for 28 Major Metropolitan Areas Nationwide Finds That Moving Further From Work to Afford Housing May Not Mean More Money in Your Pocketbook

Washington, DC (October 11, 2006) – Low- to moderate-income working families are finding that as they move further from work to afford housing they end up spending as much, or more, on transportation costs than they are saving on housing, according to a new study of 28 major Metropolitan areas nationwide entitled A Heavy Load: The Combined Housing and Transportation Burdens of Working Families (http://www.nhc.org/pdf/pub_heavy_load_10_06.pdf).

Conducted by the Center for Housing Policy, the research affiliate of the National Housing Conference (NHC), the study also found that the combined burden of transportation and housing costs for working families was remarkably constant across all the Metropolitan areas studied at an average of 57 percent of annual income. This comprehensive study was conducted with support from the John D. and Catherine T. MacArthur Foundation and was released today in coordination with NHC’s 75th Anniversary Policy Summit in Chicago, IL.

“Working families are increasingly moving further from their jobs to find affordable housing. Yet, we found that many of these families end up spending more on transportation costs than they save on housing,” said Jeffrey Lubell, executive director of the Center for Housing Policy.

“Ultimately, these findings emphasize the importance of coordinating the development of housing and transportation policy, as well as expanding the supply of affordable housing close to both central city and suburban job centers, improving public transit in areas with lower housing costs and reducing the costs of commuting by car for working families.”

Housing and Transportation Tradeoffs

In 17 of the 28 Metropolitan areas studied, the average transportation expenses for working families with annual incomes ranging from $20,000 to $50,000 are actually higher than their housing costs. Overall, across all 28 Metro areas, working families spend an average of 28 percent, or $9,700, of their incomes on housing and nearly 30 percent, or $10,400, on transportation. Transportation costs are based on auto ownership, auto use and public transit use and take into account the cost of commuting, as well as traveling for school, errands and other daily routines.

While the share of income that working families devote to housing and transportation differed from Metro area to Metro area, the combined burden of the two expenses was remarkably similar across all areas. These combined costs range from a low of 54 percent in Pittsburgh to a high of 63 percent in San Francisco, with 25 of the 28 Metro areas within three percentage points of the average combined burden of 57 percent.

Among all American households and income levels, and not just working families, housing and transportation are also the two largest expenses, but consume a smaller share of income at a total of 48 percent.

How Working Families Get to Work

The vast majority of low- to moderate-income working family commuters – more than 85 percent – in the 28 Metro areas studied drive to work in private vehicles. Commuters in some Metro areas take advantage of public transit alternatives such as extensive rail systems and buses. By far, public transit serves the greatest share of working families in the New York Metro area at 31 percent, followed by Chicago, IL at 14 percent and Washington, DC at 13 percent. The Metro areas of Boston, MA, Honolulu, HI, Philadelphia, PA and San Francisco, CA all have an average of 12 percent of commuters taking public transit.

Housing and Transportation Policy Recommendations

Numerous policy recommendations have emerged as a result of these findings.

Specifically, it is essential for regions to coordinate their housing and transportation policies to ensure they fully reflect the needs of working families – one example includes building more affordable housing near existing and planned transit hubs. Additional recommendations include redevelopment of inner city and older suburban neighborhoods near job centers and targeting job development in low- to moderate-income neighborhoods in central cities and inner-ring suburbs. Policies to encourage car sharing and make car ownership more accessible and affordable could also help reduce the transportation cost burdens of working families who must commute by car.

 

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Filed under New Urbanism: Timeless, Traditional, Walkable Design, Sprawl and Suburbia

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