"A Heavy Load: The Combined Housing and Transportation Burdens of Working Families"

As I was looking around the Richmond Fed website, I came across this research on the amount working families spend on housing and transportation. This is the the introduction to the study and a summary of the findings.

The main point is this. As we think about imposing tolls to drive into cities in order to control congestion, and with many people claiming that working families rely upon public transportation so the toll will have little impact on them, we need to keep this research in mind. It suggests that housing and congestion problems are related, and that there are others measures we can take besides or in addition to the imposition of tolls to help with congestion problems. But most of all it suggests that in areas where housing prices are high, families often locate far from their workplaces to reduce housing costs, and then rely upon private transportation to get to and from work:

A Heavy Load: The Combined Housing and Transportation Burdens of Working Families, by Housing Policy Chairman Kent W. Colton, Center for Housing Policy, October 2006:  Nationally, for every dollar a working family saves on housing, it spends 77 cents more on transportation. This was one of the dramatic findings from the Center’s earlier study, Something’s Gotta Give, which reflects the basic tradeoff many working families face between paying a greater share of their income for housing or enduring long commutes and high transportation costs. But how does this tradeoff play out at the local level? Are there metropolitan areas in which this tradeoff is more or less pronounced? Where do working families end up living within each area, and how does the availability of housing affect their choices? And how does the varying cost of housing and transportation within a region affect families’ combined  housing and transportation burdens?

To answer those questions, the Center conducted a new study whose results are summarized in this publication. Among other innovations, this study presents, for the first time, the combined housing and transportation cost burdens of working families in 28 metropolitan areas at the neighborhood level. It also provides an overview of where working families live in each of the 28 areas and how their location decisions affect their commute times and costs. The study provides a particularly detailed look at 10 metropolitan areas—Atlanta, Chicago, Dallas-Ft.Worth, Denver, Greater Los Angeles, New York City, Pittsburgh, Portland, the San Francisco Bay Area, and Washington D.C.-Baltimore. Detailed information on these and the other 18 metropolitan areas studied is available at: http://www.nhc.org/index/heavyload.

On average, the study found that working families in the 28 metropolitan areas spend about 57 percent of their incomes on the combined costs of housing and transportation, with roughly 28 percent of income going for housing and 29 percent going for transportation. While the share of income devoted to housing or transportation varies from area to area, the combined costs of the two expenses are surprisingly constant. In areas where families spend more on housing, they tend to spend less on transportation, and vice-versa. However, in all the metropolitan areas there are neighborhoods where working families are saddled with both high housing and high transportation cost burdens.

In their search for lower cost housing, working families often locate far from their place of work, dramatically increasing their transportation costs and commute times. Indeed, for many such families, their transportation costs exceed their housing costs. Recent census data suggest this trend may be accelerating. Of the 20 fastest growing counties in the United States, 15 are located 30 miles or more from the closest central business district.

The study also found impacts on the community. As more and more working families commute to distant job centers from their homes, clogged and congested roads become the norm in surrounding communities.

A growing number of communities are identifying the lack of affordable housing and the increase in commute times and traffic congestion as priority issues. But they haven’t always linked these two sets of issues. This study suggests it is imperative for cities and regions to consider housing and transportation policy together. The study also points to the importance of infill development that expands the supply of affordable housing in inner city and older suburban neighborhoods that have good access to traditional job centers; the development of more affordable housing near transportation hubs and suburban employment centers; providing good quality and reliable transit for suburb to suburb commuting, as well as for helping families in the outer suburbs get into the central city; and policies to encourage car sharing and to reduce the costs of car ownership for families who cannot easily get to work via public transit.

The Center hopes the information in this report will be a catalyst for the development of more integrated policymaking at the local, regional and national levels that helps to reduce the heavy load of housing and transportation for working families and the communities in which they live.

Comments

[robertdfeinman]

Here in NY there have been two trends which I don't think this study addresses adequately. The first is reverse commuting.

Both Long Island and Westchester have seen a rise in workers coming out to the suburbs from NYC. The volume has increased enough that it is making the commuter train scheduling an issue. Several lines mostly go only one way during rush hour and adding to the reverse direction is causing problems. Long Island is considering adding a third track on the main line to accommodate the extra traffic.

The second issue has to do with intra-suburb travel. Half the traffic on the Long Island Expressway is people going from one place on the island to another. The rise of suburban office parks also makes the presence (or lack of) a central downtown not as important as formerly.

However if the conclusion is that people move further away because housing is cheaper, I think this is already well known.

[Voltaire]

Please, give me a break...

Choices, choices, choices... No one needs an SUV that gets 3 gallons to the mile. No one needs to live 50 miles away from work. No one, or family needs 4,000 sq ft. Spoiled rotten are they, let them hang. But first drain every last dollar of equity from the depreciating home and max out the cards at 25%.

[bakho]

If the city schools near the work are not good, then private schools may be the best option for urban residents. However, it may be cheaper to live in a good school district in the burbs and pay for transporatation that to pay for private schools. A lot of Singles and DINKS live in the city but move to the burbs once they have kids in school. There are a lot of factors in the equation that should be considered.

[Robinia]

Agree with bakho on this-- location decisions are very much influenced by school quality for families with school-age children. S0: one of the most cost-effective measures for states and communities may be to use state aid to schools to level the playing field among school districts, as these same public fund sources are also responsible for much of the funding for roads, affordable housing projects, and social-safety-net programs for overstressed families...

[Anamolous]

It seems that the 77 cents of transportation spent for each dollar of housing saved are just out of pocket costs. I might need to read more closely to confirm that but I would guess many people are actually draining total wealth by moving out to the boondocks (exurbs?). This might be the answer to the prior post's quesion of peoples' rationality.

[Icarus]

Perhaps the real costs of "family life" will induce our population to PLAN before having a family, and not complain afterwards for very predictable costs.

says...

What Heavy Load?: The Combined Housing and Transportation Burdens of Working Families. If anything, let the GAINS they experience from Globalization pay for these new costs!

[ken melvin]

When the average home cost $800k+ (<2000sf)as it does in the SFBay Area, it's hard to get by on a teacher's, policeman's, bus driver's, ... salary. Ala young working women of the sixties, young working people and older retired, are sharing.

[David]

I'm also in the bay area and draconian zoning laws are a big problem. It is practically impossible to build new, high density housing in Berkeley. In addition, the tenant laws are so ridiculous that some people don't want to rent there. The result is that housing is hard to find and unnecessarily expensive, so people commute longer.

[Outside the Box]

Eliminate non safety zoning regs, and the free market will provide affordable housing where people want it. Another factor is crime in some neighborhoods. Get rid of the violent/property crime, and people will move back into these neighborhoods. This will further relieve congestion/housing costs.

Of course, the big objection to affordable housing is often that affordable housing collects less in property taxes. Funding the public school system with regressive property taxes is creating problems.

[cm]

"In their search for lower cost housing, working families often locate far from their place of work, ..."

This statement carries the connotation that the "place of work" is a constant, and people "choose" to live far away from it. But in many cases people live where they happen to live, and have to go wherever the jobs are.

What if you lose or have to give up your job to which you are situated well traffic-wise, and can only find a new job a dozen miles down a congested freeway? Are you supposed to be "flexible" enough to uproot your family every time you change jobs? What if you cannot afford housing at your new job?

"Move closer to your job" doesn't work for everybody, and probably not even for most.

[Bruce Webb]

"No one needs to live 50 miles away from work".

That is a very urban-centric and dare I say eastern point of view.

People might not like the fact that cities in the west got much of there growth post-war in a housing model that favored single-family detached but that is the reality on the ground. It is not at all unusual for people to have to be 50 or more miles away from employment centers to find affordable housing. Too you need to take into account the needs of people who live at work but need to regularly drive to town to do business, e.g. farmers
_______________
Anyway thanks for the post Mark. For anyone who lives outside an urban core the whole 'Poor people don't need cars' argument is patent nonsense. Generally West Coast cities are trying as hard as they can to build and promote transit but are generally working in a very tax averse environment that makes it hard to fund transit.

[SanFranciscoJim]

There is a big difference between "the poor" and "working families" and I don't think any disputes the fact that middle class families spent a lot of time and money driving. The question is who should pay for their massively subsidized suburban lifestyle?

Why should non-automobile owners have to pay for the explicit costs of roadway building and the implicit costs of higher land and housing (due to all the land being set aside for roads and parking) and the externalities due to congestion and pollution, not to mention increased health care costs related to automobile accidents.

If we continue to make it "free" for drivers to move farther and farther from work, of course they will do so, in search of bigger housing. Congestion pricing will make the people who are causing the burden to society to have to pay it. Of course congestion pricing can't do it alone, what we really need is congestion pricing on overcrowded corridors like city centers, combined with a carbon tax on gasoline.

All economic changes cause a certain period of painful re-adjustment, but the current system, that rewards anti-social behavior, is at the root of most of our housing and transportation difficulties. Now there is going to have to be some kind of allowance made for people who simply cannot pay, but for most people it is simply going to mean adjusting their life style to fit within their budget, which is an adjustment everyone has to make.

The idea that eliminating all zoning laws will create some kind of libertarian utopia is shown to be a fallacy by the example of Houston. Unless you really think Houston is Utopia.

[Worker]

"What Heavy Load?: The Combined Housing and Transportation Burdens of Working Families. If anything, let the GAINS they experience from Globalization pay for these new costs!"

Funny, but actually true. After all, how would they fill up that treeless McCrackerbox without lots of plastic lawn toys and cheap furniture made in China. Filling 4000 sq feet with shiny bawbles at at US union wages would not be easy.
(if there are still bawblemakers located in the US)

I heard a theory that exurban men actually put positive value on the 2 hour daily commute because it gives them time away from the miserable predicament they were driven (no pun intended) by their wives.

[prostratedragon]

Surely all congestion problems need not be addressed the same way? The study maps can help clear a path through the aggregation bias of all those averages (CMSAs!*). A first guess toward a not-too unfair policy might be that the people in the gray areas on the study maps (average housing costs, above average transportation), should not, on net, suffer undue additional burden.

Using Chicago and New York as examples because I know getting around in them well, there is no radial commute I can find on either mapfrom a gray area into Midtown/Lower or Downtown/Loop (Adams-Clark-Oak congestion boundary, anyone?)that cannot be made by ditching one's car en route and taking transit the rest of the way for a round trip under several dollars. One reasonable use for the revenues from a congestion tax would be toward making those connections even easier, e.g. by improving commuter parking, running rush hour shuttles, or whatever. In a properly run program with people using outlying parking near transit, the savings in extra car wear, parking, ticketing, and towing costs, cruising for the parking spots which are rarely available (I have heard somewhere that Manhattan has some pitiful number like 20,000 or so street spots, and downtown Chicago is proportionately just as bad), and similar wastage might finance much of the cost of the bus pass.

Clearly, the suitability of congestion pricing will be affected by the quality of public transit within the congestion zone, as well as between that zone and non-congested areas. But if there is congestion without transit, then perhaps those places should be encouraged to think of their problem as a lack of transit, and not as congestion.

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* The CMSAs are so large that the accompanying maps seem to truncate them some, e.g. the Wisconsin part of Chicago CMSA, Putnam, Dutchess, Monmouth, most of Middlesex, Suffolk counties and part of Connecticut of the New York CMSA. These huge masses of demographic and spatial experience are great for some purposes, like maybe the study, where the authors are trying to find and stratify an average relationship between housing and transportation cost, for all purposes and entire families, in order to make statements about future land use policies. But for our case, where the point is to discourage strongly certain behavior in the presence of feasible alternatives, CMSA data aggregate out a lot of the particular effects of interest, which concern who goes to particular areas within a city/metro and how they choose to get there, and dilute them with lots of extraneous cases.

[real person from the real world]

In the world of IT, you are getting more who "telecommunte" or work remotely. There are lots of reasons why people move to the suburbs: like more green space and better air, a bit more distance between the you and the neighbors, less traffic (except on major highways during the rat race. During the 1800s you had tenements, then as people got more money, especially after WWII, they wanted cheap housing in green places where they could raise children. For those who must communte, the toll is a price they pay. For the new pay as you go world, tolls are another sure way for the state to get money, less controversial then raising taxes.

[Anonymous]

If the epic-length commute is "worth it" now, it won't be in the future as fuel prices climb higher than a U-2 spy plane. A former coworker makes a case study as of last year. I had a coworker living 60 miles away becuse housing was "affordable". But he drove a big pickup truck - and thus lived 4 gallons away. Each way, last summer with gas at $3/gallon, he spent $24 per day just for the gas! Earning about $120/day in take-home pay, he had the gas, the loan, upkeep, etc. on that truck. He was spending _at least_ a third of his income just to support the commuting mission to the job! He quit on finding a job closer to his home.

Moral: Don't buy a big truck!

says...

Of course, the big objection to affordable housing is often that affordable housing collects less in property taxes.

This is patently wrong. If zoning regulations were eliminated, it would become feasible to build higher-density housing and total assessed values would actually increase.

[teb]

The simple point is that when people are choosing housing, they should consider the cost of transportation associated with different housing options in their decision-making process. Related is the fact that when the federal government subsidizes housing for low income families they cap the total amount a family can pay to 30% percent of their income without accounting for whether a shift to 35% or even 40% of one's income devoted housing could lower transportation costs. Because transportation and housing costs tend to be inversely related they should be looking at the combined cost. A similar situation exists with residential mortgages where a family may be willing to pay more and maybe sell off a car to live in an urban area where their transportation costs will be lower but they can't qualify for the mortgage even though they are making a perfectly reasonable tradeoff that will result in equal or lower total expenses (http://www.locationefficiency.com/).
See also http://www.cnt.org/ht/.