Study: Only 28 Percent of Neighborhoods Affordable

Tuesday, February 28, 2012 - 04:18 PM

In the typical definition of housing affordability, your rent or mortgage would be a third, or less, of your income.   And by that standard, some 76 percent of neighborhoods are affordable.  But when you add in transportation costs, the results are jarring:  fewer than a third of American neighborhoods -- just 28 percent -- are affordable.

Those results come by way of a new analysis by the Center for Neighborhood Technology in Chicago -- and they're significantly worse than results CNT published a year ago -- which looked at older data, and a smaller sample size.  In the older study, 69 percent of homes were affordable, based on 2000 census data under the narrower definition, while 39 percent were affordable adding in transportation costs.

"It's very stark," said the CNT's Scott Bernstein, who spoke of traveling through the country and seeing "entire subdivisions that got built and were never occupied, or are empty because people moved out."

For the last five years, on average, Bernstein says 200,000 families moved in with another family.

And these figures don't take into account recent spikes in gas prices.

The data also show what a profound difference good transit makes to transportation costs.   In the New York-New Jersey region, the average transportation costs is $10,158 a year.  But in areas with good transit, that number plummets to $1985.  Areas with the least access to transit cost $19,003 a year.

In Houston, the range is $7958 on the low end, and $19181 on the high end.  In Orlando, it's $9203 and $17705.

And in San Francisco/Oakland, it's $5368 and $19709.

You can see a ranking of metro areas, by transportation costs, here.


Comments [1]


This study is great and I'm sure there are many people out there who are hurting as a result of high gas prices in low density neighborhoods.

Bear in mind the way these economic calculations are made though from the individual perspective. If you already own a car, parking it in the city will be perceived as an expensive burden. The idea of doing without is probably too scary for most- at least in the initial calculus. The ability to get the amount of space you think you "need" would also be seen as excessively high in the city. This pushes you out of the core area where transportation alternatives might exist (which you may not have considered anyway). Since you already are paying most of the sunk costs anyway, the only added burden is really the gas which, until recently, was pretty negligible. Furthermore, it's not necessarily the case that living in the city means you will be close to work or transit accessible given more jobs being located in the suburbs. Finally, both household members in a couple may or may not be able to live somewhere that is convenient for both commutes, so often one will have to compromise (most likely the woman). Compared to the housing prices for the same square footage (not to mention parking costs, fines, and hassles) it's pretty clear why many people make this choice despite its seeming "irrationality".

The most logical 'solution' to this for most people will likely be to buy a more fuel efficient car, not to move into the city and start riding transit and biking- that is a very big leap, too big for most.

Also, I'm a bit suspicious of the methodology of using AAA 'average' car costs to determine what people are spending. I suspect that many of those who can't afford their transport costs to live far out are buying older cars (or not upgrading) to reduce those costs. Looking at average costs will tend to pump up estimates and skew the data.

Feb. 28 2012 06:15 PM

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