(Houston, TX -- Gail Delaughter, KUHF) A new study shows many Houston neighborhoods considered as "affordable" may turn out to be a lot more expensive when you factor in the cost of transportation. According to the figures, some people in and around the nation's fourth-largest city find themselves paying more to travel to work and school than they do for a place to live.
Using data from census block groups, the Chicago-based Center for Neighborhood technology calculates 25.4 percent of their income for a place to live. That's considered affordable under standards from the real estate industry and the U.S. Department of Housing and Urban Development.
But when it comes to transportation costs, people in the region are shelling out close to 26 percent of their pay. CNT's Scott Bernstein says it peaks out at 36 percent for commuters living in some of the far-flung areas, including the Bolivar Peninsula 50 miles to the southeast and Bay City about 80 miles to the southwest. Those commuters could find themselves in a situation where they're paying in excess of 60 percent of their income for the cost of location.
Bernstein says house hunters hit U.S. Highway 59 to the north, I-10 to the east and west, and I-45 to the south, in a situation known as "drive until you qualify."
"You've found the more affordable house, but you might need to go to one to two cars per household. And if you have a teenager in the house, and an extended family, maybe three cars per household. Then all of a sudden the price of transportation is more than the cost of housing. Your cost of housing may drop, but your net costs of housing versus transportation can go up."
Figures show households around Houston on average pay a little over $13,000 a year for transportation but Bernstein says a lot of people don't take these figures into consideration when putting together their financial plan.
He says you get a lot of information when you buy a house concerning property taxes and utility fees, but nothing concerning the costs of commuting. Bernstein's organization is encouraging local governments and the real estate industry to adopt disclosure requirements so when properties go up for sale or rent, information about the "hidden" costs of transportation are made available.
Bernstein cites as an example the city of El Paso, Texas, which has passed an ordinance requiring that housing intended to be affordable not be located in areas with high transportation costs.
Bernstein says local planning agencies need to look at these costs when allocating resources for developing new modes of transportation. He says new transit lines would lower the cost of living for people who reside far from their jobs, and he says the cost of living will drop for many Houston-area residents once three new light rail lines begin operation.
As for educating prospective homeowners on the real cost of living, Bernstein says financial literacy programs also need to do a better job of helping people balance the cost of their dream home with the practical costs of getting around.