The combined costs of housing and transportation have ballooned 44 percent in the nation’s 25 largest metropolitan areas since 2000, while household incomes have failed to keep pace, according to a new report.
Moderate-income households in the studied areas are spending an average of 59 percent of their income on housing and transportation, leaving little left for education, food, health care, and savings.
“If we really want to understand whether housing is affordable, we need to consider housing and transportation costs together,” said Jeff Lubell, executive director of the Center for Housing Policy. “Along with utilities, which we include within housing costs, these are the true ‘costs of place.’”
“Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation” was released Oct. 18 by the Center for Housing Policy and the Center for Neighborhood Technology. The study focused on households earning between 50 percent and 100 percent of the median household income in their area.
Researchers found that while costs grew by 44 percent, household incomes rose by just 25 percent, making it even more difficult for families to afford their costs of place.
The cost burdens were highest in the Miami area, where moderate-income households spend a hefty 72 percent of their income on housing and transportation. Miami was followed by Riverside-San Bernardino, Calif. (69 percent), and Tampa, Fla. (66 percent).
Miami’s high cost burdens are largely driven by the area’s low incomes, according to Lubell, who notes that housing and transportations costs were below average.
Other areas such as Washington, D.C., Boston, and San Francisco have high costs, but that’s matched by relatively high incomes to help families better afford their expenses.
The study describes several policy implications of the recent findings. For one, it will be important to preserve existing affordable homes in location-efficient areas. “Large-scale investments in transit and other infrastructure often lead to increases in property values that threaten the continued affordability of existing rental homes, and lead to property tax increases that make it difficult for low-income homeowners to afford their housing costs,” according to the report. States and localities can prevent the loss of affordable homes in hot-market areas by identifying and tracking affordable housing that is at risk of being lost and prioritizing funding sources.
To learn more, visit the Center for Housing Policy at www.nhc.org.