Housing and Transportation Costs Put Pressure on Economic Development in Northwest Arkansas


CHICAGO (September 7, 2011)—Although housing and transportation costs are currently affordable to most residents of Northwest Arkansas, high transportation costs and a growing demand for housing in walkable, centrally located neighborhoods are putting pressure on the region’s economic development efforts. That’s according to a new report by the Center for Neighborhood Technology, whose analysis of four Arkansas cities—Bentonville, Fayetteville, Rogers, and Springdale—is based on US Census data and 23 interviews with regional stakeholders.

Driving Up the Cost of Living: How Housing and Transportation Costs Pressure Economic Development in Northwest Arkansas,” found that the region’s transportation costs take a more significant bite out of household budgets than housing costs. For every dollar of earned income, a typical Northwest Arkansas household spent 26 cents on housing and 29 cents on transportation in 2000. Both costs have risen over the past decades as gas prices have increased and housing has appreciated.

“Northwest Arkansas has a lot going for it, especially given the comparatively low cost of housing and its strong, diverse economic base,“ said Fayetteville Mayor Lioneld Jordan. “But our region can’t just tread water, especially when our transportation costs are relatively high as the distance between where we live and work continues to grow. We need to make investments that keep housing and transportation costs affordable for everyone and will attract young professionals to Northwest Arkansas.”

The analysis also found that high transportation costs erase Northwest Arkansas’s regional advantage in housing affordability. The report shows that the combined costs of housing and transportation in the region are higher than in peer regions such as Huntsville, Alabama; Lexington, Kentucky; and Madison, Wisconsin.

The CNT report shows that the region’s relatively affordable housing is becoming more expensive for middle class residents. US Census data show that the median property value for a home in Northwest Arkansas rose 59 percent between 2000 and 2007, while median household income grew less than 4 percent during that time.

To maximize regional economic development and ensure long-term prosperity for all households, the CNT report recommends three policy goals:

1. Rethink regional mobility. In Northwest Arkansas, four employers—Wal-Mart, Tyson Foods, J.B. Hunt Transport Services, and the University of Arkansas—account for roughly one in four jobs in the region. The Ozark Regional Transit should partner with these major employers to give employees the option to commute without getting behind the wheel.

2. Align downtown investments into a regional vision. The region should provide incentives for major investments in the downtowns of Bentonville, Fayetteville, Rogers, and Springdale that will expand opportunities to live in compact, walkable communities.

3. Increase demand for walkability. While many households understand housing costs, they are unaware of the total cost of transportation. Outreach to residents, developers, and lenders about the combined costs of housing and transportation will increase demand over the long term for housing that minimizes combined housing and transportation costs.

“Northwest Arkansas could use more location efficient places—places that offer multiple transportation options and access to amenities and have lower transportation costs than inefficient places,” said Steve Perkins, CNT’s senior vice president. “People who live in low-cost, location-efficient communities are less financially vulnerable to costs they can’t control, like spikes in gas prices. What’s good for family budgets tends to be good for a regional economy, too.”

The CNT report was created as part of The Home Depot Foundation’s Sustainable Cities Institute (SCI), which is working with cities across the country to assist in the planning and implementation of local sustainable strategies. SCI provides vetted and detailed information for small and medium-sized cities on a very broad range of topics:  land use, transportation, buildings, materials management, water, green infrastructure,economic development and community engagement.  It is an extremely valuable tool for citizen activists, planners, and others.



Founded in 1978, CNT is a Chicago-based think-and-do tank that works nationally to advance urban sustainability by researching, inventing and testing strategies that use resources more efficiently and equitably. Its programs focus on climate, energy, natural resources, transportation, and community development. Visit www.cnt.org for more information.