National Index Reveals Combined Housing and Transportation Affordability Has Declined Since 2000
CNT’s H+T Index Reveals the High Cost of Transportation in Nearly 900 Regions Across the Country
CHICAGO (Feb. 28, 2012)—A new analysis by the Center for Neighborhood Technology (CNT) reveals that less than one in three American communities (28 percent) are affordable for typical regional households when transportation costs—the second largest expense in a family budget—are considered along with housing costs. The analysis also shows that it is much more difficult for the typical household to find a truly affordable place to live today than it was a decade ago, with incomes having increased roughly half as much as transportation and housing costs since 2000.
“The H+T Index makes the transportation costs of a place transparent to people and policy makers so they can make smart decisions about where they live and how they invest public dollars,” said Scott Bernstein, CNT founder and president. “At a time when gas prices rise weekly, income is flat, and public transportation funding is threatened, the H+T Index provides information that can help us control the cost of living for families and communities.”
The Housing + Transportation (H+T®) Affordability Index provides the only comprehensive view of affordability by disclosing housing and transportation costs at a neighborhood level. The Index covers nearly 900 metropolitan and micropolitan areas across the country—encompassing nearly 180,000 neighborhoods and 89 percent of the US population.
Under the traditional definition of housing affordability (a rent or mortgage payment consumes no more than 30 percent of household income), three out of four US communities (76 percent) are considered “affordable” to the regional typical household making their area’s median income. However, under an expanded definition of affordability (housing and transportation costs consume no more than 45 percent of income), the number of affordable communities decreases dramatically to 28 percent, resulting in a net loss of 86,000 neighborhoods that are within reach for a typical family.
“Everyone understands ‘location, location, location’ when talking about the cost of housing, and they get that housing costs in Manhattan, Kansas, are very different than housing costs in Manhattan, New York,” said Peter Haas, CNT’s chief research scientist. “Location affects transportation costs, too. The H+T Index quantifies transportation costs by location and encourages people to consider both housing and transportation costs when looking for a home they can truly afford.”
Today’s release updates and expands the first H+T Index website, which used 2000 US Census data. The latest Index uses American Community Survey 2009 5-year estimates, covers smaller cities and towns, and provides improved measures of travel demand and household transportation costs.
CNT used the Index to rank metropolitan areas that had the highest and lowest average monthly transportation costs for a typical family earning the national median income.
Comparing Index data from 2000 to 2009 reveals that housing and transportation costs have dramatically outpaced incomes over that period, making it more difficult for the typical household to find a truly affordable place to live. Median housing costs, as reported by the US Census, have increased by nearly 37 percent nationwide, while the national median income has increased by approximately 22 percent. Average transportation costs in the geographies covered by both Indexes increased by more than 39 percent or $318 per month.
Despite the increase in transportation costs from 2000 to 2009, the Index shows that people living in location efficient neighborhoods—characterized by access to transit, jobs, and amenities—experienced a smaller increase than those living in car-dependent places. The typical family living in a location efficient neighborhood in 2000 (where transportation costs were less than 15 percent of the national median income), saw average transportation costs increase by approximately $1,400 annually. Meanwhile, families living in inefficient neighborhoods (where 2000 transportation costs were greater than 15 percent of the national median income) had average transportation costs increase by more than twice as much, or slightly over $3,900 annually. The difference amounts to a $200 per month location efficiency bonus.
“Despite the clear benefits to people’s pocketbooks when living in location efficient neighborhoods, we spent the first decade of the 21st Century developing in location inefficient places that put undue burden on household budgets, municipal coffers, and the environment,” said Bernstein. “Nearly six million households were added in the time period and areas our Index covers, but less than 1 percent of these were added in location efficient places. We have to do better.”
Since the Index was first launched, a diverse group of cities and organizations have used the Index in planning and policy purposes, ranging from federal agencies to private planning firms, and housing counselors to streetcar advocates.
“We are using the H+T Index and CNT’s work to better understand the implications our transit expansion plans will have on our mix of land uses and housing affordability,” said Harriet Tregoning, Director of the DC Office of Planning. “It’s a thoughtful index and a useful benchmark that can help many organizations and agencies make well-informed decisions.”
Emily Robinson, Center for Neighborhood Technology, email@example.com, 773-269-4043
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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 transportation, energy, water, community development, and climate. Visit www.cnt.org for more information.