The rent can be a little damn high, so long as the ride isn't.
By Eric Jaffe, August 25, 2014
Housing costs are often the first to come to mind when we think about
whether or not a city is affordable. If the rent is too damn high, the
city is too damn expensive. That's largely true, but transportation
costs also have a lot to do with it. HUD actually combines the two
numbers into a single "location affordability" index: if those two
expenses make up more than 45 percent of your income, the city isn't
affordable to you.
The importance of transportation costs in this equation—and, more
specifically, the role of transit in reducing these costs—comes into
clear focus in a series of new reports on city affordability from the Citizens Budget Commission. Take a look at this CBC chart on average annual rent paid by residents of 22 large U.S. metro areas (New York is highlighted because it was the CBC's primary focus):
these housing figures alone, you'd expect the cities at the top to be
the least affordable, and those at the bottom to be the most. But now
here's the chart of the same 22 cities ranked by location affordability:
we see that many of the cities with high housing costs also have the
best location affordability—particularly Washington, D.C., San
Francisco, New York, Seattle, Boston, and San Jose. Each of these cities
is in the top ten for affordability despite also being in the top ten
for highest rent. In the case of San Jose, high Silicon Valley incomes
offset high local expenses. But the key for the five other cities is
being among the least expensive in terms of transportation costs:
five metros—Washington, San Francisco, New York, Seattle, and
Boston—share an obvious trait: good public transportation systems.
Strong transit makes it possible to reduce car ownership and all the
expenses that go along with it, from purchase cost to maintenance to gas
to insurance. And so we find that these same cities also rank near the
top in terms of both commuter transit share and households without
Things get more interesting when we separate location affordability by household types.
For a moderate-income household (making 80 percent of the regional
median), the five most affordable cities in terms of combined
transportation and housing costs are Washington (34 percent of income),
San Francisco (37), New York (37), Philadelphia (37), and Los Angeles
(38). All five are in the top ten in terms of transportation costs, and
three are in the top five:
let's take a look at location affordability for low-income families
(defined as making half of the HUD area median). Now the top five
includes San Francisco (42 percent), Washington (43), Philadelphia (46),
Seattle (47), and New York (47). The pattern is clear; major cities
with low transportation costs can remain relatively more affordable than
others, even if they have higher housing costs:
the list, we see a reverse effect. The five worst cities in terms of
location affordability for low-income families are San Antonio (71
percent), Riverside (71), Jacksonville (64), San Diego (62), and Phoenix
(61)—all car-reliant places that rank poorly on annual transportation
costs, transit share, and zero-vehicle households. In the case of San
Antonio, the high cost of transportation is enough to make the metro
area unaffordable to low-income families even though it's the cheapest
in terms of annual rent.
of this is to say that cities don't have lots of work to do when it
comes to affordable housing. For low-income families, only two of the 22
cities fall below the HUD location affordability threshold of 45
percent—San Francisco and Washington—and those are right near the line.
But if affordability is the ultimate goal, then reducing transportation
costs is a key part of the conversation. Strong transit may not be
sufficient to make a city affordable, but it's definitely necessary.