Ed Risse uses a term “RHTC” as short-hand for a broad swath of Americans he describes as “Running as Hard as they Can” — the vast middle class between the underclass and the winners in the “winner take all” globally competitive economy. Ed contends that dysfunctional human settlement patterns explain why they are running so hard. His analysis gains support from a new report by the Center for Housing Policy, “A Heavy Load: The Combined Housing and Transportation Burdens of Working Families.”
In the nation’s 28 largest metropolitan areas, working family households earning between $20,000 and $50,000 a year are spending 58 percent of their income (60 percent in the Washington metro area) just on housing and transportation. The housing bubble has garnered ample attention for the housing part of the equation. Less widely recognized is that working families spend just as much of their income on transportation. (See the data comparing metro areas.)
And the problem is intensifying. While incomes rose 10.3 percent between 2000 and 2005, transportation costs rose 13.4 percent and housing costs 15.4 percent.
Of particular interest to the ongoing discussions on this blog is the fact that housing and transportation costs are intimately entwined. The high cost of housing in the metropolitan core, where most of the jobs are, forces working class families to live farther out — in effect trading their time and transportation costs in exchange for lower mortgage payments. What many families fail to understand is that when they add up the diffuse costs of transportation — auto ownership, maintenance, taxes, insurance, gasoline, etc. — they are not only sacrificing their time but losing money.
(One of the goals of Ed’s Property Dynamics project is to educate consumers about these and other costs related to human settlement patterns: dispelling prevalent myths and enabling people to make more rational economic decisions about where to live.)
The authors also identify community impacts:
As more and more working families commute to distant job centers from their homes, clogged and congested roads become the norm in surrounding communities. A growing number of communities are identifying the lack of
affordable housing and the increase in commute times and traffic congestion as priority issues. But they haven’t always linked these two sets of issues…
Clearly, there is a huge supply-demand imbalance of housing in Northern Virginia and, to a lesser extent, Virginia’s other metro areas. Developers are building high-end housing, but little that working families can afford. Does that mean developers are “greedy” and “heartless”? No, it suggests that there is an acute shortage of developable land in the metropolitan core — much of it attributable to local government restrictions on development and re-development. Given the scarcity of vacant land and the difficulty of re-developing underutilized land at higher densities, developers will serve the most profitable segment of the market — the high end — first.
The study recommends:
- Infill development “that expands the supply of affordable housing in inner city and older suburban neighborhoods that have good access to traditional job centers.”
- Development of affordable housing “near transportation hubs and suburban employment centers.
- Reliable transit for suburb-to-suburb commuting, and for transporting workers from the outer suburbs to the metropolitan core.
- Car sharing, to reduce the cost of car ownership for those lacking access to transit.
