During the housing boom, new subdivisions lured buyers to outer jurisdictions with the promise of lower mortgage payments and more square footage. No one thought much about the financial impact that longer commutes would impose on consumers’ wallets, because the affordability tradeoff was so large in terms of housing.
Now, as families grapple with tighter lending standards, decimated 401(k)s, volatile gas prices, and lost jobs, many are feeling the strain of those added transportation costs. A new report released this week by the Urban Land Institute’s Terwilliger Center for Workforce Housing spells out just how heavy that weight is proving to be for families living in and around the nation's capital.
On average, households in the greater Washington, D.C., region spend $23,000 on housing and $13,000 on transportation (a combined $36,000 annually). That’s about 46% of the area median income of $78,000, according to the report, “Beltway Burden,” which ULI released this week in partnership with the Center for Housing Policy and the Center for Neighborhood Technology.
That Washingtonians (like residents of many other major metro areas) are spending nearly half their income on housing and transportation is problem enough. But the report also suggests there is a rule of proportion at play, and not all neighborhoods break out in the same way in terms of cost.
“What we’ve found is that people who spend more on housing often end up spending less on transportation, and vice versa,” Jeffrey Lubell, executive director of the Center for Housing Policy, said during a press briefing yesterday. There is a tipping point, he added, at which point cost savings on mortgage payments are eroded by higher transportation costs.
For D.C. area residents, that tipping point occurs when the distance between home and work exceeds 15 miles to 17 miles, according to the report, which examined the combined cost of housing and transportation in 22 areas in and around the nation’s capital. For example, housing costs in Clarke County, Va., and the closer-in suburb of Falls Church, Va., are roughly equal (averaging 31% of median income). But transportation costs for Clark County residents eat up an additional 27% of the average household budget, whereas Falls Church residents’ transportation costs are much lower, at around 14%.
Lubell stressed that an appropriate metric for affordable housing advocates, moving forward, will be a “cost of place” number that aggregates the housing, transportation, and utility costs associated with any given point on the map. “Housing, land use, and transportation planning will need to be much more coordinated,” he said.
Sprawl has also come with other associated costs, noted Pamela Patenaude, executive director of the Center for Housing Policy. Notably, the “time tax” which eats into the available hours that distance commuters have to spend exercising, preparing healthy meals, volunteering in their communities, or spending time with their families. Drivers spend an average of 60 hours per year sitting in traffic and waste nearly 91 million gallons of fuel, according to the report.
As a complement to its study findings, ULI and its research partners have introduced a Web-based cost calculator that allows D.C. area consumers as well as developers, planners, and builders to plug in specific home and work addresses for purposes of comparing associated housing and transportation costs, as well as commuting times. The tool, which creators expect will be applied to other metro areas going forward, has potential applications for consumer education, as well as public policy decisions related to land use, housing affordability, and carbon reduction goals, noted Peter Haas, manager of the Center for Neighborhood Technology.
There are problems the cost calculator will bring to light, but not solve; namely that there is not enough affordable workforce housing to go around, at least not in areas close to jobs and transit. This is particularly true in the metro D.C. area, which is projected to grow by 1.7 million new households during the next 20 years.
To this end, ULI leaders plan to use the report as a policy tool to advocate creative solutions in areas such as inclusionary zoning, tax increment financing, preservation of existing rental stock, and infill tax incentives for developers.
“The shortage of housing that is close to jobs is a pressing urban need that cannot be shelved for later,” said Richard Rosen, president of ULI Worldwide. “Throughout urban America, commutes are getting longer, and traffic is getting worse. Improving the quality of life in our cities by linking more housing to jobs is critical to both economic and environmental stability. Where we build is just as important as how much we build. The challenge is to build workforce housing where it’s needed.”
Jenny Sullivan is senior editor, design, at BUILDER magazine.
Learn more about markets featured in this article: Washington, DC.