Middle Income Families Spending More for Transport & Housing

The Center for Housing Policy (CHP) and the Center for Neighborhood Technology (CNT) have jointly released a report coupling housing and transportation costs across 25 metropolitan regions in the United States. Losing Ground | The Struggle of  Moderate-Income Households to Afford the Rising Costs of Housing and Transportation displays a comparison of transport and housing costs,  including not only raw inputs like fuel or rent, but also the associated expenditures of the whole value chain behind each. By including insurance, repair and energy costs and calculating those as a percentage of income, the report has found unlikely – or at least, head turning- metrics. For instance, though Miami is in absolut terms cheaper to live in than New York City- Miamians pay $2,074 per month in transport and housing costs, New Yorkers pay $2,215 per month in those costs- as a percentage of income, Miamians are actually paying more. Miamian middle income households only make $2,882 per month, compared to New Yorkers’ $3,930, or 72-percent of income v. 56-percent of income for transport-housing costs respectively. New York, America’s densest city, is a bargain in comparison.

The Absolute and Relative Costs of Place

The economies of scale enjoyed by higher income families bear advantages; proximity to the work place and/or negligible transportation costs when measured as a percentage of income. Middle income families, the focus of the joint CHP and CNT report, pay a proportionately higher cost of accessing work, entertainment and recreation. The disparity here can be measured in the costs of distance from the work place as a ratio to affordable housing. For instance, Cincinnatians  and Chicagoans from middle income families, illustrate this well.  Both Cincinattians  and Chicagoans spend the same percentage of their income on transport and housing costs combined: 56-percent. The disparity here exists in what the ratio of transport to housing costs are. Chicagoans pay 6-percent more of their incomes for housing, and 6-percent less for transport. The benefits and expenses of a bigger home -ostensibly what these Cincinnati families may be able to afford- account for disparities in urban housing costs by including home insurance and upkeep costs. What does this say about these big Midwestern cities? Though some in Cincinnati may get a front porch and an extra bedroom,  Chicagoans have the benefits of living closer to work and in a more walkable, accessible city – in addition, they make more money in absolute terms. The higher cost of transport for Cincinnatities are indeed reflective of more time spent in vehicles – public transport buses or cars alike. All things being equal, the livability provided by Chicago may well be worth the trade off for higher housing costs.

More To Be Achieved

Though urban living for Chicago may be more rosy than for those in Cinci, both cities have seen costs outpace income growth and the overall price of housing and transport is too high overall. Every metro measured in this study has seen housing & transportation costs increase above rises in income, ranging from Seattle’s 5-percent gap in income to these costs, to Detroit’s yawning 30-percent gap. Urbanities, especially young urbanites, have some hope overall. Renters are paying less overall for combined  transport and housing costs compared to those who are currently on a mortgage; and pay less overall for housing when foiled against current mortgage payers and fully paid mortgage owners combined.