Lower Housing Costs Offset by Commute Costs

Lower Housing Costs Offset by Commute Costs

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Moving to an area with lower housing costs to save money doesn’t necessarily work for low-income households, according to a study by the Center for Housing Policy, a nonprofit research group.

The study looks at families with low to moderate incomes in 28 metropolitan areas. It found that transportation costs in places with cheaper housing are often so high that they wipe out savings from lower rent or mortgage payments.

For instance, the median house price in San Diego, at $613,000, is four times that of Dallas. But the study found that working families in San Diego spend 59 percent of their income in housing and transportation, only slightly more than the 57 percent they spend in Dallas. Families in Dallas spend just 26 percent of their income on housing, compared with 31 percent in San Diego, but Dallas families spend more on transportation.

The study found that housing and transportation costs combined eat up an average of 57 percent of annual income for "working" families, which the study defines as those with incomes of $20,000 to $50,000 a year. The combined costs ranged from 54 percent of income in Pittsburgh to 63 percent in San Francisco.

Source: Wall Street Journal, James R. Hagerty (10/11/2006)

This is more evidence of the effects of transportation costs on the family's budget and offers further support for the dense, walkable, mixed-use new traditional neighborhood.

Herb