Smart Growth + Transit = Savings

Two closely related efforts this month are drawing attention to the fact that cheap housing in far-off exurbia isn't as cheap as it seems - and that compact neighborhoods with good access to transit aren't as expensive as they look.

The three most important words in real estate are said to be “location, location, location.” And in many cities, that’s certainly true: nice houses in safe neighborhoods with good schools close to a center city or good public transportation are highly prized by the marketplace – with high prices to prove it.

So, for many would-be homebuyers in the 1990s and 2000s, the solution was to “drive til you qualify” – that is, to keep looking for homes farther and farther out in exurbia until the price dropped far enough to be able to afford a mortgage. Often ignored by homebuyers and real estate agents alike was the fact that all that driving imposed its own big costs on families, especially once gas prices skyrocketed in the mid-2000s.

Two closely related efforts this month are drawing attention to the fact that cheap housing in far-off exurbia isn’t as cheap as it seems – and that compact neighborhoods with good access to transit aren’t as expensive as they look.

U.S. PIRG has been spending March marking Transportation Freedom Day in cities across the country. (An example from California can be foundĀ here.) Transportation Freedom Day is the day on which an average household finishes paying its transportation expenses for the year. Not surprisingly, Transportation Freedom Day varies a lot by metropolitan area, and even more by neighborhood. In the Lower East Side of Manhattan, for example, residents are done paying for transportation by February 1 of each year, while in the far suburbs of Phoenix, transportation freedom isn’t achieved until mid-April.

Of course, housing is far more expensive in Manhattan than in Arizona. But theĀ Center for Neighborhood Technologyrecently released new data that enables one to compare the total cost of transportation plus housing for communities in hundreds of metropolitan areas across the country. Users can drill down all the way to the neighborhood level – for example, in my neighborhood in Boston, which is accessible to transit, transportation and housing costs account for 36 percent of average income, which looks pretty good compared to many of the more distant suburbs.

The point of these efforts is to suggest that if neighborhoods with good access to transit are not only more desirable (as indicated by housing costs) and are affordable (as indicated by the combined cost of housing and transportation), public policy should be aimed at creating more of them! The best ways to do that are by avoiding cuts in public transportation service, expanding access to transit, encouraging transit-oriented development, and enabling the creation of compact, mixed-use neighborhoods where driving is an option, not a requirement.

Authors

Tony Dutzik

Associate Director and Senior Policy Analyst, Frontier Group

Tony Dutzik is associate director and senior policy analyst with Frontier Group. His research and ideas on climate, energy and transportation policy have helped shape public policy debates across the U.S., and have earned coverage in media outlets from the New York Times to National Public Radio. A former journalist, Tony lives and works in Boston.