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Driving up the cost of housing

Submitted by News Desk on Thu, 04/29/2010 - 10:55am

GREEN CITY If you think living in the Bay Area is expensive, think about what it would be like if you didn't have access to public transportation. A new report by Chicago-based think tank Center for Neighborhood Technology (CNT) considers just that problem, offering a new way of understanding just what constitutes affordable housing.

The CNT report — dubbed the Housing and Transportation (H+T) Affordability Index ( [2]) — maps housing affordability for 337 metropolitan areas and provides before-and-after snapshots that show how affordability changes when transportation costs are taken into account.

Affordable housing is usually defined as consuming 30 percent or less of a household's income, but CNT proposes a redefinition. Under CNT's new definition, housing is only considered affordable if the sum of housing and transportation costs constitutes 45 percent or less of household income. That redefinition would have dramatic effects on the Bay Area's affordability picture.

Many communities in the region that would have been considered affordable under the old definition — including large swaths of Hayward, Marin County, Sacramento, and Stockton — would be unaffordable under the new standard. And San Francisco, well served by public transit, would be deemed a lot more affordable.

The difference that smart planning and public transportation make can be huge, especially for households already feeling the pinch of a weak economy. According to CNT, transportation costs in "location efficient" neighborhoods — its term for "compact, mixed-use communities with a balance of housing, jobs, and stores, and easy access to transit" — can be as low as 12 percent of a household's budget versus up to 32 percent for less efficient neighborhoods where residents must drive to jobs and services.

For example, CNT calculated an annual transportation cost difference of $2,780 between Oakland's Rockridge neighborhood, which it calls "compact," and the city of Antioch, which it considers "dispersed."

CNT says "location efficiency" in development can translate to big savings. According to its report, if 50 percent of new growth in the Bay Area occurs in compact rather than dispersed neighborhoods, the region could collectively save more than $1.1 billion in transportation costs.

Besides reducing a community's environmental impact and improving residents' quality of life, the report argues that things like walkability, proximity to jobs and services, and efficient public transportation help make an area more livable and affordable. The report also raises questions about the wisdom of cutting public transportation, especially in a period when many households are being forced out of their homes.

CNT hopes that its analysis will lead to more awareness for policy makers and more transparency for consumers. "What we're looking for is a new definition of affordability, transportation cost disclosures for consumers, and incentives to build more compact communities around transit," CNT spokesperson Nicole Gotthelf told us.

Gotthelf said the Bay Area has been at the forefront of this issue, specifically mentioning the work of the Bay Area Metropolitan Transportation Commission (MTC), the agency that plans, coordinates, and finances transportation in the nine counties that make up the region. "They've been actively trying to understand the housing and transportation trade-offs for Bay Area households."

In turn, MTC offered support for the principles behind the CNT study. "We agree that it is good policy to promote the development of affordable housing at or near transit hubs," MTC spokesperson John Goodwin told the Guardian.

In its "Transportation 2035 Plan for the San Francisco Bay Area," which outlines how the agency will spend $218 billion in transportation funds over the next 25 years, MTC even sets out a goal of "decreas[ing] by 10 percent the combined share of low-income and lower-middle-income residents' household income consumed by transportation and housing."

Goodwin told us the agency is committed to smart growth principles: "The Bay Area is not unique, but I think the Bay Area is part of a vanguard ... We are among the leading metro areas in making this a policy priority, and I feel confident in saying that this priority will continue to be affirmed."

Goodwin pointed to the agency's Transportation for Livable Communities (TLC) program, which is designed to promote development that "revitalizes central cities and older suburbs, supports and enhances public transit, promotes walking and bicycling, and preserves open spaces and agricultural lands." Now in its 12th year, the TLC program has helped fund scores of transportation-related and affordable housing projects.

The MTC also administers the Housing Incentive Program, which "rewards communities ... when they successfully promote high-density housing and mixed-use developments at transit stops to support transit use." The program provides up to $3 million in grants to local governments that partner with developers to build housing near transit hubs.

Conversely, the agency also won't approve funding for new transit stops that aren't in dense areas. The thresholds require a minimum number of housing units within a half-mile radius of new transit stops, from 750 units for new ferry terminals to 3,850 units for new BART stations.

But the MTC's efforts represent only one part of the equation. Goodwin said that coordination is key. "What we have here in the Bay Area is that decisions about transportation funding — for the most part — are conducted at the regional level, while land-use decisions are made at the local level. So it requires coordination between regional agencies like MTC and local cities and counties."

In spite of the MTC's efforts, huge problems plague the region. Housing costs in the Bay Area are among the highest in the nation. A recent report conducted by the Urban Land Institute — based on research conducted by CNT — found that, on average, Bay Area households spent $41,420 a year on housing and transportation, a whopping 59 percent of median income.

With budget crises affecting many of the region's public transit providers, service cuts and fare hikes make the picture bleaker. Recently, AC Transit and Muni services were cut by almost 10 percent, causing longer waits and crowded buses — and a huge budget deficit could mean deep cuts in Caltrain service this summer. If these cuts force more Bay Area households to turn to cars, the region's affordability can be adversely affected, even as households deal with the pressures of a weak economy.

On the national stage, several developments offer signs that smart growth principles — including the link between housing affordability and transportation — may be gaining wider traction. These developments are presenting smart growth and public transportation advocates with opportunities to push for reform.

Last year, three federal agencies — the Department of Housing and Urban Development, the Department of Transportation, and the Environmental Protection Agency — announced a partnership that would have the agencies working together on housing and transportation initiatives. The partnership laid out six "livability principles," including commitments to provide more transportation choices, "promote equitable, affordable housing," support existing communities, and "value communities and neighborhoods." The new partnership's rhetoric includes references to location and energy efficiency, transit-oriented and mixed-use development, and walkable neighborhoods.

On Capitol Hill, Congress is working on a new omnibus transportation bill to replace a bill that expired in 2009. The bill would provide billions in federal funding for highways and other forms of surface transportation. Consideration of the new bill in both the House and Senate has stalled, but some proposals emphasize the creation of transportation choices and livable communities. Transportation for America ( [3]), a coalition of housing, transportation, environmental, and other groups, is mobilizing to promote public transportation and sustainable development in the new transportation bill, seeking to make CNT's way of looking at the world into official U.S. policy.