The press and progressive blogosphere seems to love the Center for Neighborhood Technology’s new Housing + Transportation Affordability Index. But after playing around with their nifty maps, I ultimately found myself more bewildered than enlightened.
Of course, the basic idea of combining housing and transportation costs is sound. Typical measures of affordability take a narrow view of housing costs, looking only at mortgage payments and rents—which can make homes in low-priced exurbs look more “affordable” than homes close to town and city centers. But people who live in sprawling neighborhoods often find that every trip requires a car—which means higher costs for purchasing, insuring, maintaining, and fueling their vehicles. Once you factor in high transportation costs, many “affordable” suburbs suddenly look a lot pricier.
The map below shows how this plays out in Portland: 
The yellow areas are considered “affordable,” and the blue “unaffordable.” The left map considers housing costs alone, and the right-hand map considers housing + transportation. The end result: some far-flung neighborhoods that seem affordable (yellow) based on housing costs alone (left map) look unaffordable (blue) when you look more broadly at the combined cost of housing plus transportation (right map). The map of Seattle shows a similar pattern.
Still, as I dive into the underlying numbers a bit, I’ve come to believe that there’s both more and less to the CNT analysis than meets the eye.
The Housing + Transportation Affordability Index deems any census tract where people spend more than 45 percent of their incomes on housing + transportation as “unaffordable.” But as we’ve said before, it simply doesn’t make sense to think of housing affordability as a fixed ratio between housing costs and incomes.
People with high annual salaries, for example, can easily afford to spend much more than 45 percent of their incomes on housing and transportation. Once they’re done paying for cars and their mortgage, they’ve still got plenty left over for food, clothing, utility bills, and other basic necessities, as well as savings and some luxuries. So to a large extent, people who live in an “unaffordable” neighborhood are actually doing just fine!
But families with lower incomes just can’t afford to spend anywhere near 45 percent of their take-home pay on housing and transportation. If they did, they’d wind up without enough money to pay for healthy food, clothing and all the other goods and services that our society considers part of a decent standard of living. So many people who live in a so-called “affordable” neighborhood are actually struggling to pay the rent.
The numbers bear this out: people with lower incomes spend a smaller share of their incomes on housing + transportation. Below is a side-by-side map of Seattle that illustrates the point. On the left is median household income by neighborhood: the darker the color, the higher the median income. On the right is Housing + Transportation as a share of income, where residents of the darker areas spend a higher share of their income on housing.
The different color schemes obscure the story a bit, but the upshot here is that the maps are strikingly similar: low median income correlates with high “affordability.” So, as much as anything else, the Housing + Transportation Affordability maps are mostly a reflection of income distribution. People who are poorer tend to live in places that are more “affordable.”
The irony here is that the people who are living in “affordable” neighborhoods are precisely the ones who are having the hardest time making ends meet! Their housing and transportation costs aren’t necessarily “affordable” at all!! Yes, costs in those neighborhoods are comparatively low, but the people who live there may not have enough money to pay for child care, healthy food, medical care, or other basic needs.
I take two things away from all of this. On the one hand, the Housing + Transportation Affordability Index represents one big advance: it recognizes the importance of transportation costs in any measure of housing “affordability.”
But on the other hand, it leaves the affordability debate stuck in the same trap its been in for decades: it defines “affordability” as a fixed ratio between housing costs and income. But the idea of a one-size-fits-all ratio is just silly. A housing-to-income ratio that’s “affordable” for a couple without kids may be completely unaffordable for a single mom. A housing-to-income ratio that’s “affordable” to the well-off may be unaffordable for people just scraping by.
Thinking about affordability as something other than a ratio between housing and income turns the whole housing affordability debate on its ear. The drive to make housing more “affordable” is only a part of a much larger agenda: making sure that everyone can afford a decent standard of living. To get there, you have to do much more than focus on housing and zoning codes, and look more broadly at the deep and widening gaps between the financially well-off and those who are struggling—low transportation costs or no—to provide a decent quality of life for their families.
Matt the Engineer
But you’ve left an open question as to what these maps should be measuring. I agree that income is such an important variable that (housing cost)/(income) doesn’t provide enough data. But what would be more useful for displaying affordable housing? Maybe simply a (housing cost) + (commuting cost) map to show real housing costs, leaving interpretations of affordability alone might be useful. A map of(income – food – housing – transportation – utilities – child care)/(income) would get at the affordability, but again it tells you more about the people living in a neighborhood than the potential affordability of that neighborhood.
Anna M
Thanks Clark!You make a great point about the middle-class bias that enters into “affordability” conversations. There are so many factors that contribute to a family’s ability to provide for their wellbeing. We must always consider access to jobs, healthcare, public safety, education, freedom from environmental pollutants, etc. For example, what good does it do for a family to live in an “affordable” urban area if they can’t get a job, they are afraid to walk down the street, their child’s school is failing, they have diabetes and there are toxins in their soil?My fear is that maps like these from CNT will serve to re-direct resources (transportation dollars, private investment) back into urban areas and will only benefit the affluent families moving in from the eastern suburbs and force low-income residents into low-resource southern suburbs.We must implement bold policies that ensure equitable access to life sustaining resources for all. If it’s better for society, the environment and families if people can afford to live close to where they work, then we have to make sure all families can actually afford these “affordable” neighborhoods.
Chris
Great points all- but I think CNT has provided a good thought-provoking tool here, and Matt is right that it’s hard to think of a better proxy for affordability. I couldn’t stop playing with the map as it relates to 80% as well as 100% of median income, and wondering what happens in areas with a mix of incomes in the same census tract (Hope VI projects, etc.) Also great tools compare transit availability, ridership etc. Promising for TOD in those south suburbs Anna mentions.
Chuck
As a policy advocate on low-income energy issues, I applaud CNT for bringing this issue to the fore. I can’t tell you how frequently households make the mistake of trading a lower rental cost for a higher gasoline bill and greater isolation from vital services. Clark’s additional comments really stir the discussion further in a very positive way. While I agree, the limited parameters may over-simplify the analysis, it is nevertheless revealing. Clark’s added dimensions don’t negate the CNT observation, but expand and clarify the discussion. In the poverty arena, we have been dealing with this issue for years, because whether one is “poor” according to federal standards has been gauged by an antiquated standard based on a minimally nutritional food budget more than 40 years old. While there is now talk of re-examining this measure, we’ll have to see what sort of movement there is. Meanwhile anyone interested might want to look at the work done by by Diana Pearce from the University of Washington and others with Wider Opportunities for Women on the Self Sufficiency Standard and what constititues a viable income.
Clark Williams-Derry
Agreed—CNT has made an important contribution. Just changing the debate about housing costs, to include housing + transportation, is a big step forward. Next up—housing plus transportation plus utilites. That’d do some more to highlight the benefits of smaller homes and multifamily housing.Yet at the same time, whenever I think about the very idea of “housing affordability” I get woozy in the head. It feels like there isn’t one generic affordability problem—it’s a bunch of different issues lumped together, or perhaps a continuum of issues: middle-income folks disappointed about how much house &/or neighborhood they can get for their money; lower-income folks who have to skimp on essentials (or accumulate debt) after paying for housing + transportation; and very low income folks who simply can’t afford decent, safe housing at all.Somehow, the problems along this entire continuum get blamed on “unaffordable housing” when it’s not just a housing issue, but a matter of income distribution and skewed earnings in a highly unequal society.