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Report: Commuting Costs offset Lower House Prices

By Anonymous

Something a little different ...

From the Boston Globe: Travel swells cost of housing

People who move to an outlying Boston suburb to find affordable housing or to get more house for their money often sacrifice the savings to higher transportation costs, according to a study to be released today by a national planning and land-use organization.

The report, by the Urban Land Institute, is the first to quantify by community not only commuting costs, but the price of daily transportation around often-sprawling suburbs.

Here is the report on Boston:

This report analyzes the combined costs of housing and transportation for neighborhoods, cities, and towns throughout a Boston regional study area that extends south to Providence, Rhode Island; west to Worcester, Massachusetts; and northeast to Dover, New Hampshire.

Our analysis finds that the typical household in the study area spends upwards of $22,000 annually on housing, which represents roughly 35 percent of the median household income ($68,036). With transportation costs for the typical household reaching nearly $12,000 annually, the combined costs of housing and transportation account for roughly 54 percent of the typical household?s income.

Similar studies conducted for the San Francisco Bay Area and the Washington, D.C., region have found average housing and transportation cost burdens of 59 percent and 47 percent, respectively.

When gasoline prices rose to over $4 per gallon in 2008, it really crushed some exurban areas that were already hard hit by the housing bust. The old saying "Drive to you qualify" doesn't really make sense if the transportation costs offset the lower house prices.

Full post as published by Calculated Risk on April 13, 2010 (boomark / email).