Another affordability factor

Charlottesville is having an important discussion over some new census stats on the affordability of housing. Almost half of the renters in the city are paying over 35% of their income toward housing, which is considered by affordable housing advocates to be an undue burden. Some have pointed out that the student presence here may be skewing the numbers, but these are thought-provoking numbers nonetheless.

There's a major element to this that hasn't come up: housing and transportation costs are inextricably linked. To measure housing without taking transportation into account is like asking for the price of one shoe without checking the price of the other. Rather than setting an affordability threshold at 30% of household income for housing, a better rule of thumb is to set , say, 50% for housing and transportation combined.

Failure to include automobile costs makes cities seem to have a higher cost of living, leading to the myth of "drive till you qualify" as you travel out through rings of suburbs. The reality is quite different. New York City, for example has notoriously high housing prices. 37.8% of the average household income went toward shelter. However, NYC actually has a lower overall wage-adjusted cost of living than the rest of the country, because transportation costs only consume 15.4% of the budget - more than making up for the higher housing costs.

It's fascinating to me how much the average U.S. household expenditures have shifted during the late 20th century. According to Bureau of Labor Statistics, food was the biggest expense for a family in 1950. Since then, both housing and transportation have shot well above the food budget.

In 2008, AAA estimates the average annual car ownership costs at $5,576. Operating costs are an additional $7K (assuming 10,000 miles driven a year). Because of contemporary land use patterns, most families are required to own one vehicle for each driving-age person. However, living arrangements that allow a family to own one fewer car can translate to significant cost savings.

All of these numbers are needed to consider the economic health of a community.

A novice's thoughts on affordable housing

The issue of providing affordable housing is attracting attention in Missoula, where the median income has been growing much more slowly than housing costs. Beyond the obvious concerns about leaving lower-income families behind, this trend could also stunt the region's economic growth. Employers will have to pay more to attract qualified workers to defray their costs of living, and some workers and business will just say "no thanks." Since I'm a newcomer to this longstanding and contentious local issue, I have to work through some of the basic premises first.

What qualifies as "affordable housing?" It seems to me that there are two sides to this definition. The "affordable" side is straightforward: the housing must account for no more than 1/3 of a household's total expenditures. But what counts as livable "housing" is more difficult to pin down. Does it have to be a single-family home on a separate lot? Do rentals count? What is an acceptable state of disrepair? How close to the center of town must it be? It has occurred to me that a major cause of the differences in opinion over this issue could be chalked up to where the definitional standard is set.

And this is why I hesitate to jump head first into being proactive about the problem. Normally, when things start getting too expensive, the sensible reaction is to build smaller and build closer together. It looks like this is happening already in Missoula. Condos, which average at $160,000 a piece, are supplementing the single-family houses, which go for $220,000. Condo prices still seem high, but they are certainly attainable for those making the median income. And the prices may go down as the nascent market becomes more established and housing prices nationwide adjust themselves downward after the bubble burst. Another striking feature of the condo market is that developers seem to be voluntarily mixing a wide range of prices together, something that is a rarity (or even restricted) in so many housing neighborhoods. The new Dearborn condos range from $133,000 to $306,000. Density and diversity are pretty important features of livable communities.

Maybe the real problem is not so much the lack of housing in Missoula but the suburban American dream itself, what we think of as a house when we close our eyes. Domestic ideals that were forged in a time when urban living meant cholera, lack of sanitation, overcrowding, and industrial pollution have branded themselves into the national consciousness when the reality of an urban lifestyle has changed dramatically. As for that hypothetical teacher who may opt to take a job in Des Moines if he can't afford a suburban house in Missoula, he needs to be balanced with consideration for the other hypothetical teacher who passes on the bigger house in Des Moines to live in a compact and vibrant Missoula that has preserved its exceptional natural beauty from sprawl.