Streetsblog has a nice piece on some very thorough research by the Center for Neighborhood Technology looking at combined house/transportation affordability.
Portland’s maps here.
Streetsblog has a nice piece on some very thorough research by the Center for Neighborhood Technology looking at combined house/transportation affordability.
Portland’s maps here.
18 responses to ““Drive ’till You Qualify” Put to Rest”
Although the page has a nice writeup on the Streetsblog link and the map of the Portland area is interesting, I find it mostly a feelgood glittering generality that provides little, if any, real data.
From the CNT map page:
Traditionally, a home is considered affordable when the costs consume no more than 30% of household income.
Ha ha ha! Most people I know would love to have their housing costs at 30 percent of their income or less!
An example: let’s say that one is renting a one bedroom apartment for $550 a month. It’s probably a fairly cheap rent meaning a non-“energy-efficient” apartment, possibly in a run-down and/or “non-trendy” area. That’s $6,600 a year. They’d need at least $22,000 in take-home pay in order for their rent to be 30% of their income. Also, the 15% for transportation costs would mean $3,300 for a year, and they would spend no more than $275 a month. Good luck having car payment, car insurance, License-mandated fees, gas, oil, and maintenance costs fit in $275 a month.
Remember, the $22,000 is take-home pay. There’s plenty of ways that one could reduce their income by a bunch to have lower take-home pay. The main one is mandated withholding for Social Security, Medicare, federal and state income taxes, etc. Others include insurance premiums and retirement savings (because the money isn’t available for one’s immediate use).
Now, I know that someone out there is about to fire off a reply starting with “But Jason, ‘real people’ own their home and have a mortgage…,” so let’s look at that.
I was hard-pressed to have any real mortage payment amounts handy, so I’ll go with $1,500 a month. That’s $18,000 a year, and for housing costs to be 30% or less, that requires a take-home pay of at least $60,000 a year! For transportation costs to be 15% or less, that’s $9,000 a year, or $750 a month. Hopefully, this represents a multi-earner household with no childcare expenses and transportation needs served by something other than motor vehicles.
And, please note that I wrote all of this before realizing the “change” drop-down menu with many more maps/data than the initial ones. I might be entertained by this for a while…
I think the prior commenter may be mistaken about how the income percentage is measured. Typically mortgage qualification has a guideline as a percentage of gross income, not take home pay. In fact the mortgage interest itself will impact net pay since it is deductible. I suspect the percentages cited in the study are the same gross income percentage.
The $60k per year cited for income needed for a mortgage sounds about normal if we are talking about gross income and a two earner household.
All that said, the concept that distance to work create significant additional overhead is valid, although certainly fraught with anomalies. If one cannot reach a point where a vehicle can be eliminated from the budget then the tradeoff is very difficult to make vis a vis ‘drive to qualify’. Car payment, insurance, etc impose significant fixed costs, whether or not you actually drive the vehicle. By comparison the fuel is quite inexpensive. My household has 5 vehicles (car, classic car, pickup, 2 motorcycles, motorhome) but we only spend an average of $200 mo on fuel. Most of the time these vehicles sit.
If I lived in certain parts of Portland I would happily trade access to transit for some of these vehicles (I like to say I would keep 1 motorcycle and a Maserati, just for fun), but I work in lower density Eugene and when I moved here 4 years ago it was virtually impossible to find housing we qualified for in the few higher density areas near our work downtown, which provide ready access to food, shopping restaurants and work …unless we wanted to live in a student apartment building. But Im just too old for midnight music through the walls …and I always was. After months of shopping we chose an area 5 miles from work and usually carpool, but occasionally take the bus.
Having lived in central Oregon, Phoenix, LA, SF, Seattle, Kansas City and Portland, and worked in much of the rest of the country over the last 30 years I dont think my situation is an anomaly. What is unusual is finding a location where the density and transit are robust enough to support a car free or reduced car life without significant loss of living standard. Hence people drive to qualify, especially at the lower rungs of the mortgage ladder. Ive seen young couples repeatedly make the decision to move to an exurb just so they could ‘own a home’. They already have the car(s), so the transportation expense is virtually ignored in the calculation.
I wasn’t talking about qualifying for a mortgage. I’m talking about what it would take for a payment of $1,500 to equal the 30 percent of take-home pay that the linked articles and data are referring to.
And, yes, this takes into account that most people ignore transportation expenses when deciding on a place to live. The American Public Transportation Association updates a page every month of what monetary savings are for using transit vs. driving.
However, something I will not dispute is the maps comparing commute times via public transit vs. other modes. Most of the Portland Metro Area is in “33 minutes and greater” for transit, whereas much of the area for other modes is “less than 22 minutes.”
Most of the Portland Metro Area is in “33 minutes and greater” for transit, whereas much of the area for other modes is “less than 22 minutes.”
JK: Here is a comprehensive study of the time wasted on transit compared to driving for 74 of our largest cities, based on American Community Survey for 2005-2007. It includes a comparison of commute times in the city vs suburbs*:
http://www.portlandfacts.com/commutetime.html
Nationally transit commute times are 48 minutes and auto commute times are 25 minutes. Portland is 22 for auto compared to 42 for transit.
Even in the big dense cities (like Metro dreams of making Portland into) the transit commute times are much longer than auto.
* Suburbs is an ancient word that means beyond the wall – as in beyond the wall around the old cities. Suburbs started in Roman or earlier times.
Thanks
JK
Jk, I’m guessing ancient roman suburbs were not full of six lane thoroughfares and vast parking lots. I’m guessing they didn’t have big box retail and seperation of uses. They were likely more densely populated and walkable than any modern, western city, even paris. In short, they had absolutely nothing in common with the automobile suburbs of today aside from the name, and their status of being less urban than the cities of their day. We would love them, you would hate them. One wonders about their commute times, though. . .
Jason Barbour, where does the linked article mention take-home pay? It explicitly states “30% of household income”.
jk: * Suburbs is an ancient word that means beyond the wall – as in beyond the wall around the old cities. Suburbs started in Roman or earlier times.
Actually the word means “below the city”. The wealthiest and most important Romans lived in the hills; suburbium actually designated an impoverished area in the city. Prior to the 19th Century, it usually referred to an area outside the city, impoverished because of a lack of work.
Jason Barbour, where does the linked article mention take-home pay? It explicitly states “30% of household income”.
Hopefully I’m not causing the topic to digress too much, but fine, let’s say that I have made an opinion-based assertion that take-home pay is what actually matters. When I stop to think about it, it does, since the amount automatically taken out every paycheck for taxes, insurance, and retirement (if one is fortunate enough to have that option these days) is money that is already pre-spent and not available for one’s use.
The information on the CNT website skirts the definition of income, saying it’s been tied to the census:
http://htaindex.cnt.org/downloads/Methods.3.23.10.pdf
According to page 12 of that document, the census data they used is also now 10 years old.
Nationally transit commute times are 48 minutes and auto commute times are 25 minutes. Portland is 22 for auto compared to 42 for transit.
So we’re about 1/25th above average for both? Doesn’t that mean we’re doing something right?
very good~! I like it~!
very good~! I like it~!
Oh, and they are wrong about driving vs. density. Notice that they carefully used data from ONE state instead of national data. When you look at national data, you see that density really doesn’t reduce driving much until density gets to the point that it has caused terrible congestion.
I have posted the peer reviewed journal data & charts at:
http://www.portlandfacts.com/smart/densitycongestion.htm
They also ignore the fact that public transit costs SEVERAL times what driving costs, so the overall cost to society will be much higher if more people take transit. Although some claim that density makes transit work better, it really doesn’t do that either. For instance the average cost of bus transit in the ten larget cities is $1.01 per passenger mile with an average trip length of 4.1 miles. For comparison an auto costs $0.33 per VEHICLE-mile, or about $0.25 per passenger-mile depending on what passenger load you use.
See:
http://www.portlandfacts.com/top10bus.html
Thanks
JK
JK,
I don’t think you or anyone else can dispute that a suburban lifestyle is more energy intensive than an urban lifesytle – longer commutes, larger homes.
People often don’t take these things into consideration when purchasing a home – often to their detriment. Rising energy prices can quickly tweak the balance between which areas are more affordable than others.
snolly Says: I don’t think you or anyone else can dispute that a suburban lifestyle is more energy intensive than an urban lifesytle
JK: Oh, really. Why don’t you show us some credible evidence?
snolly Says: longer commutes
JK: Why would you expect longer commutes? Most jobs are in the suburbs, not the central city. There is little correlation between density and driving from farmland density to about triple that of Porltand. See: http://www.portlandfacts.com/smart/densitycongestion.htm
snolly Says: larger homes.
JK: Are you trying to say people do not have the right to live in the home of their choice? If so, then you must be willing to let others dictate how you live.
snolly Says: Rising energy prices can quickly tweak the balance between which areas are more affordable than others.
JK: Only for those few that have long commutes AND are unwilling to get a more efficient car. I hope you know that high energy prices cause people to switch to more efficient cars, not to switch to transit or move. For instance, in the EU15 countries with $8/gal gas, 78% of motorized travel is be AUTOMOBILE. Transit is rapidly losing market share. Has been for decades.
Thanks
JK
JK:“Why would you expect longer commutes? Most jobs are in the suburbs”
ws:Jobs are generally not concentrated in the suburbs as they are in cities as they’re more spread out…thus making your point inaccurate. Total number of jobs has nothing to do with it.
Portland (city) itself is only 133 sq miles. Washington Co. is something like 700+ sq. miles.
JK, I’d like to see some updated sources on that. I notice 1990 is used for some graphics, 1996 for others, and uncited data for more. Do you have anything from the last 14 years? From riders per mile I know we’re comparable to cities like San Francisco and Charlotte for light rail boardings per mile (I can’t find the stats at the moment, but I know it’s around 2000 for all), so I’d say that’s not so bad.
I know San Diego’s LRT (the Trolley) does pretty well per mile compared with Portland (the MAX, SD gets about 85% of the riders we do with about the same mileage of LRT from what I remember), which for such a car-centric city is pretty impressive. To be fair they also have more commuter rail than WES, it’s called the Coaster, which runs along the coast and connects San Diego’s coastal communities to the rest of Southern California.
It makes our planning departments’ purposes weirder to me though – why is San Diego, with all its canyons and water, about as dense as Portland? Why are Los Angeles and Buffalo more dense, even with all the abandoned land in those cities?
San Diego has skyrocketed in commute times since 1990, and built a ton of Trolley lines since then, for example. Buffalo has lost a ton of population and not removed any freeways for another.
San Diego built out for less population than they currently have. Buffalo has plummeted in population since their roads were built to accommodate more than twice their current population.
1990 was a long time ago to many of us, so it seems like an irrelevant point to make what the commute times used to be when 20 years ago San Diego was a much smaller town, and Buffalo was a healthier city still. Without considering freeway/light rail/commuter rail miles per capita it becomes a weird comparison.
Yes, Buffalo has a lower average commute time than Portland or San Diego, but they also have a much lower car ownership rate and passenger miles traveled on buses. Conversely they have one of the highest rail ridership rates in the US. As a result the highest income people have long commutes that take very little time. If you want you can buy a historic mansion for $75,000 or so. You can also spend an afternoon touring burnt out houses and factories the city can’t afford to tear down. Buffalo has more houses on a waiting list for tear down than Detroit right now, but they have an incredibly high rail transit rate.
San Diego is a different blend. You can find houses that are still in the current economy on the market for $5 million plus, and even a crappy place in a gang infested neighborhood would be a bargain at $200,000. Many neighborhoods are great, but there are some parts much worse than any part of Portland.
What’s my point? Sometimes it becomes more about how a community is served by transit. Portland has done well with serving all classes of communities with transit, and while it may not be perfect, it’s better than other solutions I’ve seen first hand. Maybe we could plan around our growth better, but we’re doing pretty well compared to other cities.
Dave H Says:
JK, I’d like to see some updated sources on that.
JK:
On what? (I have posted several messages above and it is not obvious which one(s) you are referring to.)
Thanks
JK
http://www.portlandfacts.com/smart/densitycongestion.htm was the one (thought I quoted it, must have edited it out). Some very dense cities now have very little congestion left for various reasons (compared to 1990), and I’m curious with how that data may reflect this.