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 rentswhich 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.