Transportation and housing costs are rising, but wages aren’t keeping up

For people with moderate income, housing and transportation take up a disproportionate amount of their income – 59 percent, according to a survey by the Center for Housing Policy, a research affiliate of the nonprofit National Housing Conference, dedicated to urban sustainability.

These rising costs affect people’s ability to provide for other needs, like food and healthcare. Most families either cut corners or accrue debt.

In areas like Washington, D.C., Boston and San Francisco, high income levels combat high housing and transportation costs. However, in other urban places like Riverside-San Bernardino, Calif., Miami and Los Angeles, relatively low median incomes do not keep up with moderate to high housing and transportation costs. The average burden of these expenses makes up 65 to 72 percent of household income.

The inclusion of transportation costs tips the scale of affordability in metro areas. When the top 25 regions indicated by the CHP report are ranked by most to least affordable only by housing, Pittsburgh ranks no. 1. Pittsburgh drops to no. 7 when transportation costs are added. Chicago ranks at 18 but moves up to 13th place because transportation is relatively inexpensive, CHP researchers say.

Growth in housing and transportation costs outpaces incomes from 2000 to 2010. Data shows that in spite of the housing downturn, housing expenses between 2006 and 2010 were 52 percent higher than in 2000. Additionally, gas prices rose and transportation expenses went up 32 percent. Overall, housing and transportation costs increased at a rate of 1.75 times the growth of income during this period. In Detroit, housing and transportation costs rose 4.5 times faster than income.

Researchers recommend that local and state governments help reduce costs for moderate-income households. They could preserve already-affordable homes near job hubs and public transit stations – location-efficient areas. The researchers suggest that authorities reduce construction costs, improve public transportation and use public investment to support affordable housing. By focusing on these simple steps, local and state government can lessen the burden on moderate-income households.