Funny about Money

The only thing necessary for the triumph of evil is for good men to do nothing. ―Edmund Burke

Cost of commuting

Here’s a trade-off for you: Buy a house in the far-flung suburbs to save a few bucks and end up spending half your income on the combined costs of housing and transportation.

In a recent Play-Nooz story, ABC’s Phoenix television station reports that people who think they’re saving money by purchasing in remote suburbs have to pay so much more on automobiles and gasoline that the combined costs of housing and transportation consume about 45 percent of their family income, an amount generally considered unaffordable. Anything this outfit says has to be taken with a large grain of salt, because the reporting can be…well, pretty laughable.

So I checked out this interactive map by the Center for Neighborhood Technology, a nonprofit that promotes urban sustainability. Indeed, it appears that when you combine housing and transportation costs, a large part of the Phoenix Metropolitan Area becomes unaffordable. Factoring in housing costs alone does cause a larger region to consume less than 30 percent of the family income. Add transport to the mix, and you see that more people spend 45 percent or more of family income on driving plus housing.

At first glance, this sounds credible, given the astonishing cost of gasoline. I have no car payment, yet in the past month I’ve paid almost $110 just for gas—and I haven’t gone anywhere except up to the college and to a few stores, most of them on my way to and from the college. If I had to pay $300 to $600 a month for a car, as many people do, transportation expenses would run 18 to 32 percent of my income—when I’m teaching three sections. In the summer, when I can’t get a job, such costs would consume 31 to 71 percent of net income.

Spend a few moments studying the housing-only map, though, and you’ll see that large parts of the “drive until you qualify” burbs never offered any bargains. The Southeast Valley—Chandler, Gilbert, Mesa, Tempe—is pricier than the close-in districts to start with. Granted, they’re new, shiny developments (so shoddily built that they won’t stay that way for long…), and granted, the city of Phoenix has done everything it can to thump centrally located neighborhoods. (The city and the county are run by developers—they take office on boards of supervisors and the city council. It’s in their interest ensure that the central city deteriorates, fostering white flight, so that people will buy their plaster-and-Styrofoam houses in the ever-expanding sprawl.) Scottsdale has always been ridiculously expensive; it’s an enclave of whiteness that has worked to develop a upscale reputation. The area to the northwest is largely occupied by retirement communities; cost of housing and taxes are lower there because of the downward pressure exerted by the demographic. The area to the south of the central city has been low-rent from the git-go; much of it is dangerous slum, schools are horrific, and few who can afford to live elsewhere willingly settle there.

So, I would argue in the first place that new suburban housing is more expensive than centrally located middle-class housing. It’s not true that people buy in the sticks to save money; they buy in the sticks for demographic reasons (if you don’t know whereof I speak, consider the latest bit of hilarity from the state house, which reflects the tenor of our elected leadership) and because they hope for schools that are more or less adequate. People who buy for those reasons don’t concern themselves with the cost of transportation—they regard it as just part of the cost of living.

When you add the cost of automobiles to the cost of housing, you do get a total that consumes way too much of net income. However, Drachman Institute Associate Director Marilyn Robinson’s claim that “If a household can get rid of one car, they can increase their available income by approximately $8,500 a year. They can do that if they have access to good and frequent transit service and if their neighborhoods include amenities like shops and recreation within walking distance” is an absurdity, at least where Arizona cities are concerned.

Few central or suburban neighborhoods are within walking distance of “shops and recreation.” The two  grocery stores closest to my house are in unsafe areas and are overpriced specifically because residents living nearby can’t afford cars and so form a kind of captive consumer base. These stores can charge anything they please, because too many of their customers can’t easily shop at the competition. The closest grocery store where I feel safe to get out of my car in the parking lot is three and a half miles from my house. Bicycling over the homicidal streets is out of the question, and you can be very sure I’m not walking seven miles in 110-degree heat to buy a few groceries.

There is no credible public transportation here. Buses are slow, unholy inconvenient, uncomfortable, and full of unwashed and often scary transients—the homeless mentally ill, of whom we have a large population, use the buses and lightrail as rolling air-conditioned space. They ride around and around to stay cool (or, in winter, warm) and to come out from under the oleanders for awhile. The lightrail system is a cute novelty but less than useful for commuting and shopping. Though a bus does run up to the college, the city is about to discontinue that line by way of cost-cutting, and it’s not a viable means to get there—even if the buses were comfortable and safe, I wouldn’t think of spending an hour or more to make a ten-minute drive.

Thus there really is no part of the city where a family with two adults, both of whom work, would not genuinely need to own two cars.

So the Housing and Transportation Affordability Index doesn’t tell you much, except that owning a car is expensive and that housing in the aging central part of the city is cheaper than housing in the shiny new suburbs.

Try the maps on a metro area that does have decent public transit, such as the San Francisco Bay Area, and you get a different picture. Housing costs there are so high it doesn’t much matter whether you have to drive. Another highly desirable area, one supposedly designed for sustainability, is Portland, Oregon: again, housing costs in the outlying suburbs appear to be far higher than those in the central city; add the cost of transportation, and few areas are affordable. In New York City, equipped with a large and much-used public transit system, mode of commuting seems to make little difference in affordability. Houston residents, however, pay a high premium for commuting. For people who live around New Orleans, commuting apparently is quite a burden; however, that may be a function of low incomes there. Change the demographic on the maps from “regional typical household” to “national typical household” and the cost of living looks pretty moderate, whether you drive to work or not.

So, I don’t know what all this means. It’s not cheap to drive a car. But on the other hand, riding public transportation isn’t cheap, either: riding buses and trains costs something, and cities with full-service systems have high taxes and a high cost of living. While I’m not pleased about having to pay $110 for gasoline—almost twice what I budgeted for—the cost is far from drastic enough to get me out of my car. Even if it were, there’s really no choice, and so the issue is moot.

How much does it cost you to get around your city? And if you add your typical cost of transportation to your cost of shelter, what proportion of your income does the total consume?

Be Sociable, Share!

Author: funny

This post may be a paid guest contribution.

15 Comments

  1. Makes sense. In the Seattle area, housing is painful (though not as bad as some areas) and you’ll pay around $300,000 for a two-bedroom.

    I knew a guy who commuted from Puyallup (roughtly 50 miles south of Seattle) to Bellevue (roughly 12 miles east of Seattle) five days a week. That’s at least 40-miles each way. And why did he buy in Puyallup? Because it was the only area where they could afford the house they wanted.

  2. What an awful commute! And think of how frustrating to find it could be penny-wise and pound-foolish. If you’re spending 45% of your income on combined commute and mortgage, you might as well be spending 45% on a more expensive in-town dwelling that would let you ride a bus or train to work…or at least spend less on gas.

  3. I consider myself lucky. I live in a low cost city and was able to purchase a house within a mile from work. Here in Tulsa, the mass transit is a joke, so I’m fortunate to not have the commuting expense if I had purchased in the burbs. I could have gotten more house for the money in the burbs, but the house I have is enough for my needs, so it is worth living close in. We have wonderful neighborhoods close in. My housing and transportation is about 50% of my income but its by choice. I should have my house paid off by the end of next year!

    • @ Norman: Wow! Congratulations–that will really cut the bite into your take-home pay. And (mwa ha hah!) it opens the door to Bumhood: once the house is paid off, the cost of living drops so drastically a person can begin to think seriously about jumping off the day-job treadmill.

  4. I loved living in Bloomington IN when we were in grad school–we lived near downtown and could walk to food coop, public library, used bookstore–and, of course, campus (which had loads of cultural events, esp music). My dream for retirement is to be in a similar situation.

  5. We live in a small city in France of about 50,000 people right now. I’ve been unable to drive since I moved here in July and still don’t have my driver’s license. It’s never been a problem because we’ve lived in places where I can walk to all necessities: doctor, groceries, etc. It’s also safe enough. If I need to get to a big city–usually for bureaucracy or some kind of technical medical stuff, I can take a bus. Some of the buses are kind of pricey and cumbersome, but I don’t need them often. Prices in such a hooked up city: a 3 bedroom apartment will run you 140,000-210,000 euros. Houses are usually closer to the 300-400,000 range.

    We do have a car that my husband uses to get to work and for weekend trips. Now. . .DH could actually find a job in a small town where housing prices are low AND live in the same town. Why doesn’t he do it? Because he doesn’t want to live in a small town/village where he’s also the school teacher. I think that’s kind of a bummer because we could live car free, however, I do understand not wanting to see your students every time you leave the house. No privacy.

  6. @ Simple in France: So, that’s $161,830 to $269,720 for an apartment, or $404,580 to $539,440 for a house. That’s pretty stiff for a house, though the apartment prices are comparable to what you’d pay around here, at least when the economy’s functioning. Cheap compared to New York; about average for other big U.S. cities with real public transit systems; high compared to most U.S. cities. Interesting.

    Could he get a job in one village and maybe live in a neighboring town? Then of course he’d have to drive to work, which he may not relish under the circumstances.

  7. Best decision I ever made – buying a small house inside the Beltway, Washington DC – in Arlington, VA — as opposed to a large house in the burbs. Driving to work takes 15 min. I can bike to work – that takes 40 min. I can take public transportation – that takes, well, its available, let’s put it that way. For most of our time in Arlington, we have been a one car family. We dont live in our cars commuting on the highways – and we dont have the transportation costs. And hey, Arlington is great!

  8. I live 25 miles from where I work in Fairbanks, Alaska. We have 40 acres and a dry (no running water) cabin, our own power system, and have invested around $60,000 in the land and cabin.
    I could live in town and bike to work, and own a 3 BR house for about $175,000. Instead I choose to drive the 50 miles round trip at an expense of about $300/month in gasoline costs. But, I have no house payment!

    • That’s a significant saving on the mortgage payments for a $115,000 loan (i.e., $175,000 – 60,000), which would be something over $500 a month. Have you figured in the cost of owning and maintaining the vehicle?

  9. I hadn’t really thought about it, but since I do have all the records it was easy to figure out. I bought a 3-year old vehicle in 2002, with 50k miles, for $20,500.
    Let’s assume the residual value of my truck is now $0.00, nada, used-up.
    I paid, including all interest, principal, insurance, gasoline, repairs, maintenance, tires, and accessories (a few $100’s) $69,105. In that time I put on 141,000 miles, equaling 49.0 cents per mile. Take out insurance and that drops to 42.6 c/mile.
    My commute alone is 12,500 miles/year. = $5881/year with insurance, and climbing as gas goes up.
    I would have a vehicle anyway, whether or not I commuted this far, so some of the costs are somewhat fixed. I could surely commute cheaper with something besides a full-size pickup, but 4×4 and fairly good ground clearance is a necessity on my current road, at the expense of only about 14mpg year-round average.

    It’s all about choices. Even a loan on a different home, at $115,000 principal, 5%, 30 yrs, is about $620/mo. My commute costs are apparently $490/month plus my time, but I get to live on my own 40 acres.

  10. @ dan: The 40 acres is big. It’s worth quite a lot to have all that space. So is no house payment!

  11. It’s defnitely a lifestyle choice, and fun for now. I don’t know if I’ll want to do it on into old age though. Hauling water 6 gallons at a time and cutting firewood isn’t easy.
    Thinking about the non-commute choice, it’s not easy to bike around Fairbanks in winter either. Temps sometimes get to -60F and are colder than -20F quite a lot. I tend to put my bike away at about +45F.!

  12. @ dan: Hereabouts, if you have a place out in the sticks that doesn’t have a well, you can hire a truck to haul a tankful of water in for you. Then you just attach the plumbing to your water tank. I understand it’ll last a month or so. Plus it rains in Alaska, no? Maybe you could get a collection barrel. You’d have to filter & sanitize it, or you could use it for laundry, flushing, and gardening.

    O’course, such a thing would presumably freeze solid in the winter there. Voila! Your private backyard skating rink!

  13. Yep, we’re doing rain catchment for garden water. So far all summer we’ve had maybe an inch of rain, so it’s never enough. Alaska is quite large with boreal rain forest to arid sub-arctic desert. I happen to be in the dry part! The water truck won’t go down the last 1.5 miles of my road – part of my plans include a 300-400 gallon tank for the truck (buying water at the local outlet fairly cheap, like a few bucks to fill a truck tank).
    Lots of people here have water tanks; water in Fairbanks is often so mineral-laden that well water is undrinkable. We have a lot of arsenic in wells too. One trick is to bury them below frost line (like the top of the tank being at least 4′ down) and then insulate over them, or place them in a garage.
    For now though, I’ll stick with my free water fillup at a state-tested, year-round spring on my way home.