The Corpus Callosum

Spend 20 Percent On Commute?

An
article in Forbes documents exorbitant commuter costs in some
communities.  In and around Houston, for example, the average
commuter spends 20% of their household income on commuting.
 That, together with housing costs, adds to more than 50% of
household income.  The author ends up making a case for a
pro-environmental cause: mass transit.

The make the point that mass transit systems are cost-effective, in
light of these high commuting costs.

href="http://www.forbes.com/home/realestate/2007/08/07/commute-housing-expensive-forbeslife-cx_mw_0807realestate.html">America’s
Most Expensive Commutes

Matt Woolsey
08.08.07

It’s
often said that the trip to work can kill you. But if you live in
Houston, what really takes a beating is your wallet.

There, the average commuter spends 20.9% of his annual household costs
on getting to work.

He’s not alone. Cleveland, Detroit, Tampa, Fla., Kansas City, Mo., and
Cincinnati also landed on our list of the country’s biggest cities
where transportation eats up a fifth or more of household costs…

…”In Houston, the cost of transportation is the No. 1 household
expense, above shelter.”

But that’s in part because Houstonians spend a lower than average
proportion of their take-home pay on housing.

And that’s the trade-off.

The percent of household income Houstonians spend on transportation may
be the highest in the country, but when combined with the amount
residents spend on housing expenses, Houston’s aggregate cost ranks
them 14th, with the composite cost equaling 52% of household income….

Worst hit by the composite ranking were the residents of Tampa and
Miami where housing and transportation costs were the most out of sync
with the average household’s income levels. Tampa residents spent
57.7%, while Miami denizens spent 57.5% of their take home pay on the
two.


In Miami and Tampa, you have to make almost 3 dollars before you can spend $1
on something other than housing or transportation.  

The author’s main point: unfortunately, when commuting costs go down,
housing costs go up.  

It’s
important to understand, though, that the least costly commutes tend to
be accompanied by high housing costs. New York and San Francisco were
among the cheapest in the country, at two and seven respectively and
have some of the highest housing expenses and least affordable housing
markets in the nation.


The reason this is in a financial magazine is at the end:

Dallas
is investing $4.86 billion in expanding its commuter rail system,
Dallas Area Rapid Transit (DART), which services area suburbs and
neighboring Fort Worth. The job is expected to be completed in 2013 and
local economists say the city should reap $8.1 billion in increased
economic activity over the life of the project. Houston, on the other
hand, has mainly focused on road construction and expansion, which
isn’t expected to pay off as well.


I think that if you look at the benefits of improved air quality,
lowered carbon emissions, not to mention improved mental health, I
imagine the economic benefits would be greater than the $8.1 billion
they mention.

The author did not say anything directly about the environment.
 In fact, he may not have even thought about the subject.
 What this shows, is that sometimes it makes sense to do the
right thing, even if you are only looking at the money.

Comments

  1. #1 Richard Simons
    August 13, 2007

    Changing the zoning regulations to encourage business development to be interspersed with housing could go a long way to ease the commuting problem. There are many businesses that could be placed within walking distance of housing without causing problems.

  2. #2 qetzal
    August 13, 2007

    I wish the data were available in more detail. From the Forbes story, I went to the Surface Transportation Policy Partnership web site, but their report doesn’t give much additional data.

    In particular, it would be nice to see spending comparisons in dollars, not just percent. Higher transportation costs as a percent of total doesn’t automatically mean higher absolute transportation costs. Both Forbes and STPP allude to that when they discuss the tradeoff between transportation and housing costs. But without absolute numbers, it’s impossible to judge the real differences in transportation costs.

    It would also be nice to see how the transportation costs break down into sub-categories like gas, parking, tolls, insurance, maintenance, etc.

  3. #3 Scott Belyea
    August 13, 2007

    In and around Houston, for example, the average commuter spends 20% of their household income on commuting.

    No. What the article actually says is …

    There, the average commuter spends 20.9% of his annual household costs on getting to work.

  4. #4 Manny
    August 13, 2007

    The article also refers to “proportion of their take-home pay” and “percent of household income,” suggesting that the authors themselves consider these equivalent to percentage of “annual household costs.”

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