Transportation costs undercut housing affordability

Transportation is often the second-largest expense for families, next to housing. Yet many homebuyers only consider finding a very affordable mortgage when purchasing a new home. That type of search often places families 10 to 15 miles away from the downtown of the city where they likely work. Scott Bernstein, president and co-founder of Center for Neighborhood Technology, calls this phenomenon of suburban living “drive till you qualify.” CNT estimates Baton Rouge homeowners spend 22% of their income on housing. CNT also says housing is considered affordable if it costs less than 30% of a household budget: meaning, for example, the savings of living in Livingston Parish or Ascension Parish doesn’t outweigh the cost of having to commute to Baton Rouge. “The housing looks affordable, but not when you throw in costs for transportation,” says Bernstein, a guest speaker this morning at a 2012 Louisiana Smart Growth Summit seminar in Baton Rouge. CNT studies show foreclosure rates tend to spike about six months after gas prices spike. To help balance the equation, CNT has created a website—abogo.cnt.org—that homebuyers can use to figure out what a typical household may spend each month in transportation from any particular address. For example, the website shows a Zachary household may spend $300 more each month in transportation than someone who lives in the Perkins Road overpass area. As CATS ramps up bus transportation in the Baton Rouge area with seven express routes, Bernstein encourages city planners to follow the model of the Texas city of El Paso: encourage affordable housing along the new routes. —Adam Pearson