Friday, 9 May 2014

Seek affordable living not affordable housing

Summary: Many residents of cities struggle with finding an affordable home. Unfortunately, in seeking affordable housing they often adopt the conventional choice of buying into outer suburbs or car-dependent areas. This post covers the various ways individuals can prioritise affordable living instead - not just through choosing to live in areas that aren't car-dependent, but also by reducing house size and making efficient use of space, renting rather than buying, sharing amenities and leveraging public/community space.

Suburban Homes by LancerE, on Flickr
LancerE 

Related Posts:
> See the lifestyle choices category of this blog.
Choose where to live based on walkability and bikeability
Spend $85-230/week more on housing if you get rid of your car

Details:
1. Conventional assessments of affordable housing mistakenly ignore the costs of transport and impact of car-dependence
- In developed countries, the financial costs of transportation can be massive and must be included in decisions on how affordable different locations are:
"If you have to drive a car to get around, that can cancel out savings from living in an area with cheaper housing. The average cost of owning, insuring, maintaining, and gassing up a car is more than $9,000 a year, according to AAA. Beyond cost of living, there’s quality of life. The average commuter in Houston wastes 58 hours a year stuck in traffic."
Grist: Hey, list-makers - Most millennials don’t want to live in sprawling, car-dependent cities
2. When transport costs are properly factored in, affordable housing calculations are very different
- Transport costs are typically a household's second largest expense and can vary greatly based on the characteristics of the urban location. In car-centric cities, outer suburbs tend to be less compact, be further from destinations and more car-dependent:
"The Center for Neighborhood Technology’s Housing and Transportation Affordability Index provides a more comprehensive way of thinking about the cost of housing... as it examines transportation costs at a neighborhood level. The Index shows that transportation costs vary between and within regions depending on neighborhood characteristics. People who live in location-efficient neighborhoods - compact, mixed use, and with convenient access to jobs, services, transit, and amenities - tend to have lower transportation costs. People who live in location-inefficient places that require automobiles for most trips are more likely to have high transportation costs."
CNT: Housing + Transportation Affordability Index - About the Index
- In the table below it's clear that transportation costs do vary massively and even on a city-wide basis this can make a huge difference to total affordability (housing + transport costs / income). For example, everyone knows San Francisco housing costs are very high, but its transportation costs are very low and so it's overall affordability ranking is 6th rather than 19th.

CNT: The Growing Costs of Place (PDF)

- Another analysis of combined housing and transportation costs which tells a similar story about the low transport costs of many cities with expensive housing is provided here: CityLab: What Does It Really Cost to Live in San Francisco?

3. Low median incomes and high transport costs make some cities particularly unaffordable
- Your household income is still very important. Cities like San Francisco and Washington DC are great for affordability if you are obtaining the advantages of the well-paying jobs they have. However, there are some cities where there are few well-paying jobs but the transport costs are very high. For example, most residents of Indianapolis are being impoverished because of the poor public transit infrastructure and urban design forcing them to spend a very large proportion of their incomes on transport:
A typical Indianapolis household earns an annual income of $53,000. This household spends 23 percent of that on housing, which counts as affordable. But Indianapolis also demands another 20 percent of earnings in the form on transportation costs. And that's to pay for the privilege of driving more than 22,000 miles per year.
CityLab: What Does It Really Cost to Live in San Francisco?
CityLab: What Does It Really Cost to Live in San Francisco?

4. Widespread access to efficient public transport is critical. For individual households the really big savings only come from refactoring your life to be car free
- Widespread access to efficient public transport appears to be the key factor in reducing city-wide transport costs. The cities with the lowest transport costs have widespread access to efficient public transport and this results in significant savings for large numbers of residents, particularly from the work commute. However, it's also clear that the averages are heavily influenced by the large number of households that are able to be car free in these cities. It is these households that are gaining enormous savings. This reveals what's really required to obtain the greatest benefits - not just optimising where you live but also all the other things that are required to get to being car free.

CityLab: 7 Charts That Show How Good Mass Transit Can Make a City More Affordable

5. Neighbourhood choice is most critical to transportation costs and quality-of-life impacts
- Unsurprisingly there is often much greater variation within cities than between them. However, even within nearby suburbs of comparable housing costs, the variation in the transportation costs between neighbourhoods is considerable. This is evidence that, even for a given housing budget (buying or renting), transportation implications are critical to achieving a lower-cost, higher quality life that makes walking and cycling feasible.

CNT: The Growing Costs of Place (PDF)

6. Rent closer to your key destinations rather than buying a house so far away you can't cycle
- Many people make the mistake of following the conventional norm of buying a house somewhere as soon as they can afford it. Whether it's due to social expectations, status anxiety, fear of missing out later or wishing to build wealth through climbing the property ladder. When invited by The Guardian to identify barriers to cycling, Helen indicated the major factor is that she is eager to own a house, but due to the cost, is feeling forced to move 30-40min from work.

GuardianWitness: What's stopping you from cycling?

- Below you can see that for moderate-income households, the combined costs of housing and transportation are significantly higher for owners with a mortgage (72% of income) than for renters (55% of income). This is purely a result of the desire to purchase cheap, larger houses forcing these households to move to location-inefficient, car-dependant urban areas.

CNT: The Growing Costs of Place (PDF)

7. Choose a home with small bedrooms. Or if you have kids, choose a home where a bedroom can be shared
- Privacy and having your own space is wonderful but in desirable city locations the cost of each additional bedroom is massive. For many people, bedrooms are only used for sleeping and not living and are a huge waste of space. Yet, most people go along with conventions of a bedroom for each person and ignore the effect this has on how far out they'll need to move.

- Even organisations that have sincere interests in improving affordable housing opportunities reinforce this mistake. Anglicare Australia, in its 2014 Rental Affordability Snapshot, makes this assumption:
"In determining whether the property is appropriate, we apply the following assumptions:
- A room in a share house or a bedsit is suitable for a single person, a 1-2 bedroom property is suitable for a single person or couple, and a 2-3 bedroom property is suitable for parents with children.
- Share houses and bed-sits are not suitable for couples.
- Households with 2 children require a 3 bedroom property – we assume that it is not appropriate for the children to share a room."
Anglicare Australia: 2014 Rental Affordability Snapshot (PDF)
- By defining "appropriate housing" such that making efficient use of space isn't allowed, even for the least well-off, Anglicare Australia reinforces the pattern of poorer families putting housing space ahead of lifestyle, amenity and the freedom to get around by walking or cycling.


Further Info:
Plan Melbourne: Metropolitan Planning Strategy

Sunshine Coast Council - Affordable Living Strategy

Better Cities & Towns: Do we need affordable housing or affordable living?

CNT: Housing + Transportation Affordability Index
> CNT: The Growing Costs of Place - Report (pdf)

CityLab: What Does It Really Cost to Live in San Francisco?

CityLab: 7 Charts That Show How Good Mass Transit Can Make a City More Affordable

Grist: Hey, list-makers - Most millennials don’t want to live in sprawling, car-dependent cities

Grist: Out of reach - How sprawl jacks up the cost of ‘affordable’ housing

Snapshot of affordable housing around the country reveals a bleak picture

The Guardian: Urban sprawl and lack of public provision leads to ‘transport poverty’

Anglicare Australia: 2014 Rental Affordability Snapshot (pdf)

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