Housing and Transportation
After housing, transportation is the second-largest household expense, so in any conversation about housing affordability, it is helpful to examine the cost implications of transportation.
As housing affordability becomes more problematic, many people are forced to move further and further away from where jobs are and “over-commute” by driving long distances to and from work. In California's rural areas, high transportation costs often negate the relatively more-affordable housing prices. This combined “housing + transportation” cost can leave residents in rural communities with a cost-of-living comparable to their urban and suburban counterparts.
When households of any income level live near transit and job centers, they drive less. But it is becoming harder for them to afford housing near these locations. Housing near transit is in high demand, and rents and property values near transit are 10 to 20 percent higher on average than similar homes further from transit. Modeling and analysis by the Legislative Analyst’s Office “suggests that California’s high housing costs cause workers to live further from where they work, likely because reasonably priced housing options are unavailable in locations nearer to where they work.” When households move further from job- and transit-rich areas to find more affordable homes, they encounter consequences in the form of higher transportation costs and commute times. Beyond the individual consequences for households, there are societal consequences including greater pollution and greenhouse gas emissions and decreased productivity due to longer commutes.
Housing and Transportation Affordability
The Center for Neighborhood Technology developed a Housing and Transportation Affordability Index (H+T Index) that is widely used to examine housing and transportation costs.
Travel demands are determined by where people choose to live, but also by where they can afford to live. The proximity of jobs and services, density, and the availability of public transportation are among the factors that can affect the need for automobile travel and thus transportation costs. In certain communities, higher housing costs can be mitigated by lower transportation costs (if less automobile travel is required). Conversely a household seeking more-affordable housing costs by living further away from jobs and services may face higher transportation costs that increase its combined housing and transportation costs.
Unlike housing affordability, which is widely accepted as paying no more than 30 percent of income toward housing costs, there is no official affordability definition for housing and transportation costs combined. However, there are discussions about defining a combined affordability threshold at 50 percent of income.
Learn more about housing and transportation in California's Housing Future: Challenges and Opportunities.