Living may actually be cheaper in the region’s core

Originally written by David Alpert  and posted on Greater Greater Washington
August 3, 2011

The classic rule of thumb, “drive ’till you qualify,” holds that the farther you go from a city center, the cheaper the cost of living. But a new report shows how in the DC area, housing near the core and near transit stations can be cheaper when transportation costs are factored in.

The Office of Planning worked with the Center for Neighborhood Technology to customize their “H+T” housing and transportation index for our region, and to incorporate more recent American Community Survey data as well as Census data.

Change in H+T cost. Red areas: Housing < 30% of AMI but H+T > 45%. Green: Housing > 30% of AMI but H+T < 45%. Image from CNT.

Along the western Red Line corridor in Montgomery County or the Orange Line in Arlington, for instance, housing is fairly expensive, often exceeding 30% of Area Median Income, the standard threshold for “affordability.” After studying metro areas across the nation, with excellent transit infrastructure or none at all, they determined that 15% of AMI was a good threshold for reasonable transportation costs.

Some areas have housing costs below the 30% threshold, but when adding in transportation, the total housing plus transportation exceeds 45% (shown in red below). In other areas, mostly in DC and Arlington, housing costs are higher than 30%, but the low transportation cost pulls the total down below 45% (green):

This analysis reinforces two conclusions. First, we need to continue to add housing in the areas with lowest transportation costs, including close to jobs. Not only is it greener, but it’s the only way to achieve the least possible H+T cost for households.

H+T burdens by commute distance. Image from Beltway Burden: The Combined Cost of Housing and Transportation in the Greater Washington, DC, Metropolitan Area, Urban Land Institute Terwilliger Center for Workforce Housing, 2009.

Second, when talking about building and maintaining affordable housing, some argue that people should just move out to somewhere like Laurel or Bowie where housing is cheap. It might be, but transportation costs also rise, wiping most most or all of the gains and ultimately creating an outer boundary on how far people can move to actually save money.

The most affordable H+T places are the east side of DC, especially east of the river, and Prince George’s County inside the Beltway. That’s why it’s most critical to add housing capacity to the underutilized Metro stations and other places where, historically, developers and banks have been unwilling to invest.

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