Commuting costs can negate suburban home choices
March 24, 2010
Enticed by lower prices, many home buyers opt for long commutes to work, thinking it's worth the drive to the suburbs.
But that's not always the case, according to a report from the Washington, D.C.-based nonprofit Center for Neighborhood Technology.
Problem is, according to the study, many are spending more on transportation than they figured and, consequently, the home isn't affordable after all.
People in the Tampa-St. Petersburg-Clearwater metro area spend about $12,000 per household each year on transportation, the study said. (Those costs include car payments, gas and maintenance.) That's a whopping $13 billion a year.
"Tampa Bay has attracted people because of its affordable housing prices," said Scott Bernstein, founder and president of the nonprofit. "But the fact is people there are spending a lot on transportation.
Why is this bad?
Tampa Bay households making the area's median salary of $37,406 spend about 33 percent of their income on transportation and 25 percent on housing.
Seventeen out of 28 regions studied spend more of their income on transportation than housing.
The federal department of Housing and Urban development recommends families spend no more than 30 percent of their income on housing.
"People seek locations to meet this goal, but they don't take into account the cost of transportation," said HUD deputy secretary Ron Sims.
Using the 30 percent rule of thumb, the study shows, seven out of 10 U.S. communities, or 69 percent, are considered affordable. That shrinks to four out of 10, or 39 percent, when both housing and transportation costs are considered. The nonprofit recommends families spend no more than 45 percent of their incomes on the two expenses.
So what should be done?
The nonprofit urges governments to consider offering alternative means of transportation. Consumers, Bernstein said, should think about buying a home closer to work and shopping locations.
The nonprofit has also asked real estate agencies to include average transportation costs in home listings.
©2010 Media General Communications Holdings, LLC.
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