Richard Florida
by Richard Florida
Fri Feb 20th 2009 at 9:14am UTC

Housing’s Burden on All of Us

Ryan Avent points to this finding from a 2006 report from the Center for Housing Policy, which documents the share of income people devote to housing and transportation. It’s higher than you might think.

With annual combined housing and transportation costs at 39 percent of the median income of $87,398, Arlington County becomes the most effective when you use this formula. Next in line are Alexandria, with a median income of $80,510, and Fairfax County, with median income of $100,419. Both have combined housing and transportation costs at 41 percent.

These are not disadvantaged places we’re talking about, but some of the most affluent counties on the planet. Avent notes: “For residents of exurban Nova counties, like Prince William and Spotsylvania, total housing and transportation cost can be 50 percent or more of median incomes.”

How can we even imagine building an innovative, creative, and knowledge-based economy when housing and transportation costs eat up so much of household income? It would be like trying to build a modern industrial economy, say in the 1930s or even 1950s, but having food (that is the cost for agricultural products) consume half of all income. When housing and transport eat up this much on average, what’s left over to create effective demand for the industries, technologies, and business models of the future?

Before we can get out of this mess, housing and transport have to become a whole lot cheaper.

3 Responses to “Housing’s Burden on All of Us”

  1. Larry Says:

    well, interestingly enough, it was 4 times as much as we spend now:
    http://www.ers.usda.gov/briefing/CPIFoodandExpenditures/Data/table7.htm

  2. Robert Says:

    These are costs of housing and transportation of median incomes of various localities.

    I’m presuming therefore that there’s a “long tail” of housing location and choices that these median income households simply won’t touch with a bargepole because of what we shall politely call “class”.

    How about we call it “prejudice”? Or is that too unfair – maybe there are no alternatives, and all choice of housing location is based purely on type of house and price.

    Yeah right. There are “good” areas and “bad” areas. “Bad” areas usually means ethnically diverse. I’m sure if you look at actual crime rates compared to perceived crime rates of notorious and cheaper neighbourhoods you’ll get some interesting findings.

    The point I’m making is to question your use of “have to” in your last sentence. Why should housing and transport “have to” get cheaper simply because a lot of people are too snobby to live in areas where there are lots of faces that are a different colour to theirs, and therefore making travel to work distances longer and more expensive? Surely it’s more efficient (and just) to address the (perceived or otherwise) causes of an area’s (un)popularity for these median income families rather than subsidise mass transit and home ownership for the middle-class?

  3. ckstevenson Says:

    Having previously lived in Arlington, my wife previously in Alexandria, and now residing in Fairfax I can say that the take on the costs of housing and food in those areas is totally off base.

    Why does it cost so much here? Because people have really nice houses, and really nice stuff. People who take the metro to work still own $50k or more luxury cars that they drive on the weekends (or to the grocery store a mile or less away).

    Arlington, Alexandria and Fairfax have some of the most desirable houses in the area, possibly the country even. And are located ideally to DC.

    “How can we even imagine building an innovative, creative, and knowledge-based economy when housing and transportation costs eat up so much of household income?”

    Did Rich not notice when he lived here that DC already HAS and knowledge-based economy? DC doesn’t produce any tangible goods. We produce government, consulting and to a lesser extent biotechnology.

    We’re already in the knowledge economy, and we did so living in our enormously expensive houses.