The Cost of Housing

Two things have come my way today on transportation costs as a component of housing.  And the way the two have of offsetting each other.  Cheaper housing: higher transport costs.
Katie Hyslop writes in the Tyee about a way to encourage the integration of affordable housing and transit. The 30/30/30 plan, among other things, calls  for municipalities to zone land near transit for a minimum percentage of affordable housing. And “transit” here means both rail and express bus.

It’s called the 30/30/30 plan for short, and it works like this: the feds foot 30 per cent of the bill for a major transit project on the condition that the municipalities involved agree to pre-zone everything within a kilometre of the project to require that 30 per cent of all new housing units built there cost no more than 30 per cent of the region’s median income to occupy….

…. The goal is to align housing and transit together, said New Westminster Mayor Jonathan Coté, one of the people behind the idea. “I don’t think you can talk about affordable housing unless you’re also talking about transportation. For most households, transportation is the second biggest cost that we have,” said Coté, right after housing itself.
“Given that they’re both significant priorities of the new federal government,” Coté added, “I actually think that there might be some uptake, once we’ve done a bit of our legwork to advance the idea.”

Meanwhile, Todd Litman of the VTPI writes in Planetizen in detail about the relationship between housing costs and transportation costs in the USA, in very broad terms. As part of an ongoing debate with Wendell Cox, Mr. Litman refers to a recent Urban Institute presentation by Jason Furman, Chair of the White House Council of Economic Advisers.  He summarizes as follows:

Furman’s presentation clearly indicates that zoning codes that discourage urban infill (e.g., minimum lot size, restrictions on building density and height, limits on multi-family housing, minimum parking requirements, and excessive development fees) are the primary factor driving up housing prices and reducing affordability in economically successful cities….
. . . [Furman] cites Edward L. Glaeser and Bruce A. Ward’s study, The Causes And Consequences Of Land Use Regulation: Evidence From Greater Boston, which shows that there is no overall shortage of urban land. Rather, housing prices are driven up by restrictions on infill in attractive cities and suburbs. Furman also points out that changing consumer preferences are shifting demand toward more compact housing types and more multi-modal neighborhoods.

In particular, Mr. Litman presents data combining housing and transportation costs for various US cities — some sprawled, some not.  Clearly, transportation is around 30% of the combined costs. Accordingly, Mr. Litman continues to advocate for Smart Growth policies.

Smart Growth development policies are proven to provide several significant benefits including open space preservation, public infrastructure, and service cost efficiencies, increased accessibility, and modal diversity, which reduces transport costs and increases independence and economic opportunity for non-drivers, reduced chauffeuring burdens imposed on drivers, more affordable housing options (townhouses, apartments, accessory units, etc.), increased traffic safety, improved fitness and health, increased economic productivity, and reduced per capita fuel consumption and pollution emissions.