High Transportation Costs Make a Lot of HUD Housing Unaffordable

"Affordable" housing units with excessively high transportation costs shown in red, and affordable transportation costs in yellow in the Atlanta area (left) and Detroit area (right). Map: University of Texas
Maps of Atlanta (left) and Detroit (right) show HUD rental units with high transportation costs in red and those with affordable transportation costs in yellow. Maps: University of Texas

Rental assistance from HUD isn’t enough to make the cost of living affordable when the subsidies go toward housing in car-dependent areas, according to a new study by researchers from the University of Texas and the University of Utah. The study evaluated transportation costs for more than 18,000 households that receive HUD rental subsidies, estimating that nearly half of recipients have to spend more than 15 percent of their household budgets on transportation.

HUD generally considers housing to be “affordable” if it consumes less than 30 percent of a family’s income. But that calculation doesn’t factor in the transportation costs that come along with different housing locations. A family that lives in a walkable neighborhood with good transit options will be less burdened with transportation costs — car payments, insurance, gas — than a family with the same income living in an area where they have to drive for every trip.

A broader picture of affordability comes from the “H+T index” popularized by the Center for Neighborhood Technology, which holds that if housing accounts for 30 percent of a household’s budget, transportation should not account for more than 15 percent to keep total costs affordable.

In the new study, researchers developed a model to determine how much households receiving HUD rental assistance have to spend on transportation in several cities. They found a great deal of variation across metro areas. In San Antonio, for example, only 13.5 percent of the housing units were in locations where transportation costs would consume less than 15 percent of household income, while in Los Angeles the figure was 97 percent.

Researchers looked at a broad sample of households receiving HUD rental assistance who had also completed the National Household Travel Survey, then modeled what they spend on transportation using estimates for the costs of car ownership and transit. They concluded that transportation costs exceed the affordability threshold for 48 percent of those households.

Among the cities with the highest share of rental assistance properties with high transportation costs are Houston, Phoenix, Atlanta, Cleveland, and Pittsburgh. “Not surprisingly, these and other metropolitan areas… are found to be among the most sprawling MSAs in the country by previous studies,” write authors Shima Hamidi and Reid Ewing.

The worst performers on transportation affordability are some of the most sprawling regions in the country. Chart: University of Texas
Regions where transportation costs make HUD housing unaffordable tend to be the most sprawling. Chart: University of Texas

The cities with the highest share of properties with affordable transportation costs included San Francisco, Los Angeles, Portland, New York, and Denver.

The cities with the lowest transportation burden. Chart: University of Texas
The cities with the lowest transportation burden. Chart: University of Texas

The researchers conclude that “HUD rental assistance programs, when they subsidize housing in sprawling auto-dependent areas, are not holistically affordable.” They suggest the agency could make better use of resources by directing rental assistance to transit-accessible locations.

  • Bicycle_Boy

    Many cities have a similar problem due to their zoning codes. In Waterville, ME, for example, the only area where new mobile homes are allowed is in the rural residential zone on the south side of the city, nearly two miles beyond the token bus route. Hence, it is impractical to live in this supposedly low priced housing without a car.

  • Brandon

    Few places in Metro Detroit which have affordable transportation are in decent neighborhoods. And the majority of job growth has occurred in transit inaccessible locations. Those working low wage retail jobs in the suburban locations need affordable housing as well. The major issue here is not that HUD is subsidizing houses in bad locations but that far too much of the jobs and housing is built in transit inaccessible area due partially to poor transit service but mostly due to sprawl inducing land use policies.

  • Brandon

    Put simply the problem isn’t where HUD is subsidizing housing its where the jobs are created that is the real problem.

  • EcoAdvocate

    I really hate that local and federal monies that are meant for affordable housing, and built in places that are in downtowns or otherwise have good access to public transit, where the developer is FORCED TO or CHOOSES to build large parking lots. Why is that housing money going to subsidize driving? You could get more housing for your buck if the developers were not building parking in TOD areas. Give people who don’t want/can’t afford a car better housing options near transit/in walkable areas. ()=

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