An article published by Housing Policy Debate titled “How Affordable is HUD Affordable Housing?” examines transportation costs for residents living in Section 8 multifamily properties. The study’s authors, Shima Hamidi, Reid Ewing, and John Renne, estimate that households in the typical Section 8 property spend slightly less than the recommended maximum 15% of their income on transportation. But in many areas transportation costs greatly exceed 15%, making the cost of living in such properties unaffordable.
The authors argue transportation should be a factor in determining the overall affordability of housing. They expand the definition of housing affordability from spending no more than 30% of household income on housing, to spending no more than 45% on housing and transportation combined. Affordable transportation is defined as spending no more than 15% of household income towards transportation.
The study analyzed a sample of 8,857 properties from HUD’s Section 8 Multifamily Housing program. Section 8 housing is affordable by conventional standards with tenants paying no more than 30% of their income towards housing costs. When the authors estimated transportation costs, 44% of the Section 8 properties became unaffordable.
Transportation costs vary significantly across the nation, with notable differences between sprawling, auto-oriented metropolitan areas and more compact, higher-density metropolitan areas. Costs ranged from $1,988 per year in a property in downtown Los Angeles, CA to $10,349 per year in a property in a distant location within the Wheeling, WV metro area. In 70 out of 322 metropolitan areas, all Section 8 properties sampled were deemed unaffordable when transportation costs were included. Even properties located the downtown areas of these metropolitan areas had high transportation costs. These areas included Jackson, MS, Las Vegas, NV, Memphis, TN, and Orlando, FL.
More compact cities were more affordable. Almost all sampled properties in Los Angeles (96.47%), 99.17% in Denver, and 100% in San Francisco were affordable. This does not negate the affordable housing shortage in these areas, but rather demonstrates the transportation affordability of the units already in existence.
This study does not suggest that rental assistance should be limited to denser metropolitan areas but underscores the potential for targeting housing subsidies to locations with better transportation options in sprawling metropolitan areas. The authors also suggest a transportation allowance similar to the current utility allowance be provided to low income households. They also recommend that transportation costs be used as a factor for determining Section 8 contract renewals. The authors do not address other issues beyond transportation costs with regard to the location of housing, such as quality of schools and other opportunities in the immediate vicinity, or the pressing need to stem the permanent loss of subsidized affordable housing.
How Affordable Is HUD Affordable Housing? is available at http://bit.ly/1SjUra8