Live at the Forum: The Impacts of High Housing and Transportation Costs in the San Francisco Bay Area

Replies to This Discussion

Permalink Reply by Rebecca Cohen on November 19, 2009 at 9:09am

How do you define working families in the report? How are extreme housing and transportation costs burden defined and how did you pick that percentage?

Permalink Reply by Keith Wardrip on November 19, 2009 at 2:47pm

Unlike in A Heavy Load, an earlier report of the same ilk, we didn't focus on working families in Bay Area Burden. Instead, we looked at the housing and transportation costs of all households.

We defined an extreme housing and transportation cost burden as one that met or exceeded 65% of annual household income. We chose that percentage because 1/4 of the neighborhoods in the Bay Area met this criterion. By focusing on this subset of neighborhoods, we could look at geographic patterns of cost burden and identify where the most burdened neighborhoods in the Bay Area were located. To tie the two parts of your question together, we did find that neighborhoods with the most extreme H+T cost burdens earned roughly 50-70% of Area Median Income - a level that is consistent with the bottom of most definitions of "working families."

Permalink Reply by HousingPolicy.org team on November 19, 2009 at 1:57pm

Why didn’t you look at counties outside the 9-county Bay Area as part of your report? How was the study area chosen?

Permalink Reply by Peter Haas on November 19, 2009 at 2:45pm

The nine county area is commonly used to define the San Francisco Bay Region. This geography is used by many of the regional planning organizations (including MTC and ABAG) for regional planning. Therefore, we used this regional definition for our study.

Permalink Reply by Kent Watkins on November 19, 2009 at 3:00pm

Hi Peter, I just met with Bob Haas at the Levi Strauss bldg. Are you any relation?
This week, I am in San Francisco looking at current TOD/JD sites (Fruitvale, West Oakland, etc.) for a 3-year TOD process contract with the San Diego Housing Commission and also for the Marin Co. Housing Authority. My thanks to Aila Anderson, Re-connecting America for a helpful lunch in terms of pointing out some of the State initiatives. Several questions:
1. Given the 20% home to job costs of total transportation costs, and given the SMART economics of ridership in Marin/Sonoma, I would find it difficult to justify to Marin Co. Housing Investment Trust in terms of spending their money when the lower part of the SMART line will end at Larkspur Landing sometime after 2014. Is the other 80% not possible to ameliorate much unless you also co-locate the schools, recreation, shops, etc. around the same stations?
2. I was under the impression that the Prop 1-C monies were all obligated. Your report doesn't indicate that. I hope you are right...as San Diego would like to still get in on that.
3. You mention the MTC res. 3434 MTC planning grants, but places like Larkspur are not going to apply for it (vs. San Rafael), yet they are 'required' under the housing element for the county to 'make up' a deficit of 762 affordable housing units. No teeth problem.
4. You don't mention carbon emissions (Senate Bill 375) as being another important part of the triad. Is there a way to factor this into the index or does that begin to miss the focus of the family costs...

thanks,
Kent Watkins
646 234 3545

Permalink Reply by Peter Haas on November 19, 2009 at 3:31pm

First of all I do have a cousin Bob, but he is in Cleveland, and works on wind and natural gas energy issues, so I am not sure this was him. The Haas family that is involved with Levi Strauss is not my branch of the Haas name! ;-)

I can address questions 1 and 4...

1) In terms of optimizing a household's transportation expenditure, and while I am not familiar enough with the issues in Marin/Sonoma Counties with regard to the SMART line, I do agree that by focusing only on journey to work will lead to some undo transportation burdens. Since the journey to work is only 20%-40% of the typical household's transportation cost, the other 60%-80% percent should be examined closely. So, developing housing in a mixed use community with access to transit, and having a walkable environment is the way to optimize household's transportation costs. Therefore, if the line only connects these communities with regional job centers, and housing is being developed in the more remote locations, that will not necessarily reduce the households' overall transportation burden.

4) We have looked at the amount the greenhouse gas (GHG) emission from household travel and find that location efficient communities provide the environment necessary to lower households' auto related emissions. On our national web site - http://htaindex.cnt.org - the user can choose to see that households in compact efficient communities have lower GHG impacts.

Permalink Reply by Kent Watkins on November 19, 2009 at 3:50pm

Thanks, Peter, for your replies.

Permalink Reply by Keith Wardrip on November 19, 2009 at 3:35pm

Kent, regarding #2 above, I know that a round of Prop 1C funding was announced as recently as July 2009, but I'm unclear on whether additional funding is available. You can write infill@hcd.ca.gov to get more information directly from the California Department of Housing and Community Development.

Regarding #3, I'm not sure that I completely follow your question. MTC planning grants are intended to help communities plan for developing affordable housing around transit. The goal is to ensure that areas seeking transit investments have sufficient residential density to support such investments. Although resolution 3434 does not have the ability to change local land-use or zoning policies, it does represent a pretty significant incentive for such local action.

Permalink Reply by Kent Watkins on November 19, 2009 at 3:49pm

Thanks, Keith. Re #3, I was probably conflating two strings of thought but they are related to some extent, like a cat's cradle. The MTC grants, as I understand them, are voluntary for the locals to apply, and the ones that are not doing so are frequently the ones who also have 'resisted' meeting the housing requirements under another 'regulatory' item - the housing element. So, the carrot is there, and I am glad for it, but cities like San Rafael will take advantage of it, and not Larkspur. Not a unique story, of course. I was just wondering about enforcement issues, while at the same time congratulating MTC for a step in the right direction of providing additional planning funds.

Permalink Reply by Ryan Sherriff on November 19, 2009 at 3:00pm

What are the key similarities and differences between the housing & transportation cost trends in the DC Area (as discussed in your previous publication, Beltway Burden) and the Bay Area?

Permalink Reply by Keith Wardrip on November 19, 2009 at 3:18pm

For starters, both metro areas have extensive public transit systems. As a result, overall transportation costs were very similar in DC ($13,234) and the Bay Area ($13,375) and represented about the same level of household income (18% and 20%, respectively). However, Bay Area housing costs were about $5000 higher per year than were housing costs in DC. The result is that H+T costs in DC consumed roughly 48% of income, whereas they combined for 59% of income in the Bay Area.

I think another big-picture similarity is that both metros are characterized, to one extent or another, by both (a) low-income areas with low housing and transportation costs that burden their residents nonetheless and (b) areas on the periphery where housing costs are less expensive but transportation costs can be onerous. The geographic distribution of these areas differ between DC and the Bay Area, partly because the latter region is more multi-nodal than the former (i.e., there are several large cities where jobs and low-cost housing are concentrated in the Bay Area).

Permalink Reply by Rick Rybeck on November 19, 2009 at 3:55pm

The housing-transportation burden is complicated by a perverse effect of transportation infrastructure development. When infrastructure is created (roads or transit), the land best-served by that infrastructure (near an interchange or transit station) goes up in value -- often chasing away the very development that it seeks to facilitate. Affordable development then seeks a remote cornfield instead of the lot adjacent to the infrastructure. Although capacity exists at the initial location, the new development is poorly served and roads must be widened (or transit extended) at great expense to service the new development. When completed, the cycle starts over again. Basically, infrastructure ends up chasing affordable development away and never catches up. However, some jurisdictions have implemented a property tax reform that reduces the tax rate on buildings -- making them more affordable -- while increasing the rate on land -- making it more affordable also. (NOTE: Because land is fixed in supply, the tax on land is not a cost of production (which would cause the price to rise) but a cost of ownership -- which reduces the benefits of owning land and thereby creates downward pressure on land prices.) This type of tax reform could draw development to high-value land near interchanges and transit stations, thereby making better use of existing infrastructure and facilitating the development of TOD that enhances the efficiency of walking, biking and transit. Are you familiar with this reform? If so, do you think it has potential?

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