Money Magazine's "best places to live" cover story fails to take into account the cost of transportation.

Money magazine’s “100 Best Places to Live in America” is the most recent, high-profile example of how we need to re-think our definition of affordability when it comes to where we live. A quick scan of the communities that topped Money’s list suggests the magazine didn’t consider the cost of transportation in making their selections. Many of the places — suburban Minneapolis, suburban Baltimore, suburban Dallas, — are low-density, outer-ring suburbs that lack transit options and require households to drive most places and own several cars.

Like the Money article, many of us fall into the trap of thinking affordability boils down to the cost of our mortgage or rent payments. That encourages a “drive ‘til you qualify” mentality, where home-hunters pass over city neighborhoods or inner-ring suburbs and choose to live in outer-ring communities where housing is cheaper. However, these people soon learn that their new community is not as affordable as they thought, finding themselves stuck behind the wheel to get to work, school and the grocery store.

A true measure of affordability must take into account housing and transportation costs, which are the two biggest expenses for households. That’s why CNT developed the H+T Affordability Index. The innovative web tool allows users to see the average household housing and transportation costs by region and neighborhood.

Although transportation costs do not necessarily define a community, transportation costs certainly should not be ignored when determining the best place to live for one’s readers or one’s family. CNT staff read Money’s rankings and wondered: These places may rank highly among Money’s various criteria — jobs/economy, arts/leisure, health, education, and housing affordability — but what are families in these places paying for transportation? And, how do their costs compare with inner-ring suburbs or city neighborhoods that have residents with similar incomes?”

We crunched some numbers using our H+T^SM Index, and you can see what we found for Money’s top five places below. What’s clear is that people who move to these locations may find themselves needing more cars to drive everywhere they need to go, discovering too late that compact, transit-rich communities are often much more affordable when transportation costs are taken into account. There may in fact be better places to live than Money’s “best places,” at least from a true affordability perspective.

#1 Eden Prairie, Minnesota
The average household in Eden Prairie — Money’s best place to live — owns 1.7 cars, drives a little over 19,000 miles a year, and spends $897 per month on transportation costs. The average household in Edina, an inner-ring suburb of the Twin Cities, owns slightly fewer cars (1.6), drives nearly 4,000 fewer miles a year (15,057), and saves about $90 a month ($810) on transportation costs compared to Eden Prairie. A slightly greater percentage of Edina households take public transit for their commutes: 7 percent versus 5 percent in Eden Prairie.

Get even closer to downtown, in Minneapolis’ Prospect Park neighborhood, where household incomes roughly match Eden Prairie’s, and the average household owns 1.4 cars, drives 11,679 miles a year, and spends $709 per month on transportation. Sixteen percent of households in Prospect Park get to work by public transit. Compared with Eden Prairie’s average household, the average Prospect Park household spends $188 less per month on transportation and saves $2,256 a year.

#2 Ellicott City, Maryland
Located 21 miles west of Baltimore, the average household in Ellicott City owns 1.6 cars, drives 20,816 miles a year, and spends $890 per month on transportation costs. By comparison, in Towson, a suburb nearer downtown Baltimore, the average household owns the same number of cars but drives 6,000 miles less per year (14,739) than the Ellicott City family. The Towson household spends $781 in monthly transportation costs.

The average household in Baltimore’s Guilford neighborhood owns 1.4 cars, drives 13,956 miles a year, and spends $736 per month on transportation costs. The Guilford household has an extra $154 per month ($1,848 annually) freed up to save or pay for other expenses.

More households in Guilford take public transit to work than those outside the city. Only 3 percent of households in Ellicott City commute via transit, 6 percent take transit in Towson, while 16 percent of households in Guilford leave their car at home when heading to work.

#3 Newton, Massachusetts
The average household in Newton — an inner-ring suburb of Boston served by light rail, commuter rail and bus — owns 1.6 cars, drives 15,656 miles a year, and spends $805 per month on transportation costs. The average household in Back Bay, a Boston neighborhood, owns less than one car (.8), drives less than 7,466 miles annually, and spends $442 per month on transportation. Eleven percent of families in Newton take transit to work, while 42 percent of those in Back Bay take the “T” or the bus. The average Back Bay household spends $363 less on monthly transportation costs than the Newton household, adding up to $4,356 in annual savings.

#4 Bellevue, Washington
The average Bellevue household owns 1.8 cars, drives 15,220 miles a year, and spends $910 per month on transportation costs. Across Lake Washington in Seattle’s Capitol Hill neighborhood, the average household owns 1.6 cars, drives 10,090 miles per year, and spends $788 per month on transportation. Twenty-one percent of Capitol Hill households commute by transit, while only 10 percent of Bellevue households do. The Capitol Hill household also spends $122 less on transportation than the Bellevue family, saving $1,464 a year.

#5 McKinney, Texas
The average household in McKinney, 30 miles north of Dallas, owns 1.7 cars, drives nearly 21,600 miles a year, and spends $908 a month on transportation. In Richardson, a suburb roughly halfway between McKinney and Dallas, the average household owns slightly few cars (1.6) but drives significantly less each year (14,811 miles), and spends $793 per month on transportation costs.

Meanwhile, in Dallas’ Historic District, the average household owns 1.2 cars, drives less than 9,700 miles per year, and spends $600 per month on transportation. The Historic District household saves $308 per month or nearly $3,700 annually on transportation compared with the McKinney household.

Only 3 percent of McKinney households commute using transit, 5 percent in Richardson, and 20 percent of those in the Historic District leave their cars at home when they head to work.

To learn more about the affordability of your neighborhood, go to htaindex.org.

A partnership between HUD, DOT, EPA. Secretaries Shaun Donovan, Ray LaHood, Lisa Jackson, respectively. Photo: EPA

The U.S. Senate Banking Committee, chaired by Sen. Christopher Dodd (D-Conn.), approved the Livable Communities Act on August 3. The legislation would create an Office of Sustainable Housing and Communities to encourage comprehensive regional planning and sustainable development by breaking down federal agency and department barriers.

The Livable Communities Act would strengthen communities and increase housing affordability for families by encouraging sustainable development. Grant money made available through the legislation, for instance, would fund projects that prioritize vibrant downtown business districts within walking distance of homes and transit stops, brownfield redevelopment in struggling industrial areas, and public transit options to reduce household transportation costs—the second highest expense for Americans after housing.

The Office of Sustainable Housing and Communities would oversee two grant programs established by the Livable Communities Act. One grant program would make $2.2 billion available for communities to build and improve affordable housing, strengthen public transportation, promote transit-oriented development, and redevelop brownfield sites. A second grant program would provide $500 million to support comprehensive regional planning that recognizes the interconnectedness of transportation, housing, community and economic development and environmental sustainability.

The full Senate will likely debate the Livable Communities Act in the fall. The U.S. House of Representatives has introduced a companion bill and will likely debate it later this year as well.

The Livable Communities Act both needs and deserves your support!

You can download this letter and fill in the relevant blanks to let your Senators and Representatives know that you support passage of the Livable Communities Act.

Find your Senators and Representatives. 

The theory behind the bill is simple: Housing costs do not end when we sign our rent or mortgage checks. Where we live has other costs associated with getting around: to work, to school, to the grocery store. How much that costs depends on where we live and what options are available to move us from point A to point B.

Given that reality, a true measure of affordability must take into account housing and transportation costs. In 2006, CNT launched the H + T Affordability Index^SM, a web tool that gives a more accurate assessment of affordability by providing homeowners and policy makers the housing and transportation costs for a community.

Just as families need to have the best information before they choose where to live, our state policy makers should have the best information as they invest scarce public resources in housing. With the H + T Index tool signed into law, public officials in five key state agencies will now have the best available tool to guide their investment decisions toward those that will truly reduce the cost of living for working families.

This legislation also positions Illinois as a national leader, making it the first state to create legislation that links housing and transportation affordability to reduce the cost of living for our households. New national priorities that link transportation and housing affordability to the disbursement of federal funds will make Illinois well-positioned to compete for those dollars.

CNT views this as just the beginning. We will work with the five state agencies, including the Illinois Dept. of Transportation and the Illinois Housing Development Authority, to make certain the Housing + Transportation Affordability Index Act will help create better and more affordable housing and transportation well into the future.

While I-GO had the keys to the i-MiEV, we invited political leaders, funders and journalists out to preview the car and take it for a spin. Check out who took it for a spin here. Chicago Sun-Times and Chicago Tribune transportation reporters Mary Wisniewski and Jon Hilkevitch recently wrote about I-GO and their impressions of the i-MiEV here and here.

I-GO shared the car with its members as well. I-G0 members were invited to preview the i-MiEV on July 27, at I-GO’s Wicker Park office. Over 25 members came by our office to meet the i-MiEV.

CNT founded I-GO in 2002. As an environmentally driven non-profit, I-GO is working to catalyze a set of transportation innovations that make it feasible and desirable for Chicago residents to get around conveniently and economically without having to own a car. At the same time, I-GO membership helps reduce driving and cuts global warming emissions. Adding electric vehicles to its fleet makes the already-green I-GO that much greener.

Abogo measures the money a typical household, living in a given neighborhood, would spend getting around– including car ownership, car use, and transit use. It also provides the carbon emissions associated with using a car. CNT developed Abogo so that individuals can now measure the true cost and impact of where they live in 337 metropolitan areas in the U.S., in the same way that planners and municipalities have been using the H + T Index to better understand the combined costs of housing and transportation at the regional level, for example.

CNT partnered with the Urban Land Institute and Center for Housing Policy in 2009 to develop the Terwilliger Housing + Transportation Calculators for Washington, D.C., Boston and San Francisco, where consumers can access up-to-date cost data to make informed housing decisions.

Over the next few months, CNT will be refining these tools to help individuals factor in transportation costs when considering how much it costs to live in a particular city. We’re working to calculate better estimates based on the way someone lives now—and to provide information that helps individuals and households make small changes in the way they get around—while saving money and helping to reduce climate impact at the same time.

TRY OUT THE NEW ABOGO TOOL!

As we further refine the calculator, we’re looking for impressions and ideas how to make it most useful. Feel free to send comments to abogo-info@cnt.org. We have also developed an API, so if you’re interested in getting transportation cost information on your website, see here.

This map shows that cities produces less GHG's, per capita, than areas that require more Vehicle Miles Traveled (VMT).

CNT, through our partnership with the Center for Transit-Oriented Development (CTOD), has released, “Transit-Oriented Development and the Potential for VMT-related Greenhouse Gas Emissions Reduction.” This report provides a quantitative analysis of potential greenhouse gas reductions of transit-oriented development from the transport sector.

The research, led by CNT, finds that by living in a central city near transit, the average household can reduce its transportation-related greenhouse gas emissions by 43 percent. The number increases when living near the most location efficient transit zones, which can result in a 78 percent emission reduction.

“This research shows that, in a nutshell, location does indeed matter,” said Scott Bernstein, President of CNT. “Individuals and families that live near transit centers own fewer automobiles, drive fewer miles, and leave a much smaller carbon footprint than those who don’t.”

The report was funded through CTOD’s cooperative agreement with the Federal Transit Administration, and provides more evidence of transit’s role in building economically and environmentally sustainable communities across the country.

“We’ve long known that living near transit can help reduce greenhouse gas emissions,” said Sam Zimbabwe, Director of the Center for Transit-Oriented Development. “This is an important milestone in helping to quantify those reductions, and we hope something that can influence policy and implementation of sustainable communities served by high-quality transit options.”

As a follow-up to the report, CTOD will be working on a toolkit to help communities quantify their emissions reductions and proactively put in place strategies to reduce their carbon footprint, as well as more detailed regional analysis in several other regions around the country.

Download “Transit-Oriented Development and The Potential for VMT-related Greenhouse Gas Emissions Reduction.” (.pdf 5MB)

As we approach the Arch’s 50th anniversary, the “Framing a Modern Masterpiece” competition, coupled with federal dollars, makes improving access to the park and revitalizing St. Louis’s downtown more than just a dream. The competition to properly frame this national masterpiece is underway, and one of the five final proposals got our attention.  City To River aims to turn the Arch grounds into a version of Millennium Park and the highway into a boulevard resembling Michigan Avenue. According to Kevin Muesenfechter of City To River, “The boulevard would allow for easier pedestrian access between the riverfront and downtown, and it would allow for the redevelopment of land along the boulevard that could spark an estimated $1.1 billion in investment over the next 20 years.”

This proposal emphasizes walkability and smart growth to revive downtown St. Louis by turning a highway into a boulevard, an action CNT has strongly supported in the past. For more information on the proposals for the park still in the running, visit the “Framing a Modern Masterpiece” website.

At the recent 18th Congress for New Urbanism, U.S. Housing and Urban Development Secretary Shaun Donovan made a tremendous declaration: “For the first time in the history of federal grant competitions, I want to announce today that HUD will be using location efficiency to score our grant applications”.

The energy in the room was tangible. “We’re breaking down silos”, Donovan asserted, and indeed, this commitment from HUD to weight grant applications with spatial context in mind will advance the comprehensive approach to community development that CNU, CNT and other smart growth advocates have urged for years.

Over the past year, HUD has taken on an impressive task of touring cities, meeting and listening—“from mayors and other officials of both small and large communities, to business leaders in growing regions, to governors of states that have been hit hard economically”—to design and tailor a program that reflects what communities want, with the ability to apply context-sensitive solutions that work for each community. And CNT believes that the outcome and the subsequent announcement by Donovan show a real commitment to developing tools and resources that will help regions become strong economic engines—with healthy communities and reduced household expenses.

“Today, the average household spends more than half of its budget on housing and transportation. They have become American families’ two single biggest expenses”, said Donovan, affirming the findings of CNT’s H+T Index, which shows only two in five American communities—or 39 percent—are affordable for typical households when their transportation costs are considered along with housing costs.

CNT was an early developer of “location efficiency” and used the concept to design the Location Efficient Mortgage® (LEM), along with the Natural Resources Defense Council and the Surface Transportation Policy Project. When elements like compact neighborhoods with interconnected street networks, access to transit, mixed land uses, and concentration of retail and services are brought together, an efficiency of scale can be achieved that reduces the dependence on and the intensity of driving, freeing up more money for housing and other household expenses.

While the concept of energy efficiency has been more well-known and even celebrated, CNT has been a long proponent of the efficiency of locations. In 2008, CNT President Scott Bernstein testified in front of the House Financial Services Committee in support of the proposed “Green Resources for Energy Efficient Neighborhoods (G.R.E.E.N.) Act” by U.S. Rep. Ed Perlmutter (D-CO), arguing that it was a great start in providing incentives to homeowners in becoming more efficient, but that it should not overlook the importance of the ˜location” of a home when determining its efficiency.

These significant investments that HUD will make into planning sustainably complement recent investments by DOT through the TIGER program and the broad goals of the Partnership for Livable Communities to make policy and funding decisions in concert. As Secretary Donovan pointed out, “…it’s time that federal dollars stopped encouraging sprawl and started lowering the barriers to the kind of sustainable development our country needs and our communities want.”

“Secretary Donovan has made exactly the right move at the right time. This is the strongest evidence yet that the Obama administration is doing what it says it would do”, notes Scott Bernstein.

Shaun Donovan’s remarks at the CNU Conference came just two weeks after HUD released its 5-year strategic plan, deeming it a “new direction for HUD”. The 5 points that the plan outlines were implicit in the direction and goals that he stated at CNU. And the agency is already taking on a united front with this message. At the recent National Alliance of Community Economic Development Associations, Deputy Director Ron Sims, in his keynote on institutionalizing policy focused on sustainability, affirmed, “Sustainability is not the exclusive domain of the rich; it has to be for everyone.”

A message that CNT supports entirely. We are looking forward to similar commitments from other federal agencies—namely USDOT and USEPA—as well as state and local governments across the country.

Read Secretary Donovan’s remarks at the 18th CNU.

Read more on location efficiency on our website, including related testimonies and reports.

(Photo by James Hamilton, Shaun Donovan in 2007)

Senator Kwame Raoul led the effort to pass the Housing + Transportation Affordability Index Act (SB 347) in the Illinois Senate last month, and on Tuesday the bill passed in the House with overwhelming bipartisan support, led by Representative Barbara Flynn Currie, Chief Sponsor, and seven co-sponsors from both sides of the aisle.

CNT has been working with Illinois legislators since early 2009 to advance this valuable piece of legislation that applies CNT’s framework of combining housing and transportation costs to planning and making public investment decisions.

Used as a planning tool, the H + T Affordability Index^SM can effectively measure the impacts on household budgets that result from public investments, so that decision makers can choose investments that make sense for our taxpayer dollars as well as for our individual wallets.

Five state agencies participated in the development of this legislation that will provide better access to the costs of both housing and transportation. Having a tool to use as a benchmark will give these agencies the ability to screen how investment decisions will impact the cost of living for residents in metro areas.

The Department of Commerce and Economic Opportunity (DCEO), the Department of Transportation (IDOT) and the Illinois Housing Development Authority (IHDA) can use CNT’s H+T Affordability Index, or a similar measure that includes both housing and transportation costs, to screen and prioritize public investments in MPO areas. In addition, the Capital Development Board (CDB) and the Illinois Finance Authority (IFA) will recommend the use of the Index for new siting decisions.

By encouraging public investments that take advantage of existing areas of greater density, which all communities have, the State is taking initial steps that contribute to lowering the cost of living for families.

Illinois has the opportunity to set a valuable example to other states for how the use of combined housing and transportation data can move regions towards decisions that create more sustainable and equitable growth. While the Partnership for Livable Communities is driving Federal priorities to coordinate housing, transportation and environmental investments, Illinois is leading the states by example to create better and more affordable places to live and work.

CNT joins state leaders to now urge Governor Quinn to sign the Housing + Transportation Affordability Act into law with no delay.

The report, produced in partnership with the Center for Housing Policy (CHP) and CNT, provides a comprehensive analysis of the “cost of place” in 18 regions from southern New Hampshire to Worcester to Rhode Island by quantifying the burdens facing families in those regions to meet the number one and number two expenses – housing and transportation – and highlighting areas with extreme burdens where households spend more than 58% their income on these costs.

The combined costs of housing and transportation vary among the 18 regions examined, ranging from 48 percent of household income in MetroWest to 62 percent in the South Coast. The report finds that one in four households in the study area are located in neighborhoods in which there are extreme cost burdens. In Boston, the cost is 56 percent, due in part to the City’s extensive public transportation system. In fact, Boston had the lowest transportation cost of all the regions studied in the report.

“Within the Boston region, there are pockets where housing is affordable but transportation offsets those lower costs. Many people in the workforce—teachers, nurses, office workers—are forced to spend precious time and money commuting from the homes they can afford to the places where they work,” said ULI Terwilliger Center Chairman J. Ronald Terwilliger. “These findings reinforce that years of ever-sprawling development have resulted in a growing gap between where people live and where they work.” Terwilliger, Chairman Emeritus of Trammell Crow Residential, founded the Center in 2007 to help achieve a measurable increase in the supply of workforce housing in high-cost markets throughout the nation.

CNT’s Scott Bernstein joined J. Ronald Terwilliger, Boston Mayor Thomas M. Menino and New England Regional HUD Director Richard Walega at the April 12 press conference in the Great Hall at Faneuil Hall to announce the report and its companion Web site, www.BostonRegionalChallenge.org. In addition, they unveiled a new online Cost Calculator that families can use to accurately determine their combined housing and transportation costs based on where they live, where they work and how they commute.

“No longer will the true cost of a house be hidden in the Boston Area,” says Scott Bernstein, CNT President. “This calculator gives consumers an insurance policy against the rising and chaotic costs for transportation and fuel. It will help home seekers, both owners and renters, know what it’s worth to take advantage of the region’s mass transportation and local amenities, and in the process, avoid locations that are too financially risky.”

And the implications are not unique to just the Boston region. The findings show that whenever housing is not efficiently located to jobs, stores, schools and other amenities, household transportation expenses soar above the recommended 18% of one’s income. CNT’s Housing + Transportation Affordability Index currently displays this trend for over 80% of the population – 337 metropolitan areas in the U.S.

The release of the report was in conjunction with the ULI Real Estate Summit at the Spring Council Forum this week in Boston. The need to build workforce housing closer to employment centers is among many issues being discussed as part of ULI’s overall efforts to promote sustainable communities.