How Do We Define Affordable Housing? | Hacker News Reader

How Do We Define Affordable Housing?

strongtowns.org

23 pointsDoreenMichele13 comments

It seems fairly obvious that the solution is to allow denser construction in the city cores, as well as allowing smaller residences to be built (such as dormitories at the lower end).

There is also a very strong, but potentially unpalatable, correlation between driveable cities and highly affordable housing. Something having to do with supply and demand.

What is your take on the article's claim that one has to consider the cost of transportation in addition to the housing? The article suggests that some city's low housing costs are offset by the transportation costs require to get around.

A personal automobile is the single most expensive form of transportation (except for a private jet, of course) on a per mile basis. Reasons around palatability (it's also the most dangerous form of transportation) aside, it doesn't matter how "affordable" housing is in a driving-only neighborhood when you're talking about people who don't have enough money to afford a car in the first place.

Let's do some napkin math and put these assertions to the test.

Average rent for a 1 bedroom apartment in Seattle, WA is $1869 a month [1]. A PugetPass costs about $80 a month. Living in Seattle without a car costs $1949 a month, or $23.4k a year.

Average rent for a 1 bedroom apartment in St. Louis, MO is $817 a month [2]. A decent used car that will last at least four years before needing maintenance costs a total of $4000, or an average of $83 a month. The national average for car insurance is $815 a year [3] (Missouri's is even lower), coming out to $68 a month. Now let's assume your used car gets a modest 25MPG, gas costs $3.00 a gallon, and your work is 15 miles away, plus you drive 20 miles on weekends. That's $82 a month in gas. Living with a car in St. Louis costs $1050 a month, or $12.6k a year.

Living with a car in a driveable city is $900/month and $10.8k/year cheaper than living in a non-driveable city. By this metric, non-driveable cities have housing that is 85% more expensive.

[1] https://www.rentcafe.com/average-rent-market-trends/us/wa/se...

[2] https://www.rentcafe.com/average-rent-market-trends/us/mo/sa...

[3] https://www.thesimpledollar.com/how-much-does-car-insurance-...

This is going to depend a lot on which non-drivable city you choose. I thought Seattle was particularly expensive?

I lived in Montreal and paid C$675 / month for a 1 bedroom apartment 5 minutes from a metro station and another C$79 per month for monthly STM pass. Throw in a few trips outside the city with a rental car and we're still under C$10k.

Montreal seems to be an outlier according to

https://www.theglobeandmail.com/news/national/how-does-montr...

There are also much cheaper driveable cities (e.g. Knoxville, TN) and much more expensive non-driveable cities (e.g. San Francisco, CA). Also, more realistically, you would probably be commuting to the city center if you were driving. Rent in the suburb of Florissant, MO is only $618 a month [1]. And the average gas price in St. Louis is only $2.28 a gallon [2], and insurance in Missouri costs an average of only $57 a month [3].

That brings the cost of housing down to $820 a month or $9.8k a year. I'm sure you could get a cheaper and more reliable car as well.

[1] https://www.rentcafe.com/average-rent-market-trends/us/mo/fl...

[2] https://www.gasbuddy.com/USA/MO

[3] https://www.thesimpledollar.com/how-much-does-car-insurance-...

Median household income in Saint Louis is roughly $60k.

Median household income in Seattle is roughly $80k.

Even after taxes, you'll have more money leftover after rent & transportation without a car in a city like Seattle than you will after rent & transportation in a car-oriented town like St Louis.

$60k a year in St. Louis dollars translates to $94k a year in Seattle dollars. So that assertion is false.

https://www.nerdwallet.com/cost-of-living-calculator/compare...

That calculator explicitly assumes a car-oriented existence in both places. Taking their 157% factor at face value, $10.8k for a car in St Louis is $17k in Seattle. So $80k without a car is equivalent to $97k with a car. Or $60k with a car is equivalent to $49.2k without a car in Saint Louis. Either way, the income level in Seattle is slightly better.

In decent mid-large cities, there's no need to own a car. You can often walk, much of the time. For travel, you rent a car if necessary.

https://www.iconbuild.com/new-story/ is building houses within $4000 - $10000 with 3D printing

The first figure, the bar chart based on the BLS Consumer Expenditure Survey shows almost the same expenditures in Atlanta, Georgia and Los Angeles, California, with somewhat higher overall expenditures in Atlanta and somewhat lower housing expenditures relative to transportation in Atlanta.

However, Zillow gives a median home value of about $220,000 in Atlanta: https://www.zillow.com/atlanta-ga/home-values/

Median list price per square foot is $219

Median home list price is $310,000

Zillow gives a median home value of about $663,000 in Los Angeles: https://www.zillow.com/los-angeles-ca/home-values/

Median list price per square foot is $478/sq foot in Los Angeles

Median list price of homes is $750,000

That is a radical difference in housing prices that does not seem to show up in the figure in the article. Presumably salaries and budgets are proportionately lower in Atlanta than Los Angeles.

Is this really an accurate and adequate explanation? I know people who have moved from Atlanta where they could afford a house and had to downsize to a smaller apartment in the San Francisco Bay Area which is somewhat more expensive than Los Angeles, but in the same ballpark.

Is Los Angeles really more affordable than Atlanta?

[ADDED]

The US Census reports:

Fulton County, GA (Atlanta area)

Median Household Income (2012-16): $58,851

Per capita income for past 12 months (2012-16): $39,101

https://www.census.gov/quickfacts/fact/table/fultoncountygeo...

Los Angeles County, CA

Median Household Income (2012-16): $57,952

Per capita income for past 12 months (2012-16): $29,301

https://www.census.gov/quickfacts/fact/table/losangelescount...

Note that Fulton County, GA (Atlanta) has a higher median household income than Los Angeles County, and much lower median home prices according to Zillow.

It is unclear what the consumer expenditure report is computing. It may be the percentage of total expenditures NOT INCLUDING SAVINGS AND TAXES, rather than gross income:

https://www.bls.gov/opub/hom/cex/calculation.htm

Hence people in Atlanta may be saving more but spending a similar percentage of TOTAL EXPENDITURES to people in Los Angeles.

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