Following up on a housing and transportation cost report released earlier this year, and reported on by CivSource, the Center for Housing Policy—the research affiliate of the National Housing Conference—and the Center for Neighborhood Technology has released a new report – Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation, which details the challenges that American households face as the combined costs of housing and transportation consume an ever-larger share of household incomes. For median income families, many are finding that covering the combined costs of housing and transportation accounts for over 50% of their total income and in some cases can account for more.

The combined costs of housing and transportation in the nation’s largest 25 metro areas have swelled by 44 percent since 2000 while incomes have remained stagnant and in some cases fallen. In the 25 largest metro areas, the report finds that moderate-income households spend an average of 59% of their income on housing and transportation. The report finds cost burdens to be highest in the Miami area, where moderate-income households spend 72% of their income on housing and transportation. The next highest burdens are in the Riverside-San Bernardino, Calif., area (69%), the Tampa area (66%), and the Los Angeles area (65%). For every dollar household incomes have gone up, housing and transportation costs have risen about $1.75, cutting into wealth, savings and even budgets for essentials.

Moderate income households for the purposes of this report are defined as households earning 50 to 100 percent of the median income of their metropolitan area. Cost burdens have increased for this group despite reductions in home sale prices caused by the major housing downturn that began in 2006. The picture is actually more positive in major metro areas such as Boston and Washington DC where the high cost of living is supported by equally high paying jobs, which has a neutralizing effect on overall costs. However, in some areas like San Diego, high housing and transportation costs are compounded by mostly lower wage jobs offered in the area. In the Philadelphia region, moderate-income households are faced with average housing and transportation costs exceeding 90% of income in some neighborhoods. Average combined cost burdens for moderate-income households in places like San Diego range from 63 to 69% of household income.

According to the authors of the report, factoring in transportation costs is critical, “the inclusion of transportation costs shifts the relative affordability of many metro areas. For example, housing costs in the Houston region are comparatively affordable for moderate-income households, ranking eighth out of the 25 regions examined, but adding in transportation costs drops Houston into 17th place in overall affordability. In contrast, metro areas such as San Francisco, Boston, and New York are some of the least affordable regions for moderate-income households when housing alone is considered, but are among the most affordable when housing and transportation costs are considered together,” they write.

A recent Brookings Institute report on transportation issues across the US notes that a broad based lack of access to lower cost public transportation options in many states is not only adding to the cost burden for many Americans but may be effectively keeping them from ever advancing. Limited mobility also has limiting effects on access to higher paying jobs or job training programs that may not be located immediately near where someone lives. In states with suburban growth patterns walking to work may simply be impossible. Data from that report showed that while access to some form of public transportation is available to 70% of Americans, only 30% of them can actually use it to get anywhere in a timely manner.

Owning a home may not be the benefit it once was either. For renters in the study the overall cost burden was an average 55% of income whereas those carrying a mortgage faced a cost burden of 72%. For both of these groups, however, the high percentage spent on transportation and shelter often means sacrifices have to be made on other essentials such as food.

“Increased demand for rental housing combined with insufficient new production has raised rents,” said Center for Housing Policy Executive Director Jeffrey Lubell, “while households with blemished credit and existing homeowners with underwater mortgages have been unable to take advantage of lower home prices. Add in the higher transportation costs associated with higher gas prices, stagnant or slowly growing wages and the loss of income associated with layoffs and it’s easy to see how Americans have lost ground.”

The full report is available here.