#167 Fall 2011 — Bank Accountability

Smart Can Be Affordable

Despite fears that rising prices follow smart growth projects, smart growth and affordable housing advocates need each other to realize the promise of each. 

Courtesy of Smart Growth America

The High Point Hope VI project in Seattle incorporates smart growth design to connect the development to its surrounding community.

Transportation

Smart growth strategies also reduce household transportation costs — the second-largest expense for most American households. In their search for more affordable housing, working families often move far from job centers and their place of work, dramatically increasing their transportation costs, commute times, and their environmental impact (see sidebar, next page). For many such families, transportation costs can exceed their cost of housing.

The Center for Neighborhood Technology (CNT) has studied this issue extensively on a national level. (See SF Spring 2011.) In 2006 CNT found that for every dollar a working family saves on housing, it spends 77 cents more on transportation. That same study found that on average, working families spend a staggering 57 percent of their incomes on the combined costs of housing and transportation, spending roughly 28 percent on housing and 29 percent on transportation.

When they live far from job centers, families are forced to drive farther between home, work, school, and stores. These neighborhoods are also less likely to have low-cost transportation options, and as more families in these areas are forced to drive long distances, traffic congestion becomes a recurring problem that can make long commutes even longer. Recent construction on Los Angeles’ 405 freeway created traffic congestion across the city. In a period of record-high gas prices, these long car trips can weigh heavily on household budgets.

Smart growth development, which builds densely and locates homes near shops, jobs, and schools, cuts down on how far families have to drive each day. It also provides low-cost alternatives to driving: Public transportation is perhaps the most significant of these, but dense, mixed-used development also makes walking and bicycling feasible options for daily trips. Transportation choices improve people’s ability to get around and provide a crucial lifeline to seniors, disabled individuals, those who cannot afford cars or car insurance, and anyone who chooses not to drive.

Redirecting Public Funds

Smart growth can also benefit towns and cities. Roads, sewers, fire departments, police, and ambulance services cost much more per taxpayer in low-density sprawl than in compact development. By making the most of existing infrastructure, smart growth can reduce costs for towns and cities and free up public funds for other projects. In many cases, smart growth also spurs wider economic growth and leads to higher density — both of which can increase public revenues and benefit municipalities even further.

Some municipal governments are using the higher real estate values associated with smart growth to build affordable housing — a strategy with triple-bottom-line benefits. Portland, Ore., for example, requires inclusion of affordable housing for new development around the city’s streetcar lines, leveraging its investment in the streetcars to create housing for low-income families, profits for developers, and increased tax revenues for the city.

OTHER ARTICLES IN THIS ISSUE

  • Smart at the Roots

    December 14, 2011

    Smart growth principles can’t be imposed from the outside.

  • Still Transforming Rental Assistance

    December 14, 2011

    HUD, in light of a recent capital needs study, will conduct a “rental assistance demonstration” rather than complete programmatic implementation of its Preserving, Enhancing, and Transforming Rental Assistance plan, which […]

  • Nicolas P. Retsinas

    December 14, 2011

    Nicolas P. Retsinas, a senior lecturer in real estate at the Harvard Business School and director emeritus of Harvard's Joint Center for Housing Studies, talks with Shelterforce about his long service in the housing field.