Housing + Transportation Costs

Coordination of land use and transportation planning is essential to improve quality of life. This web site is a resource to assist local governments in using important performance measures to quantify progress in achieving community planning goals and objectives. A number of planning and research documents are provided. Information in these can help to maximize community improvement by focusing on economic efficiency, social cohesion, imageability, and environmental protection.

 

The chart below depicts information from U.S. Consumer Expenditure Surveys (CES) against per capita personal income/vehicle miles traveled ratio (PCPI/PCVMT) over time.  PCPI/PCVMT is a key metric of community resiliency or the ability to withstand economic downturns.  As background, the first CES in 1901 showed expenditures in the following proportions: food 46%; housing 24%; and transportation 2%. The total is almost 73%, the bulk of consumer expenditures. The total has dropped to a fairly consistent level between 63%-65% from 1984-2012.  In part, this is due to expenditures on food dropping dramatically to 35% in 1935, 26% in 1960, and to between 13%-15% from 1984-2012.  At first glance it might seem as if consumers are better off.

 

However, the proportion of expenditures on housing increased to 33% by 1935 and has remained near that level since at least 1972.  Strikingly, transportation expenditures increased to about 9% in 1935, 15% in 1960, and has varied mostly between 18%-20% since 1972.  Consequently, housing plus transportation expenditures increased from about 26% in 1901 to between 49%-52% since 1972.  The bulk of spending formerly allocated to food and nutrition is now dedicated to travel.

 

PCPI (2010 $) has risen dramatically from about $6,200 in 1935 to more than $40,000 in 2012.  Setting aside income distribution equity issues, this appears to be a dramatic improvement in quality of life.  It comes at a price, much of which is associated with reliance on automobile travel.  PCVMT increased from virtually nothing in 1901 to about:  360 in 1918; 1,800 in 1935; 4,000 in 1960; 6,000 in 1972; 8,600 in 1990; 10,100 in 2005; before dropping to 9,500 in 2012.

 

The ratio of PCPI/PCVMT metric shows the extent that quality of life can be separated from the automobile-oriented economy.  The ancillary benefits are reduced reliance on non-renewable fuels, overall environmental damage/emissions reductions, and less time spent in traffic congestion.  Perhaps more importantly are the benefits gained from dollars retained in local economies from reduced travel, resulting in higher levels of base, wealth-building, and overall employment.  As depicted by the chart, PCPI/PCVMT ratios (2010 $) have ranged from about 3.6 to 4.5 since 1935 (BEA Income and FHWA VMT Data).  Of note is the high PCPI/PCVMT ratio of about 4.5 in 1950 (and PCVMT of about 3,000) which then began to decline as the massive highway-building program began.  The PCPI/PCVMT ratio bottomed-out at 3.6 in 1995.  In relation, the chart also shows the rising proportion of household transportation expenditures from a low of 8.5 percent in 1935 to a high of 25.7 percent in 1986.  The level has since stabilized at about 16-19 percent through 2012.  At the same time, PCPI/PCVMT ratio began to climb from the 1995 low to a high of 4.3 in 2012.  There could be several reasons for this trend change.  Declining marginal benefits from increased travel may have reached a point where they are no longer worth the increased transportation costs.  It may have become more difficult to reduce or even maintain past travel times without moving closer to employment and amenities due to increasing congestion.  The recession and sluggish economy from 2008 forward has likely curtailed driving.  The newest generation has not been driving to the same extent of their parents.