Around D.C., a Cheaper House May Cost You
Thursday, October 12, 2006
One of the lures of the outer suburbs is more house -- maybe even one with a big yard -- for less money. But a new study shows that the savings are illusory: The costs of longer commutes are so high that they can outweigh the cheaper mortgage payments.
A study of Washington and 27 other metropolitan areas by the Center for Housing Policy found that the costs of one-way commutes of as little as 12 to 15 miles -- roughly the distance between Gaithersburg and Bethesda -- cancel any savings on lower-priced outer-suburban homes.
"If you save $40,000 to $50,000 by not buying that house in Montgomery County but expand your commute by an extra 30 miles a day, you can certainly see how that new house could not end up being the deal you thought it was, especially if gas is at $3 a gallon," said Lon Anderson, spokesman for AAA Mid-Atlantic. "But because of the exorbitant cost of housing closer in to [the District], they don't have a choice if they want to live with their families in a home they can afford."
Barbara J. Lipman, an author of the study, said that people tend to focus on all the zeroes that differentiate the price of a closer-in house from one in the outer suburbs, but they don't realize how much they're spending on commuting costs, such as gas, tires and insurance.
"Even if you save a couple of hundred dollars a month on your mortgage, it doesn't nearly outweigh the costs of the cars you are driving," she said.
The average cost of owning a 2006 Toyota Camry and driving it 15,000 miles a year with gas at $2.40 a gallon works out to $7,967 a year, according to AAA.
Higher gas prices put such a strain on Hannah and David Lynch's budget that they decided to carpool instead of driving separately to their jobs from their Sterling home, even though she works in the District and he works in Baileys Crossroads.
Moving closer to their jobs is out, Hannah said, because "there is no way we could move into an equivalent three-bedroom house for the same amount," she said. "We don't want to downsize and give up a yard, for instance."
Still, the frustrations of her 90-minute one-way commute can sometimes rankle, she said, "especially when there's a stupidity delay on the [Dulles] Toll Road. It's a trade-off."
The study also found that a lack of affordable housing near job centers in the Washington area and elsewhere forces low- to moderate-income families to live in outer suburbs where transportation options are few and costs are high.
Families in the Washington area that earn $20,000 to $50,000 a year spend nearly a third of their income on housing, a figure exceeded only in the San Francisco area, the study says.
"We do have central-city job growth, but in Washington and other places, jobs are growing faster in the suburbs, and the population generally is suburbanizing farther and farther out," said Lipman, who works for the Center for Housing Policy, which is a research arm of the National Housing Conference, a District-based, nonpartisan, nonprofit organization that advocates for affordable housing.
Of the 20 fastest-growing counties in the United States, 15 are located 30 miles or more from urban centers, including Loudoun and Stafford counties, Lipman said.
Lipman said many communities have identified a lack of affordable housing, traffic-clogged roads and longer commutes as critical issues but have not linked them. "One thing this study shows is the need to have regional solutions about both housing and transportation," she said.
The study found that most people in the outer suburbs pay so much for transportation not just because of long commutes but also because they have to use their cars for nearly every errand and trip.
Lipman also said many of the trends will accelerate. The study noted that 62.1 percent of the U.S. metropolitan population lived in the suburbs in 1996, up from 55.1 percent in 1970.
And although the median national household income has risen 10.3 percent from 2000 to 2005, it has been outpaced by housing costs that have gone up 15.4 percent and transportation costs that have risen 13.4 percent over the same period. Gas prices, for instance, have been rising steadily over the past four years, more than doubling from $1.42 a gallon in June 2002 to $2.86 a gallon this past June.
Stewart Schwartz, executive director of the Coalition for Smarter Growth, said the data highlight a disconnect between where people live and work. Those with the highest commuting costs generally live on the eastern side of Washington, while many of the jobs are on the northern and western sides.
"A three-car family puts a lot of money into depreciating assets, instead of into mortgages and college educations," he said.