EXPLAINER | How does workforce housing relate to workforce transportation?
Workforce housing located in drive-only locations is already a losing proposition.
Written By Eric Kronberg & Phil Veasley
The following is intended to accompany the article “Tackling Atlanta’s Housing Crisis” from Issue 1 of Southern Urbanism Quarterly.
It isn’t possible to address affordable housing without tackling workforce housing. And we can’t do either without also attending to workforce transportation. Workforce housing is a primary focus of our efforts at Kronberg Urbanists + Architects, and this animates a question we often ask ourselves: For a city in a housing crisis, why does Atlanta accept the preponderance of single-family-only zoned neighborhoods around transit stations in the most mobility-rich parts of the city?
When most people discuss attainability and affordability, they often use the benchmark of AMI. Federal government guidelines determine that a household is housing cost-burdened if they are paying more than 30 percent of their income toward housing. With costs spiking, a significant number of people in the U.S. are housing-cost burdened.(2)
But housing costs are only one piece of a household’s budget. The other big component is transportation. Federal targets state that the combined cost of housing and transportation should not exceed 50 percent of total income. Because we know from above that housing should not exceed 30 percent of income, this means that transportation costs should not exceed 20 percent of income. Taking our studio example (in the print journal companion piece, see the pop-out definition of workforce housing) with a rent of $1,000 per month, a person making 60 percent of AMI should not be spending more than about $670 per month on transportation.(3)
We can weigh this guideline against the true cost of owning a car. How realistic is a figure of $670 per month? It’s not enough to mention that the cost of used cars has increased 45 percent in recent years. With Metro Atlanta being the car-choked and crash-prone area it is, drivers also pay more in gas, waste more time in traffic, and pay higher insurance premiums.(4)
If the absolute best-case cost for an affordable, fuel-efficient sedan is $8,850 per year, that translates to $735 per month. That’s already well past the cap of $670 per month recommended by federal standards. This math reflects the numbers we’ve seen from AAA, the biggest pro-car group we know. Even if we take a middle-ground figure from their studies and estimate that $10,000 per year is reasonable given the dynamic factors in our present economy, that’s $833 per month—even farther past the $670 target. The calculated rental cap for a 2-bedroom apartment at 60 percent of AMI is $1,300. Clearly, this is not double the cost of a studio. But if you have a household with two vehicles, these costs can double.
Put this way, workforce housing located in drive-only locations is already a losing proposition. The most important thing we can do as a city is promote more compact, workforce-inclusive housing close to mobility options. We feel it is essential to explicitly state mobility options instead of transit options: To us, mobility includes a built environment with functional sidewalks for pedestrians, slower streets that are safer for cyclists, reasonable proximity to bus stops, and, ideally, less than a half-mile walk to a MARTA station.
Finley Street Cottages places residents within a half-mile walk on safer streets from two MARTA stations, along with ample options for shopping, dining, and other key amenities.
Eric Kronberg is a zoning whisperer. He uses his skills for good as a principal at Kronberg Urbanists + Architects, leading the firm’s pre-development efforts by combining skills in planning, development, architecture, and zoning. @EricKronberg
Phil Veasley is a multimodal transportation engineer working on projects throughout the Southeast that build places for people to move and thrive. Follow him on Twitter @Urban_Connector
NOTES
(1) Using AMI has a range of challenges associated with it. Because this is an approach defined by the federal government, it’s the Department of Housing and Urban Development (HUD) who determines the catchment area to track and analyze. They also provide this data for metro areas across the country and the City of Atlanta AMI catchment area includes Sandy Springs and Roswell. These Northern suburbs pull the income higher than it might otherwise be for just the City of Atlanta. Under this rubric, the 2022 median income for an individual in Atlanta is $67,500. There are tiered amounts for two-, three-, and four-plus-person households as well. Invest Atlanta posts the 2022 official rent and for sale limits here.
(2) Recent data shows that this measure went up to 30 percent of all U.S. households in 2020. The proportion goes up to 46 percent when we look specifically at renters, and the largest upticks were seen among Black households and those earning $30,000-$49,999. See more here.
(3) If the figure of $1,000 in rent reflects 30 percent of a household income of $40,000 per year, to find the federally recommended cap on transportation costs for that household, we’d look at 20 percent of $40,000: $667.
(4) We like to reference AAA for these costs, because they tend to be exceedingly pro-car and represent the floor of a cost estimate. 2021 costs from AAA range between $8,200-$11,000 per year for a national average. If we assume 8-percent inflation for 2022, the range becomes $8,850-$11,880. When factoring in the higher cost of being an Atlanta driver, this cost of owning a car is over 10 percent more. For some people, an even wider range of cost factors must be taken into consideration. For example, if your current rental housing has a parking lot or deck, those costs are passed through in a form of higher rent. This is part of the cost of vehicle ownership. One example of a more inclusive cost study from 2019, long before used car prices spiked during the pandemic, placed the true cost of Atlanta vehicle ownership somewhere between $11,000-$14,000 per year. Inflation has bumped this range up to $12,000-$14,700. Throw in the gas prices we’ve seen in 2022, and the pain only increases. We’ve also run the math on a monthly mobility budget for someone who is car-free. We calculate $95 for a MARTA pass, $500 for rideshare and scooters, and the remaining budget going toward a bicycle. This calibrated mobility expenditure can put someone within reach of a lot of housing (and employment) options if located in the right place.