Study: Less sprawl, more transit may boost area's affordability

By Thomas V. Bona

BusinessRockford.com

Judging by housing costs alone, the Rockford area is pretty affordable.

In much of Winnebago County, and the denser portions of Boone County, housing costs are on average 30 percent or less of the area’s median income.

But tack on transportation costs, and the burden becomes much heavier. In most of the region geographically, households spend at least 45 percent of their income on housing and transportation costs, according to a study by Chicago-based Center for Neighborhood Technology.

It’s a trend that’s worsened in recent years, CNT reports, as people moved farther from urban centers and drove more. It’s not just commutes to work, which on average make up 20 percent to 30 percent of transportation costs. It’s also trips to stores, restaurants, schools, health care services and recreational activities.

And with gasoline prices expected to return to $3 a gallon later this year, transportation costs are going to go up.

“People don’t realize that the transportation costs are eroding the savings that they are achieving on lower housing costs,” said Linda Young, CNT’s research director. “People not only need to drive more, but oftentimes, they need to own more cars. There’s no other option but to own a car.”

Faster fix: Cut cost of living
The solution, say CNT and local planners, is to put housing, jobs and services closer together, and to give people better transit options. That could include increased service by Rockford Mass Transit District, the return of Amtrak, the extension of commuter rail and even streetcars. There are also plans in Rockford and Boone County to build “transit-oriented developments” around future train stations.

“We think that there are opportunities to have all of these modes mesh and good planning upfront will lead us there,” said Steve Ernst, executive director of the Rockford Metropolitan Agency for Planning.

CNT began tracking such costs in its Housing and Transportation Affordability Index several years ago, with help from the Brookings Institute. This year, through a grant from the Rockefeller Foundation, CNT’s study will extend to more than 330 metro areas, including Rockford.

In Winnebago County, the average household income grew $272 a month between 1999 and 2008, while housing and transportation costs rose $463 a month.

At a meeting in Chicago with local leaders in December, CNT President Scott Bernstein said income gains made by bringing better jobs to the area can’t keep up with such rising costs, so the fastest way to improve quality of life is to cut expenses.

In Chicagoland, for example, transportation costs generally decrease the closer homes are to Metra stations, because people can take trains to work.

Boone County plans hub
That’s why Boone County is planning Tollway Station Point, a transit-oriented development near a proposed Irene Road interchange with Interstate 90. It also could include a commuter rail stop and bus connections. Rockford has similar ideas for train stations downtown and around Alpine Road.

Mark Williams, executive director of Growth Dimensions, said Boone County recognized that sprawl meant higher transportation costs for residents, as well as higher costs for government to provide utility, public safety and other service. But people need good housing alternatives, he said, and the Tollway Station Point project would put homes near retail outlets, offices and transportation.

“If you do smart management of growth, it’s going to create the best level of investment,” Williams said. “Good investment attracts other investment.”

RMTD follows the growth
It’s also why Rockford Mass Transit District is putting a new bus transfer center on the east side of Rockford. That, along with an expected change in some routes in 2011, will focus more on service to areas where there’s been a lot of growth, spokeswoman Lisa Brown said.

“Where housing goes, so goes the services, so goes the retail, so goes the restaurants,” she said. “There’s a number of social service agencies that have branches that have moved to that neck of the woods.”

RMTD also is looking at ways to extend bus service into Belvidere from that new facility.

Rural living comes at a price
Dave Taylor, chairman of the group trying to bring commuter rail here, said putting development near transit options could attract more young people to the area. They want easier access to jobs and recreational activities in Chicagoland, without having to always hop in their car.

Taylor knows the trade-off of living in the country. He and his wife live in rural Boone County, where they bought a big house and 35 acres for the cost of their old Chicago bungalow.

But his wife commutes daily to Chicago, driving to the Metra station in Harvard, taking the train downtown and then a bus to her office. Between that and all the other driving the Taylors do, their transportation costs are more than $5,000 a year.

“I’m filling up the gas tank rather frequently because where I’m located, if I go to Harvard it’s a 25-mile roundtrip and if I go to Belvidere it’s a 25-mile roundtrip. You’re covering greater distances than people in populated areas,” he said. “It’s definitely worth it for us. ... Financially it’s not as big a struggle as it might be for a younger family to do the same.”

‘It takes Chicago wages’
Local residents who commute to Chicagoland say lower housing prices and higher wages make the higher transportation costs worth it for them.

James August lives in Belvidere and used to work there. He took a job in Carpentersville that pays 50 percent more, more than enough of a bump to justify the extra $2,500 a year in gasoline costs.

“I’ve always believed that it takes Chicago wages to live in rural Belvidere/Rockford. With my current income, I still barely make ends meet,” he said. “Traveling to work doesn’t help with how much gas is, but ... I’ll drive as long as it takes to make sure my family is being taken care of. It sure beats the alternative, which is working some dead-end job and collecting public aid.”

August has made some trade-offs, though. He bought a more fuel-efficient car, and he doesn’t travel as much to visit friends and family.

Minimizing other expenses
Mark Swisher lives in Rockford but drives to work in Addison, spending about $3,000 on gas and $1,200 on tolls a year. Still, it’s a better job then he could get here, and the housing costs would be double if he moved to the suburbs.

It helps that he lives close to shopping and amenities in Rockford, so his other transportation costs are low.

Swisher doesn’t think he’ll change his plan even if gas prices go way up again.

“If everything keeps going up, housing would go up too, it would probably go up proportionally,” he said. “My election is to drive versus spend all the extra money to buy a house.”

Cash better spent elsewhere
For those who don’t have good alternatives, having to drive a lot can have negative effects beyond being stuck in traffic, Bernstein said.

He said there’s a correlation between foreclosures and high transportation costs. People who just meet the guideline of spending 30 percent of their income on housing could be strapped by abnormally high transportation costs.

Also, transportation costs is money sucked out of the local economy, he said, that could be better spent elsewhere.

Gas prices the wild card
Ernst said with gas prices back on the way up, there may be financial incentive for people to move closer to work, services and transit. When gas prices were more than $3 a gallon last time, it created a change in habits that will likely come back.

“When I got my first mortgage ... all you ever looked at was your housing and your food and your health care costs,” he said. “In 2010, you really have to be cognizant of the transportation cost impact to the average household budget, because now that is much larger than food and health care.”

Staff writer Thomas V. Bona may be contacted at 815-987-1343 or tbona@rrstar.com.

Center for Neighborhood Technology’s findings
Annual household income in Winnebago County grew from $3,657 per household a month in 1999 to $3,929 in 2008, or an increase of $272 a month. During that same period of time, monthly housing costs rose by $264 per month and transportation costs by $199; the combined H+T increase of $463 exceeded the average monthly income growth by $191.

For the entire Rockford metro area, the average home has 1.7 cars, though it ranges from 1.3 to 2.1 depending on the neighborhood.

The average household drives 19,645 miles a year, though it ranges from 11,761 to 28,972 depending on the neighborhood.

For more on CNT’s Housing and Transportation Affordability Index, visit htaindex.cnt.org.

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