Scott Bernstein: MSP needs more 'location efficiency,' less out-of-pocket spending on transportation
At the moment, governments and households share one overriding concern: saving money. Scott Bernstein has devised a formula — and a way of thinking — that should help on both fronts.
cnt.org
Scott Bernstein
Bernstein founded Chicago's Center for Neighborhood Technology in 1978 and has long been one of the urban design world's most innovative thinkers. His formula gives families a more accurate picture of the costs of choosing to live where they live. And it gives communities a clearer assessment of the development decisions they make.
All in all, Bernstein's formula invites households and communities to consider saving boatloads of cash by gradually shifting the spatial arrangement of cities and towns in ways that provide more opportunities for convenience, proximity and transit connections.
The H+T Index
Bernstein calls his formula the Housing + Transportation Affordability Index. Here's how it works:
It's a rule of thumb in the United States that a household shouldn't spend more than 30 percent of income on housing. That's a pretty good guide in the abstract. By that reckoning, 70 percent of Americans live in neighborhoods they can afford.
But what happens when you add in transportation costs? Volatile gasoline prices, the spreading out of jobs and other daily destinations, and the need for more cars per household has dramatically increased transportation expenses over the past few decades. When you add in the cost of insurance, car repairs and other incidentals, transportation quickly becomes a family's second biggest expense after housing. Bernstein calculates that, as a rule of thumb, households should strive to spend not more than 15 percent of income on transportation.
A more accurate guide, then, for families would be to consider housing and transportation together, and to avoid spending more than 45 percent of income on those two items. But therein lies the problem. When transportation is added, the percentage of Americans living in locations they can afford drops from 70 percent to 40 percent.
'Drive till you qualify'
Bernstein sees no conspiracy in that sad fact. All kinds of factors go into decisions about where people choose to live. Issues of crime, schools, green space, personal space, local amenities and distance to jobs all play a part. But because transportation costs, unlike mortgage payments, are so fragmented, families tend not to consider them when selecting a home. "Drive till you qualify" has presented generations of Americans with the illusion of lower land and housing costs at the metropolitan edge when, in fact, the cost of a dozen family trips a day in multiple vehicles over longer distances tends to more than erase the cheap-house advantage.
"Rising gasoline prices will only sharpen that realization," Bernstein told me over coffee last week.
His index shows not only how dramatically transportation can raise the costs in remote locations, it offers a road map for how families and communities can improve location efficiency. By plugging in data from the U.S. Census and other sources, Bernstein has mapped 337 metro regions.
The cost of location
One of his examples compares the cost of housing and transportation for living in Orono versus living in Minneapolis' Seward neighborhood, near the University of Minnesota. On average, the same household would spend $1,830 a year less in Seward, Bernstein said.
He also calculated the aggregate savings of emphasizing infill over continuing to rely almost solely on new developments at the metro edge. If 50 percent of new MSP households in the 2000-2030 period decided to locate in efficient locations (like Seward) rather than in edge communities (like Orono), an extra $345.1 million would flow into the local economy.
Bernstein is not saying that families shouldn't have the freedom to choose Orono or any edge community for any number of reasons. He is saying that local officials might reconsider public policies that tip the marketplace toward more expensive housing and job location choices on the suburban edge.
McKnight Foundation
The map above shows, in blue, areas in the Twin Cities that are unaffordable to average people when it comes to housing. The map below, in blue, shows areas that are unaffordable when you factor in transportation costs as well.
McKnight Foundation
With gasoline prices rising recently to $4 per gallon, Bernstein used his model to calculate average transportation costs for various MSP locations. The average monthly transportation cost for a household in a neighborhood like St. Paul's St. Anthony Park would be $837. In Fridley the same household would spend $1,037. In Farmington the cost would rise to $1,201.
"You have a lot of very inefficient areas and, in competitive terms, that's not good for the region," he said.
Impact on the housing meltdown
It hurts also that MSP's job locations have become so decentralized. Twelve employment clusters in 1960 have expanded to 47 today, he said, making it much harder to use transit, walking and other efficient modes to connect people to jobs.
That configuration, both here and elsewhere, played a significant role in the housing meltdown that began in 2008, he said. His map of the Chicago region, for example, shows big housing losses on the city's South Side, where already marginalized people were evicted from their homes. But the preponderance of foreclosures show up in a broad and distinctive crescent running through the far suburban edge. A similar suburban arch appears around MSP and most major metro areas, Bernstein said.
"We're not saying that transportation costs caused the housing crisis," he said. "We are saying that in the far suburbs transportation costs pushed many people over the edge."
A truer cost for elbow room
Bernstein's point is clear enough: Spatial configuration matters when it comes to locating homes, jobs and shopping/entertainment complexes in an efficient, affordable way. "There are places in this Twin Cities region where you have to jump in the car and burn a gallon of $4 gas to buy a gallon of $3 milk," he said. "That's crazy."
He points out that the United States expects to add 92 million people by 2030. How communities arrange and accommodate that growth will make a huge difference in cost and livability. Continuing to add nearly all growth to the edge will exacerbate traffic congestion, increase carbon footprints and heighten dependency on foreign oil. It will also raise infrastructure costs for governments and hit more and more Americans where it hurts most: in the pocketbook.
"People aren't going to change this pattern because they want to do something for the environment," he said. "They will change when they realize how much it costs."
Bernstein had more to say about MSP's spatial configuration affects its competitiveness as the economy recovers. We'll take that up next week.
More like this
- Census: MSP grows, but only on the edge; experts see trouble ahead
- Policies that built first-ring suburbs in 1950s now foster their decline
- We have built too many roads for our own good
- A new wrinkle on traffic: Are delays caused by inadequate roadways? Or by excessively long commutes?
- Census 2010: Can a metro area so sharply divided by income, race and geography continue to thrive on the national stage?
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Comments (8)
Good article, Steve.
“ ‘People aren't going to change this pattern because they want to do something for the environment," he said. "They will change when they realize how much it costs.’ "
A Colorado friend has asserted for years that “True environmentalists live in cities,” and while I think that’s largely true, it hasn’t had any visible effect on development patterns. Cost, however, is another matter.
Another relevant line I sort-of remember, from a pop psychology book quite a few years ago, suggested that “People change behavior when their current behavior brings them sufficient pain.” Hardly a perfect analogy to Bernstein’s thesis, but it’s close to the main point. One of the things I learned as a fledgling affordable housing commissioner in Colorado was that, especially among the lower half of the population economically, transportation often took an equal, and sometimes an even greater, chunk of family budgets than did the actual cost of housing.
These things do tend to relate to each other. The mortgage or rent payment is only part of the picture. Utility bills and (if you’re a homeowner) maintenance have to be considered, which is where insulation and energy efficiency with things like lighting become very relevant, indeed. Add in the total cost of an automobile – not just the loan payment, but the insurance, the maintenance, the fuel costs – and it’s not uncommon for the family that feels financially strapped to BE financially strapped by costs that are often not given the weight that ought to be assigned to them in family budgets.
Development patterns will only be “smarter” in energy and economic terms if the public insists on more efficient communities. That means far greater public awareness that, in environmental and efficiency terms, there’s no figurative free lunch. That awareness then needs to translate into public interest and involvement – everything from attending local city council and planning board meetings to making sure elected representatives are not in lockstep with the usual short-term thinking that’s currently popular. Retrofitting a neighborhood or a suburb so that it functions reasonably well in terms of energy and economic efficiency – like retrofitting in most other contexts – will almost always be far more expensive than thinking far enough ahead to make these considerations part of the original design.
This sort of efficiency is what made the stereotypical “small town” something that many people – urban and suburban alike – keep trying to recreate. Those efforts too often fail, in large part because the factors that Bernstein emphasizes are not given enough weight in the design and development equation. I live in a fairly densely populated Minneapolis neighborhood, but it has zoning and design parameters from the 1950s. There is, literally, no retail in the entire neighborhood, so getting in the car to go grocery shopping is simply unavoidable. At some point, that will have to change.
Good article and great maps.
Gee...we can all live in condense urban housing...just what I wanted.
You don't need a car, take the train.
To heck with freedom, oh I mean choices.
How 'bout we tackle lowering energy prices instead?
Who is this expert to tell everyone else how to live. Let's tell the state/Federal reps and senators to curb their way of life first.
Put your money where your mouth is.
I did put my money where my mouth is, Ms. Christina. I lived in suburbs for 65 years, and moved to the City of Minneapolis 2 years ago. It’s the first time I’ve lived in a big city.
I grew up in, and have lived most of my life in, suburban, single-family housing. I like it. I prefer it to a condo or an apartment. The fact that I prefer that kind of housing doesn't make it a sensible and sustainable choice, whether economically, politically, environmentally, or socially. A century ago, most people lived in a rented apartment, took the train or streetcar to work and back, and the automobile was a toy for the very wealthy. That may well be your future – and mine, too, if I live long enough.
And if it is, there's nothing wrong with taking the train, which moves people and goods more efficiently than any interstate highway, and having the grocery store deliver my food to my door rather than me driving to the store to get it.
When you grow up, you may realize – as Mick Jagger suggested some years ago – that you can't always get what you want, but if you try, sometimes you get what you need.
Energy prices are not something within the power of local and state governments to control. Let us know when you've discovered a vast, new oil field. More importantly, let us know when, after that discovery, you pledge to sell only to American citizens living in the U.S., and that you won't try to make as much money from this one-time-only resource as you can. Either of those choices would restrict “the free market” in ways that will have Republicans carrying protest signs as they march in circles in front of your home.
Like money, oil is fungible, and even if we found Minnesota was floating on a huge, subterranean lake of crude oil so pure it didn't need to have anything removed from it before being refined into gasoline, much of that oil would go to other parts of the world where they're willing to pay more for their gasoline than we are. Talk to any European who owns a car. They've been paying $4+ per gallon for gasoline in Europe for decades. That's why most European cars are small and fuel-efficient by American standards. Be aware, however, that many Europeans live apparently happy, healthy lives (and get better, cheaper medical care than we do) without ever owning an automobile.
I didn’t read anything in the article suggesting that Mr. Bernstein was “telling” anyone how to live. He’s merely pointing out that some lifestyles and development patterns are more inefficient and costly than is necessary or healthy for the society. If you want to live in the hinterlands and drive 15 miles to the store for food, he’s simply suggesting that you’re wasting a lot of your income on transportation. He didn’t say you couldn’t do that, just that it doesn’t make a lot of sense.
I look forward to your explanation of how curbing the lifestyle of elected government officials will make suburbs environmentally and economically viable.
Amen to post #4 (Schoch).
It is not an assault on freedom to suggest a more affordable, more sustainable framework for developing the society or grandchildren will inhabit.
"People aren't going to change this pattern because they want to do something for the environment," he said. "They will change when they realize how much it costs."
We have lost a fundamental concept of economics and that is defining economic rationality in terms of money. The behavioral economists have made a great career out of it. But they are working on a misguided theory that people make choices based on monetary return. People don't maximize monetary return they maximize utility and utility can be both monetary and non-monetary.
Better or smaller schools, less crime, closer and less expensive or congested recreational facilities or just a lack of interest in urban type activities are all non monetary reasons to trade off lower costs. Some of this translates into monetary considerations, public vs. private schools, horses in the back yard vs. boarded out, a 3 hour round of golf rather than a 6 hour death march, bicycling out my front door rather than driving to bicycle in a low traffic area.
Mr. Schoch is wrong in his assumption that living outside of a city is less efficient way to live. It is a less efficient way if you only define life as eating, sleeping, and working. But there is more to life than those three things and free standing communities can provide them.
Mr Bernstein seems to think he's just invented the wheel. Yet, what he's saying has all been done before. Time was when new neighborhoods and streetcar lines we planned together. Now that was efficient.
And Sheryl, choices are nice as long as you have the resources necessary to support them. The experts tell us we've already passed peak oil. I read somewhere that if the earth was a spherical tank of oil, the oil would last about 300 years. And the earth is not a spherical tank filled with oil.
At some point our choices are going to be reduced, whether we choose to believe it or not. Will you then buy an electric car?
Thought not.
"Sheryl's" comment is interesting because it reflects a very adversarial sentiment that is often spouted by my fellow suburbanites. It's not that urban housing is actually "condense" but that the perception of urban living, of surrounding density is mentally dense. In fact many urban core lots and houses are on par with suburban tracts. Ironically the horizontally density of many newer suburban divisions are "condensing" into thin but long lots that are no wider than your typical South Minneapolis neighborhood.
There is a growing group of pioneers, of (white) moms dads, two kids, and minivans who have made huge headway into converting into "urban" quarters and realize they are really no different than a suburban lot on the fringe. With a few improvements and creativity older houses have been expanded and upgraded to modern conveniences without sacrificing the historic nature of these homes.
But exurbia is still a trend and well-to-do people are trendy they follow what they think is Minnesota status quo. It is until cultural reality meets up with actuality of costs that we will finally see "condense" living as acceptable. Meanwhile, freedom is a fairy tale acquired on the blood of our citizens.