An excellent article from New Geography, pertinent to Sacramento.
Housing affordability has been a tenacious and intractable urban problem for as long as stats have been kept. Several cities recently declared it a crisis. But what kind of problem is it? Opinions vary widely. An economic problem, or a social one? A land resource issue? Or, as traded wisdom would have it, the result of reliance on the wrong urban form? Proposed solutions vary accordingly. Now, new evidence rules out one potential source of unaffordable housing: clearly, it is not an urban form problem. The widely-believed theory that a city’s lack of affordable housing can be fixed with increased compactness — when combined with public transit — is apparently wrong.
In a recent article we questioned a publicized correlation between a compactness index level (i.e., urban form) and housing affordability. The argument supporting compactness is that it enables the use of public transit and active mobility modes, which reduce transport expenses sufficiently to eclipse the higher cost of housing prevalent in compact districts. We challenged that assumption, and found that data from eighteen US regional metro regions showed no such effect. Even if it were at all present, it would not be sufficiently pronounced to be an effective solution. Those conclusions were based on a regional look at the problem.
While the aggregate regional data undermined the urban form theory of affordability, what do sub-regional level data show? At this finer level, could the housing-plus-transportation burden work to the advantage of households? To answer this question, we used data from 18 districts of the Metro Vancouver (BC) region. In this case, the official data exclude certain types of households — a critical limitation. But, given that such disaggregated data are rare, an effort at deciphering their meaning is warranted.
The two subject groups were Working Homeowners and Working Renters. First, we looked at whether or not the working homeowners could find accommodation that suited their income without stretching themselves thin.
Chart #1 shows the progression of housing costs in each sub-regional district, and the corresponding household median income. The in-step slopes of the two data sets suggest that working home-owning households have housing costs in tune with their earnings. This implication is further confirmed by the strong correlation (R2= 0.8598) between their income and their housing expenses.