High gas prices limit commuting to rural areas
April 15th, 2010 by Jim JustAn analysis by the Urban Land Institute finds that the typical household in the study area spends upwards of $22,000 annually on housing, which represents roughly 35% of the median household income ($68,036). With transportation costs for the typical household reaching nearly $12,000 annually, the combined costs of housing and transportation account for roughly 54% of the typical household’s income.
Similar studies conducted for the San Francisco Bay Area and the Washington, D.C., region have found average housing and transportation cost burdens of 59% and 47%, respectively.
“Drive until you qualify” make no sense when the transportation costs offset the lower house prices.
When gasoline prices rose to over $4 per gallon in 2008, the high prices hit exurban areas hard and magnified the housing bust in areas such as Riverside County, CA.
A news story in the Minneapolis -St. Paul Star Tribune now reports a reversal in the migration to suburbs and exurbs in Minnesota:
New estimates suggest that the movement into suburban and exurban counties within commuting distance of Minneapolis and St. Paul has stopped cold for the first time in recent memory.
For many years, the combination of robust growth, a multitude of freeways and plenty of open space helped ignite an explosion in exurban living. People were commuting for hours from towns such as Mora, Glencoe and Owatonna. National experts classed the Twin Cities as having the nation’s third-largest exurban flight from 2000 to 2005, ahead of even sprawling Atlanta.
But the U.S. Census Bureau’s latest estimates — the first to reflect the impact of 2008’s $4-a-gallon gas — suggest that:
- With people abandoning foreclosed and unsellable homes, the two-state ring of exurban counties is hardly growing. For these counties as a group, 2009 marked the first time more people left than moved in.
- In the five big suburban counties closest to the center (Dakota, Scott, Carver, Anoka and Washington), new arrivals have slowed to a standstill. With a wave of baby boomers sitting on empty nests in older suburbs such as Eagan, and new construction all but extinguished in once-booming counties such as Scott, growth is half what it was a decade ago.
- The two big core counties of Hennepin and Ramsey, losing tens of thousands of people a year as recently as five years ago, are on the rebound. Growth is gaining by the year.
When gas is cheap, moving farther out as a way to get more space for less money can make sense. But there’s a trade0ff. Time spent commuting is time not spent with a spouse, a child, a dog. Distance can be a drag. When gas prices rise and housing prices collapse, being upside down on a mortgage can make it difficult or impossible to escape.
Ominously, gas prices are now rising again.