Getting Places: Transit-Oriented Development

Federal and state transportation policies have done more to reinforce socioeconomic inequalities than to correct them. “Data that might help decide how to spend the money, such as economic benefits, environmental impacts, or social inclusion, is ignored or not even collected,” says Robert Puentes, a scholar at the Brookings Institution.¹ Federal spending on public transportation averages about 20 percent of all transportation spending. Since the end of World War II, transportation policies have favored building roads and highways instead of mass transit.

By favoring road and highway creation instead of public transit, policies have contributed to the exodus of the middle class from urban areas to the suburbs, pulling jobs with them and depleting the tax base in central cities. The resulting sprawl has led to higher costs of transportation for everyone, but the heaviest burdens have fallen on low- and moderate-income working families.

Cumulative Government Capital Investment in Transit and Highways Since 1956

Working families spend, on average, 60 percent of their income on housing and transportation together.² After housing, transportation is the second highest household expense. In rural areas where commuting long distances to work is the norm, transportation costs can easily be higher than housing costs. Not surprisingly, families spend considerably less on transportation in communities with access to mass transit than in places where access is poor.

Housing and transportation can easily create a catch-22 situation for families. Housing costs are highest in areas closest to employment centers. In search of affordable housing, families move away from where jobs are concentrated, thereby raising their transportation costs. For every dollar saved on housing, working families spend 77 cents on transportation.³ In a study of 28 of the largest metropolitan areas, the Center for Housing Policy found that for low- to moderate-income families, the cost of transportation overtakes the savings of living further away from work once commuting distances reach 12 to 15 miles.⁴

Housing and transportation needs are linked and must be considered together rather than separately. Chapter 2 argued that there must be more affordable housing to meet the needs of families facing severe housing cost burdens. Of all the government safety-net provisions to support low-wage workers, virtually none address high transportation costs. Policymakers seem to believe that this is the 1920s, when transportation costs consumed 3 percent of household income rather than the current figure of 20 percent. It says something about how little thought and advance planning has been given to transportation issues that, of the 20 fastest-growing counties in the United States, 15 are located 30 miles or more from the nearest central business district.⁵

Many cities around the country want to invest in mass transit in order to upgrade or build new light rail, streetcar, and local bus systems. The costs of transit-oriented development are steep. On average, up-front costs for light rail run between $15 million and $100 million per mile.⁶ Clearly, cities won’t find it easy to afford such sums in a time of recession. And states are legally obligated to balance their budgets, so it will be harder for them to contribute to such large investments without sacrificing other social programs, making federal support even more critical.

More than 85 percent of low- to moderate-income families use a car to get to work.⁷ Mass transit can help these families and the communities where they live. Transit provides an affordable alternative to owning a car, connecting people to jobs, education, health care, shopping, and other needs. Moreover, extending mass transit to underserved communities increases economic growth in those communities. The downside is that housing and other living costs often rise as neighborhoods once lacking amenities such as public transportation become more attractive to middle-income households.  Frequently, poorer families can no longer afford to live there.

While transit-oriented development requires large upfront costs, the long-term gains are simply too important to ignore. Investments in mass transit should be one of the lynchpins in the U.S. strategy to fight climate change, since transportation accounts for a third of carbon dioxide (CO2) emissions, of which the largest share comes from cars.⁸ Investments that increase the use of public transportation mean fewer cars on the road, which means less CO2 in the atmosphere.

New investments in the nation’s transit infrastructure are long overdue. As a percentage of Gross Domestic Product (GDP), government spending on infrastructure peaked during the Eisenhower administration in the 1950s and has been declining steadily in the decades since. Yet in terms of creating jobs, government spending on infrastructure projects offers one of the best returns on investment. On average, a dollar spent on infrastructure generates $1.59 in economic growth. Investments in mass transit create 19 percent more jobs than comparable investments in roads or bridge projects.⁹ Plus, these are labor-intensive jobs, mostly in construction, a sector that has shed nearly 1.5 million jobs since the recession began in 2007.¹⁰

Proponents of mass transit have been described as having a metropolitan bias. This should not be a criticism since most Americans work in metropolitan areas and metropolitan areas generate 75 percent of the nation’s GDP.¹¹ Moreover, transportation policies have had an obvious anti-metro bias for decades. Even the forward-looking American Recovery and Reinvestment Act of 2009, rightfully praised for ramping up investments in clean energy and green jobs, continued to adhere to the status quo, allocating the bulk of its transportation resources to road repair and construction rather than mass transit.

To be fair, the legislation necessarily focused on “shovel-ready” projects. But today’s needs are not the same as yesterday’s needs. Climate change and the need to lower CO2 emissions should shift the balance irrevocably to mass transit.

What Working Families (households with incomes between $20,000 and $50,000) Spend on Housing and Transportation

Issues