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Transportation is a big expense
for America’s families. Our newest study, Driven
To Spend, conducted with the Center for Neighborhood Technology,
looks at the effect of our transportation system on family finances.
This report is a departure from our previous work.
In the past, STPP has focused on the costs and benefits of
different forms of transportation spending by government.
But this isn’t the whole picture.
Individuals spend five times as much of their own money on
transportation as governments spend on their behalf.
What about this spending?
Several
months ago we set out to understand how much people are spending, what
they’re spending it on, and why. It
turns out that American families spend a lot on transportation: nearly 19
percent of the average family budget in 1997 and 1998.
And this varies widely from place to place. In some metro areas, more than 22 percent of household
spending goes for transportation; in others, only 15 percent. Understanding this variation was the primary goal of our
research.
In
our analysis, two factors emerged as correlating strongly with the
variation in family transportation costs: access to multiple forms of
transportation, and sprawl. This
pattern is found at many different levels.
In particular, access to a variety of transportation choices is
associated with lower costs when comparing different neighborhoods within
a metro area, when comparing different U.S. metro areas to one another,
and when comparing metro areas in the U.S. to their counterparts in
Canada, Europe, Australia and Asia. And
the difference can be thousands of dollars per year.
Our
most troubling findings relate to the predicament of those trying to work
their way out of poverty. Transportation
costs eat up a staggering 36 percent of the average income of households
in the bottom income quintile, those earning less than $12,000 per year.
And this spending does little to generate equity over time.
Freeing up a portion of these resources to invest in home ownership
would give low income families a better chance of
moving into the middle class.
Over the course of a decade, $30,000 invested in owning, using and
maintaining a car can be expected to result in just $3,000 in equity.
The same $30,000 invested in owning and maintaining a house on
average yields more than $13,000 in equity.
For
too many poor families, the need to own one or more cars is placing out of
reach the single most effective tool for accumulating family wealth over
time: owning a home. We
realize that transportation policy makers are not used to thinking in
these terms. Driven To Spend makes the case that it’s time to start.
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