Many Northeast Ohio households are “overburdened” by their combined housing and transportation costs because their H+T costs exceed this emerging national benchmark.

Households spending 45% or more of their income on housing and transportation (H+T) costs, excluding the cost of gasoline, are considered to be living in “unaffordable” locations and are “overburdened” by their housing and transportation costs, according to the H+T Affordability Index.

Northeast Ohio Household Incomes

Northeast Ohio Household Income

More than half of the households in the region (52.8%) have annual household incomes below $50,000.

The Cleveland, Akron and Wooster housing markets share the highest median household income in the region, which is approximately $48,500. The Youngstown-Warren housing market has the lowest median household income of $41,210.

Housing Cost Burden for Northeast Ohio Households

Housing Cost Burden Map

HUD 2012 Fair Market Rent and Income Limits

2012 HUD Fair Market Rent Income and Housing

“Fair Market Rent” (FMR) is a standard that is used by the Department of Housing and Urban Development (HUD) for its Section 8 certificate and voucher programs, which helps low-income households obtain better rental housing and reduce the share of their income that goes toward rent.

The FMR is defined by HUD as the 40th percentile of gross rents for typical, non-substandard rental units occupied by recent movers in a local housing market. The 40th percentile price point is a calculation based on a distribution, and is not calculated as a percentage. 40th percentile means that 40% of the rents for that type of unit is below it and 60% of the rents are above it.

In the certificate program, FMRs set limits on what units recipients can rent. In the voucher program, FMRs set limits on the rent subsidy HUD provides to the household.

Certificate program households cannot rent units with gross rents exceeding the FMR. Once households have chosen an eligible units, they receive subsidies from HUD equal to the difference between the gross rent for their units and 30% of their incomes.

Voucher program households receive a subsidy equal to the difference between the FMR and 30% of their monthly incomes. Participants in the voucher program can choose units to live in with gross rents higher than the FMR, but they must pay the full cost of the difference between the gross rent and the FMR, plus 30% of their income.

Average Commuting Distance to Work by Northeast Ohio County

Average Commute Distance to Work for Residents of Northeast Ohio Counties

On average, Geauga and Medina county residents have the longest distance to travel to work; Wayne County residents have the shortest distance.

Commuting times depend on the method that employees use to travel and the distance between their homes and work. Job locations are becoming more scattered throughout Northeast Ohio. This trend has an impact on commuting.

The scattering of job sites throughout the region poses significant problems for workers who depend on public transportation. Transit systems work best and are most efficient when they are serving riders who need to travel from one high density location to another during the same times of the day and meeting the needs of riders in low-density areas poses challenges for transit authorities.

As housing and jobs have moved farther apart, the growing distance commuters have to travel has created an employment barrier for anyone without the unlimited ability to drive.

This barrier is particularly challenging to residents earning lower incomes. Cars owned by low-income people tend to be older, less reliable, and less fuel-efficient, which makes commuting by car unpredictable and more expensive at best.

In addition to the effect that dispersed centers of jobs has on commuting, changes in employment patterns are also having an impact on meeting the needs of commuters. Employment opportunities continue to shift away from the industrial/manufacturing sector to the retail/service sector and service-sector employees can work a higher proportion of nontraditional working hours than employees in other sectors. If the service-sector continues to grow, the hours of traffic congestion may extend beyond the traditional peak hours and traditional transit services may not be well suited to accommodating new demand during nontraditional working hours, especially in areas with lower population densities.

Northeast Ohio Combined Housing and Transportation (H+T) Costs

Housing and Transportation Affordability in Northeast Ohio

Housing and Transportation Affordability

The Center for Neighborhood Technology’s Housing and Transportation (H+T) Affordability Index provides a more comprehensive way of thinking about the cost of housing and true affordability.

The H+T Index shows that transportation costs vary between and within regions depending on neighborhood characteristics. People who live in location-efficient neighborhoods—compact, mixed use, and with convenient access to jobs, services, transit, and amenities—tend to have lower transportation costs. People who live in location-inefficient places that require automobiles for most trips are more likely to have high transportation costs.

The traditional measure of affordability recommends that housing cost no more than 30% of household income. Under this view, three out of four (76%) US neighborhoods are considered “affordable” to the typical household. This benchmark, however, ignores transportation costs, which are typically a household’s second largest expenditure.

The cost of getting around takes a significant bite out of household budgets. The average family in the United States spends about 18% of after-tax income on transportation, but this varies significantly by income and geography. The H+T Index establishes an affordability standard for transportation costs of 15% of household income.

The H+T Index offers an expanded view of affordability that combines housing and transportation costs and sets the benchmark for housing and transportation affordability at no more than 45% of household income. By this measure, the number of affordable neighborhoods in the United States drops to 28%.

Northeast Ohio ranks 21st in the country for Average Annual Transportation Costs totaling $13, 450.

4 responses to Many Northeast Ohio households are “overburdened” by their combined housing and transportation costs because their H+T costs exceed this emerging national benchmark.

  1. What about utilities costs?
    I understand that the data above are based on currently available national benchmarks. However, the real cost of housing also includes the cost to keep that home sufficiently warm. The description of the housing and communities workstream indicates that energy efficiency is also to be considered in the goals. For rehabilitation of existing housing stock and construction of new housing, it would be appropriate to consider the long term effect on energy efficiency in the choices made in renovation and construction.
    This is an issue that especially needs attention in rental homes, where the landlord in charge of maintenance and improvements often is not the one paying the monthly utilities bills. Current incentive programs are focused only on owner-occupied housing. As a result, those who can least afford it often have higher heating bills, with little ability to improve the energy efficiency of the places where they live. This cost should logically be added into the housing and transportation cost values in order to accurately describe the housing cost burden.

  2. Great comment Hallie.

    The housing index costs come from the American Community survey and include the sum of payment for mortgages, real estate taxes, various insurances, utilities, fuels, mobile home costs, and condominium fees.

    Thanks for underlining the importance of energy efficiency in affordability.

    Jeff Anderle
    Manager of Communications and Engagement

  3. Hallie… this is so true for what we face in the University Park neighborhood. All of our rehabs must take energy efficiency in to account in order to keep housing truly affordable for our population.

  4. Transportation costs are so high in large part because of inadequate non-automotive transportation choices available to NE Ohioans combined with land use patterns that preclude anything but the car keys for getting around efficiently. Cars are very expensive to own and with oil prices on an overall permanent rise, it makes it that much worse.

Join the Conversation

You must be logged in to post a comment.