Housing and transportation costs stretch household budgets

Article Highlights

• 56% of moderate-income household budgets are spent on transportation and housing
• Low-income households are isolated from areas with high numbers of low-wage jobs 
• Regional affordability depends on a strategy that accounts for the costs of housing and transportation, and the incomes of those who face these expenses 

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The location of affordable housing is an essential part of the equation to ensure a prosperous region for all residents. The existing mismatch between where jobs and affordable housing are located means the cost of commuting is a necessary expense for households across the region. These costs impact every household in the region, but disproportionately affect moderate- and low-income households. Beyond choosing to live near where one works (which is not always feasible), there are few options available to reduce this expense.  

One of the fundamental challenges for the Kansas City region is maintaining and increasing affordability, particularly in housing and transportation. Those two categories are the largest monthly expenditures for U.S. households. The region is no different; median-income households spend 46% of their annual income on housing and transportation. For moderate-income households (households making 50% to 80% of the Area Median Income  ¹  ), the cost jumps to 56%. In the Kansas City region, transportation costs nearly equal the cost of housing.  

These costs reflect the economic geography of the region and decades of development relying on the use of a personal vehicle and an emphasis on single-family home construction on the edges of the region. The result is a sprawling metropolis. According to a U.S. Census 2019 American Community Survey (ACS)  report , the average commute is 24 minutes one way. The average cost of owning a car is between $14,000 and $15,000 annually including insurance, gas, and maintenance  ²  . The average household in the region has 1.87 vehicles. Over 80% of commuters in the region drive alone.

There are ways for households to reduce transportation expenses, but each has a trade-off; vehicles with higher efficiency cost more money and reducing insurance coverage increases risk. Another way to reduce expenses is mass transit. The most robust transit in the region is in Kansas City, Missouri. Most of these lines run north and south. The primary commuting patterns in the region are east and west and cross multiple jurisdictions. Living closer to work can reduce commute times and therefore transportation expenses, but there are limited opportunities for low-income households to employ this strategy. 

Suburban residential communities depend on service sector jobs to sustain residents, yet these areas have few housing options for low-wage workers. At the same time, older areas within the central city and inner-ring suburbs have significant concentrations of housing affordable to low-wage workers, but they possess limited job opportunities and access to transit that reach suburbs located further out from the core. Researchers refer to this phenomenon as spatial mismatch: where the concentration of types of workers and the concentration of types of jobs are not near one another. It is this mismatch, the distance between jobs and workers, which makes it necessary to account for the cost of transportation in understanding the calculus of housing affordability. It is necessary to identify where the need for housing and job opportunities is greatest.  

The maps below use  origin and destination data  for regional households’ commutes to work. Red, yellow, and white indicate where high numbers of trips begin or end. Purple shows where fewer trips originate or end. Though this rendering does not illustrate whether it is the beginning or end of a trip, one can assume that purple areas indicate primarily residential areas in which commutes begin and yellow and white areas of the map are in major job centers where more commutes end than begin.  

The patterns demonstrate where jobs are located within the region and how people move across the region to get to work. One thing to note is the prevalence of east-west commuting (the purple patterns on the origin and destination map). Following the census data on commuting habits these are likely to be individuals driving alone in their own car. The more robust mass transit connections in the region are within Kansas City, Missouri and mostly run north to south within the central core of the job centers. In this case, mass transit serves some, but does not fully align with regional commuting patterns.  

The geographic spread of service jobs raises further questions about where low-income households live and where low-wage jobs are located. One way to understand this is to measure disparity  ⁶  , calculated here as the proportion of jobs and at a particular drive time. When looking specifically at low-income workers, there are distinct parts of the region where the concentration of low-income households outnumbers available low-wage jobs. At the same time, primarily residential areas score quite high in the number of low-wage jobs available but with few low-income households.  

The maps below illustrate these patterns utilizing five-minute drive time at the block group level. These drive times do not account for variation in speed limits. Each drive time will vary depending on distance and access to higher speed roads.  

Click on a map to read a description of the disparity index and to view values over time for the selected geography.

The prevalence of these patterns illustrates the mismatch between jobs and housing in the region. Most low-wage jobs are not located close to low-income households. This means low-income households are often commuting for work, and the cost of these commutes take up a higher proportion of their income than it does for those making the area median or above. In addition, areas with high numbers of low-wage jobs are disconnected from mass transit networks servicing areas with high numbers of low-wage workers. The result is transportation costs, and more specifically car ownership and related costs, are an essential part of the equation when considering how to provide more affordable housing, in more places, for more people.  

The average household in the region spends over 20% of their annual income on transportation. When combined with housing, these costs approach nearly half of an average household’s annual income. In our previous work, we found low-income households were often cost-burdened, paying more than 30% of their income in rent. The Housing and Transportation index from the Center for Neighborhood Technology (CNT) also demonstrates cost-burden among households of all incomes, but particularly those below the median. Moderate-income households spend over 56% of their income on housing and transportation costs with over 30% going to housing. It is important to note that both the percentage spent on housing and transportation increases as incomes decrease.  

In the case of transportation, the cost increases occur despite these households traveling fewer average vehicle miles per year. Mass transit is an option to decrease monetary costs of commuting, but the percentage of households accessing transit (around 2%) is the same at both moderate income and average income. This reflects the way the region developed over time where housing and jobs are often distant from one another. It also demonstrates the challenges for the existing mass transit system in connecting workers to regional job centers or matching regional commuting patterns. There are three major intertwined challenges in the region: a lack of affordable housing, the cost of commuting and low wages.  

The cost of housing and transportation varies across the region. Jackson County has the lowest transportation costs in the region. This reflects both its position as a major job center in the region and as the site of the region’s most robust mass transit network. However, transportation costs still account for 24% of the budget for moderate-income households. In addition, low-wage jobs are concentrated beyond where most low-wage workers live in Jackson County necessitating personal vehicles for commuting as in other parts of the region. 

Johnson and Wyandotte counties in Kansas have the second lowest transportation costs in the region. The median household in Johnson County spends over half of their annual income in these two categories. The median household in Wyandotte County spends only 40% per year. The difference between the counties is the percentage spent on housing. The median household in Wyandotte spends 19% of their income on housing compared to 30% in Johnson County. Households in both counties spend 21% of their income on transportation, reflecting their proximity to regional job centers. For moderate-income households, Johnson and Wyandotte County are also the most and least expensive. These households spend 64% of their income on housing and transportation in Johnson County and 49% in Wyandotte County.  

Household transportation costs are higher the farther away counties are located from regional job centers. Annual transportation costs range from 23% to 25% for the median household and 28% to 31% for households with moderate incomes in Cass and Ray counties in Missouri, and Leavenworth and Miami counties in Kansas. But households, particularly those with moderate and low incomes, are not finding a major discount on annual housing costs living farther from urban centers. In Cass, Leavenworth and Miami counties, median households are paying between 24% and 26% for housing while households in Ray County pay one of the lowest percentages in the region at 20%. For moderate income households in Cass, Miami, and Leavenworth counties, annual housing costs are all above 30% and Ray County is at 25%. The cost of housing and transportation for moderate-income households in these four counties range from 55% in Ray County to 59% in Cass and Leavenworth counties, and 62% in Miami County, the second highest overall in the region.  

As demonstrated in our  previous research , there is an inadequate supply of affordable housing for low-income households in the region. Adding to previous research, this work illustrates the spatial mismatch between where low-wage jobs are located and where low-income households can afford to live. The result is that low- and moderate-income households face expensive choices, paying for housing that consumes over 30% of their income or taking on greater commutes that also consume as much as 30% of their income with minimal savings in housing costs. Across the region, the lowest average housing and transportation cost for moderate-income families was 49% in Wyandotte County. This leaves a household $26,000 per year to cover all other expenses. For low-income families, the calculus of where to live is complicated by the limited availability of affordable housing, in terms of actual units and location, and the built-in cost of commuting to work.

An effective approach to affordability in the region will account for the cost of housing, the necessity and cost of transportation, and increasing incomes.  

1. Moderate-income households: Households making 50% to 80% of the Area Median Income (AMI) as defined by  HUD .
2. Author tabulations from the  Center for Neighborhood Technology (CNT) H+T Index data .
3. High-wage jobs: Jobs paying more than $3,333 per month, as defined by  LEHD .
4. Moderate- and low-wage jobs: Jobs paying less than $3,333 per month, as defined by  LEHD .
5. Lowest-wage jobs: Jobs paying less than $1,250 per month, as defined by  LEHD .
6. Disparity calculations are based off the Michigan State University Institute for Public Policy and Social Research’s  Spatial Mismatch in Housing and Employment: A Tool for Targeted Intervention in Michigan Neighborhoods.