Tag Archives: cost you

That cheap home might cost you

The Salt Lake Tribune

Updated: 03/26/2010 10:48:51 PM MDT

Don’t let the low listing price or rent fool you.
That starter home in Magna looks attractive on the mortgage sheet, but chances are you’ll drive twice as many miles as if you paid a little more up front to live near downtown Salt Lake City.
Housing prices are only part of a neighborhood’s affordability equation, and a study of 337 U.S. metropolitan regions finds that 61 percent of them — including the Salt Lake-Ogden and Provo-Orem areas — fail the test because residents spend so much money driving to wherever they’re going.
The old standard for affordability pegs housing costs at no more than 30 percent of household income. A truer reflection accounts for both housing and transportation, and the Chicago-based nonprofit Center for Neighborhood Technology recommends that combination should not exceed 45 percent of income.
Yet a new online CNT database using Census Bureau and other measures of car ownership, transit ridership and other cost factors finds that the households in the Salt Lake-Ogden area spend 47 percent of their income on the housing-transportation combo. The number is worse in Provo-Orem: 50.5 percent.
But the real eye-openers are in the city and neighborhood comparisons. If you live in Salt Lake City, where there’s closer access to jobs and mass transit, chances are good you’ll maintain fewer cars and spend less than the recommended maximum. In the far-south suburb of Herriman, meanwhile, the road miles help add up to average costs at 63.89 percent of the metro region’s household income median.
“This helps people understand some of the tradeoffs about being farther away,” said Kathryn Tholin, chief executive officer of CNT, an organization dedicated to promoting neighborhoods that are economically and environmentally sustainable.
The numbers key off of a median household income of $48,594 for Salt Lake-Ogden and $45,833 for Provo-Orem.
If you had your eye on that cheaper home in Magna — or just about anywhere else on the valley’s west side — the database can help illustrate some unfavorable dollar tradeoffs. Say you buy just north of Main Street Magna, where the index predicts monthly homeowner costs of $963. The household average there is 1.9 cars, and 26,961 vehicle miles per year, while only 4 percent of working residents ride mass transit. It adds up to households bumping right up against the recommended level: 45 percent of household income spent on housing and transportation.
Compare that to 41.14 percent for Salt Lake City as a whole, and Magna doesn’t seem such a bargain.
Magna resident Laura McDermaid is unconvinced. The township of her birth remains affordable, she said, and many new developments along 5600 West — “There’s a Wal-Mart, a new strip mall” — keep shoppers close to home. For those who have to go elsewhere, she said, state routes 201 and 111 are easily accessible.
She acknowledged, though, that she doesn’t know anyone who rides the bus to work.
There are reasons less tangible than costs to choose the relatively quiet life, she noted.
“Once [people] come out here they stay,” she said. “They just like the people, the area, the accessibility.”
If, instead of the suburbs, you considered moving a couple of blocks south of the TRAX station at 900 East in Salt Lake City, average monthly home ownership costs would be $1,191. But your neighbors on average would keep just 1.3 cars per home and drive only 11,010 miles per year, while 14 percent would ride mass transit. As a result, housing and transportation costs combine for just 35 percent of the region’s household income median.
The disparity holds true for many suburbs. Kearns [45.35 percent of household income], Taylorsville [44.38 percent], West Jordan [49.81 percent], West Valley City [44.08 percent] and Sandy [53.53 percent] all come up less affordable than Salt Lake City [41.14 percent]. While expensive homes can warp the findings in individual neighborhoods — Salt Lake’s upper Avenues and Federal Heights are off the charts — generally the valley’s core and a spine along the TRAX system score best on the index. It’s not just the central city that rate, well, though. Anyplace with solid transit ridership and many jobs fares well.
“We’re making the point that these kinds of choices about where amenities are — where people go — have significant impact on the cost of living,” Tholin said.
It’s a point that the region’s nonprofit planning cooperative, Envision Utah, has spent a decade promoting. While officials with Envision Utah can’t endorse the CNT database, one who looked it over on Friday said its estimates look right.
Planner Ryan Beck said his cousin moved to Eagle Mountain, one of the state’s fastest-growing towns in western Utah County, with full knowledge of the costs but a desire for the quiet life. The CNT database could help other families weigh the same issues, he said. It shows that Eagle Mountain residents spend 69.37 percent of the metro Provo-Orem household income median on housing and transportation.
“The scary thing is when people make that trade-off and they don’t realize it,” Beck said. It’s part of what’s driving foreclosure rates higher in the far suburbs than in the cities, he said.

By Brandon Loomis