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Smart Growth and Affordable Housing

Background

A smart growth approach to housing—compact in nature, green in design and construction, and transit-rich in options—can help both communities and their residents be better stewards of the environment and achieve more affordable, livable communities. The conventional approach to housing—large-lot, dispersed, and suburban—has contributed to the conversion of rural land at a rate three times faster than population has grown,1 as well as a rise in vehicle miles traveled that is also triple that of population growth.2 This approach challenges our ability as a nation to maintain and protect air and water quality, as well as local governments' ability to finance and maintain the supporting infrastructure of schools, utilities, street networks, and police and fire protection. It also determines the housing and transportation options available to Americans.

As such, the location of housing—and the type of transportation options that it supports—dramatically affects affordability. Dispersed, low-density housing often cannot support viable public transit, biking, or pedestrian options, all but making auto ownership a necessary cost. The true cost of housing, therefore, is the combined cost of housing plus transportation. On average, working families spend nearly 60 percent of household income on the combined costs of housing and transportation. For the working poor, housing location has an even more dramatic impact. Households earning $20,000 to $35,000 that live far from job centers pay 70 percent of their income on housing (33 percent) plus transportation (37 percent). For those living in the central city, housing costs remain unchanged, but transportation drops from 37 to 22 percent.3

Location can also contribute to more stable housing values—critically important for all households whose home is their primary asset. Evidence shows that centrally located homes with a greater range of transportation choices held their value better during the 2007-2008 surge in gas prices than did car-dependent homes in outlying suburban areas.4

The approach used in housing construction also determines the affordability of a home. Green building materials, techniques, and appliances reduce energy consumption by 33 percent5 and water use by 20 percent or more.6 This equates to significant savings in energy expenditures-which now represents as much as 18 percent of household income7 and is likely to continue to rise. Water savings yield lower utility costs at the household level, but also reduce demand, which is vitally important in fast-growing Western areas. In addition, green building approaches contribute to healthier living environments, which reduces the need for medical care for children and critical days of missed work for parents that struggle to make ends meet.

Smart growth approaches support the construction of healthy homes, built with green building techniques and materials, in locations that permit access to a range of transportation choices. They support the construction of a range of housing types to meet the needs of all households, including families, the elderly, and young professionals. They encourage investment and redevelopment in existing communities, providing an opportunity to use existing infrastructure, as well as to revitalize and add amenities in areas that have suffered from disinvestment. Finally, they provide a critical part of our response to climate change, in which buildings and transportation contribute 63 percent of our nation's greenhouse gas emissions. Even with advancements in fuel and vehicle technology, we will be ill-equipped to turn the tide on climate change without an improved approach to where we live and how we get around.

These approaches deliver benefits for households-better quality of life, more choices, and financial savings-as well as for communities. They are an important part of our approach to protecting the environment.

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EPA Resources

EPA recently provided support through its Smart Growth Implementation Assistance program to the Capitol Region Council of Governments in Hartford, which requested assistance to help communities use state affordable housing dollars to achieve better environmental results through smart growth and green building approaches. Local decision-makers, state policy makers, developers, and local advocates came together in May 2009 to develop guidelines for development that can be used to ensure that state and local housing programs lead to mixed-income, mixed-use, green, compact developments with a range of transportation options. These guidelines will be available for adoption by local governments and will help shape their approach to creating incentive housing zones for affordable housing in rural, suburban, and urban locations.

Location Efficiency and Housing Type – Boiling it Down to BTUs
2011. Jonathan Rose Companies for EPA.
This study examines how a home's location and access to transit affect household energy use, compared to using energy-efficiency measures in homes and cars. Creating more energy-efficient communities and buildings would reduce our impact on climate change and save people money on household energy costs.

Affordable Housing and Smart Growth

Affordable Housing and Smart Growth: Making the Connection (PDF) (57 pp, 2.5 MB, About PDF), Smart Growth Network, November 2001.
This report provides case studies of towns, cities, and states that have linked smart growth with affordable housing. Among the policies and approaches featured are: reuse of vacant properties and land, flexible land use policies, regional fair-share housing agreements, the Low-Income Housing Tax Credit, increased affordability through reduced transportation costs, the federal HOPE VI program to construct mixed-income housing, and community land trusts. The approaches discussed represent a range of options for public, private, and nonprofit sector members to consider as they pursue smart growth and work toward affordable housing goals in their communities.

Residential Construction Trends in America's Metropolitan Regions, EPA, 2009.
EPA examined residential building permits in the 50 largest metropolitan regions to determine if there has been a shift toward redevelopment and in which regions the shift has been most significant. The trends indicate that the distribution of residential construction has significantly changed over time in many regions. In more than half of the largest metropolitan areas, urban core communities have dramatically increased their share of new residential building permits. However, in many regions, a large share of new residential construction still takes place on previously undeveloped land on the urban fringe.

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Other Resources

Center for Housing Policy. A Heavy Load: The Combined Housing and Transportation Burdens of Working Families (PDF) Link to EPA's External Link Disclaimer 2006.

Center for Neighborhood Technology, Housing and Transportation Affordability Index Link to EPA's External Link Disclaimer

CEOs for Cities. Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs (PDF) Link to EPA's External Link Disclaimer 2008.

Donovan, Shaun. "Livable Communities, Transit Oriented Development, and Incorporating Green Building Practices into Federal Housing and Transportation Policy". Written statement of Secretary Shaun Donovan, U.S. Department of Housing and Urban Development, for hearing before the Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, Committee on Appropriations, U.S. House of Representatives, March 18, 2009.

Enterprise Community Partners' "Green Communities" ProgramLink to EPA's External Link Disclaimer

Location Affordability Portal: Link to EPA's External Link Disclaimer This tool, produced by the U.S. Department of Housing and Urban Development and the U.S. Department of Transportation, can help consumers, researchers, and policymakers better understand the impact of transportation costs on housing affordability.

Urban Land Institute. "Beltway Burden: The Combined Cost of Housing and Transportation in the Greater Washington, DC Metropolitan Area" (PDF) Link to EPA's External Link Disclaimer 2009.

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1 Heimlich, Ralph E. and William D. Anderson. "Development at the Urban Fringe and Beyond: Impacts on Agriculture and Rural Land," (ERS, Agricultural Economic Report No. 803) June, 2001.

2 Ewing, Reid, et al. Growing Cooler: The Evidence on Urban Development and Climate Change. Urban Land Institute, 2008.

3 Center for Housing Policy. A Heavy Load: Combined Housing and Transportation Burdens of Working Families. 2006.

4 CEOs for Cities. Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs. 2008.

5 Good Energies. "Greening Building and Communities: Costs and Benefits." 2008.

6 Enterprise Community Partners. Interview, November 2008.

7 Trisko, Eugene. "The Rising Burden of Energy Costs on American Families, 1997-2007." November 2006.

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