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Continued: Getting around the Twin Cities is nearly as costly as housing

  • Article by: DAVID PETERSON , Star Tribune
  • Last update: November 14, 2013 - 1:06 PM

When the federal government calculates transportation expenses, it includes not only the purchase of a new or used vehicle (net of trade-in value), but also finance charges, gas, oil, maintenance and repairs, insurance, licenses, registration costs, parking fees, towing charges and tolls. It also includes transport for vacations, and in that sense it would dip and rise with the economy.

Gas prices have eased visibly in recent weeks, even as home prices have risen. It isn’t obvious what the long-term prospects are for either.

‘Big house, big yard’

The new data arrive as the federal government unveiled this week a new website aimed at making the sometimes-veiled cost of transportation more transparent.

“As we thought about foreclosures and other problems, we realized that we needed to make the investment to get this kind of data out to folks, and it’s a flagship investment,” said Salin Geevarghese, acting director of the Office of Sustainable Housing and Communities of the U.S. Department of Housing and Urban Development.

Asked what federal housing people think that trends will look like, Geevarghese said simply: “Good question. Many people we talk to, including in the Twin Cities, believe, looking at demographic trends, that the preferences of consumers are changing,” he said. “We hear that folks are asking, ‘Is that big house and big yard something I need, or would I actually choose a more urban place?’ It’s well documented that people are making very, very different choices.”

That said, he stressed, a website that encourages home buyers to consider transportation costs is not meant as a sprawl-fighting tool.

“If that’s your lifestyle and that makes sense for you, fine; but let’s make educated decisions. Housing costs are usually fixed and predictable, but many people find they didn’t know what transportation costs looked like.”

In the Twin Cities, one backdrop to the debate is the gradual movement of a DFL-dominated Met Council toward a new set of forecasts of future growth. Preliminary estimates suggest a strong movement into closer-in places and far less growth at the outskirts, though the estimates seem likely to be ratcheted back some.

Still the Met Council’s move is a concern to many civic leaders, not just homebuilders, said Wendy Danks, spokeswoman for the Builders Association of the Twin Cities

“We have a lot of employment centers scattered around,” Danks said. “People live in Elk River and work in Rogers or Maple Grove. We’re responding to customer needs as much as anything else. Where are the demographics going? Will millennials really want to live in high-rises downtown or in south Minneapolis when they start having children?”

That said, she added, some of her group’s members are eager to get in on higher-density development.

She herself could not have dreamed, when she bought an exurban lot many years ago, what would happen to the price of gas.


David Peterson • 952-746-3285


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  • The Twin Cities can see congested commutes, such as on Interstate 35W in Minneapolis.

  • Construction of a single-family house in the Lennar Bonaire development - the 18900 block of 62 Ave N in Maple Grove.

  • Why the shrinking gap?

    • Since 2007, the average annual household cost of owned dwellings has dropped; rent stayed stable. The median property value dropped by nearly $30,000.

    • Indeed, 2012 was the first year since 2007 that the share of cost-burdened households dropped, meaning those paying 30% or more of income on housing. (34.4% in 2011, 31.1% in 2012).

    • On the transport side, vehicle expenses caused the jump. Since 2007, household expenses for gas and other costs have risen by more than $1,400; average spending on transit dropped.

    Source: Wilder Research

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