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Tampa Bay housing, transportation costs consume area's low wages

Silly me. I was convinced Tampa Bay's burst housing bubble held a silver lining. Deflated home prices would turn this metro area into a magnet for those seeking cheaper places to live.

At first glance, it happened. A house that peaked here at $240,000 is closer to $144,000 today.

Yet here come new figures that suggest — even now — that Tampa Bay remains among the least affordable larger metro areas for housing in the United States.

How can median home prices drop almost $100,000 in market value and still remain unaffordable to many?

Low wages.

Tampa Bay suffers from jobs that don't pay much — relative to other major metro areas. In fact, Tampa Bay ranks last among 25 major metro areas in median household income at $43,382. That's less than other lower-wage cities like Miami, San Antonio, Texas, Pittsburgh or Detroit. Lower household incomes mean lots of folks who work in Tampa Bay find themselves limited by the price of homes they can afford to buy.

In fact, Tampa Bay earned a pitiful D+ grade in a new ranking of housing affordability in 25 big metro areas. The rankings were assembled by Interest.com, part of Bankrate Inc.

Cities with top affordability grades like Atlanta and Detroit (both got A's), followed by Minneapolis (with an A-), Phoenix and St. Louis (both B+) enjoy relatively inexpensive housing and relatively higher pay. That means residents with median incomes in those cities far exceed the earnings required to purchase a median-priced home in their markets.

The metro area's D+ for affordability means someone with a median income falls 3 percent short of the income required to purchase a home here at the median price. (See table.)

A mere 3 percent mismatch does not sound very big. But contrast it with Atlanta. The median income there is higher, while the $103,200 median price of housing is $41,100 cheaper than that in Tampa Bay. That difference means an Atlanta resident with a median income exceeds the requirement to buy a median-priced home by a whopping 40 percent.

Alas, our regional affordability predicament gets worse. Another study out last week shows that among Tampa Bay's moderate-income households (those making between $23,956 and $47,912 annually), housing and transportation costs consumed an astonishing 66 percent of the household budget. Only Riverside, Calif., and Miami had higher numbers.

By contrast, Washington's moderate-income households spent only 51 percent of their household budget on housing and transportation. The dismal findings appear in the report "Losing Ground," conducted by the Center for Housing Policy, based in Washington, D.C., and Chicago's Center for Neighborhood Technology.

The point? Measuring only housing costs to compare regional affordability can be misleading. Tampa Bay's transportation costs alone consume 35 percent of a moderate-income households' budgets. The combination of Tampa Bay's relatively meager household income and its heavy reliance on cars — convenient, perhaps, but expensive — to get around combine for a pricey transportation bill in Tampa Bay.

Why does this stuff matter? The affordability of housing and transportation can greatly influence the ultimate success of any metro area. Consider:

1. People factor in a metro area's housing affordability when deciding where to relocate. In the Interest.com study, that's a strike against Tampa Bay, with its D+ grade.

2. Florida used to be pitched as a cheap place to live in the sunshine. These affordability rankings suggest those days are over.

3. Some metro areas are popular despite extremely high-priced housing that outstrips their local pay scales. San Francisco and New York both received F's in housing affordability. Yet moderate-income households in San Francisco and New York — places with quality mass-transit systems — pay only 21 and 22 percent, respectively, of their household budgets on transportation.

4. When Tampa Bay economic developers try to recruit businesses to this area, company executives may like Tampa Bay as a place for cheap labor. But they might rethink that appeal if their employees find it hard to afford reasonable housing and end up spending a big chunk of their household budgets on transportation.

5. If housing affordability is poor and transportation costs are high, residents inevitably spend less on other things. It's an economic squeeze, for example, that may help explain why the Tampa Bay Rays can boast a strong winning record but still suffer the lowest attendance of any Major League Baseball team.

It's no coincidence that the priority of Tampa Bay business and economic development leaders is to encourage more jobs that pay better wages. The same leaders also want to push — carefully, given recent voter backlash — for a regional mass-transit system to help people get around without relying on cars.

Yes, these are tough challenges. But what happens if we keep the blinders on? Both of these new affordability studies paint dire pictures of a Tampa Bay region that needs to fight a lot harder to raise the economic bar.

Contact Robert Trigaux at trigaux@tampabay.com.

Why is Tampa Bay housing

still so unaffordable?

While Tampa Bay's housing is relatively cheap …

Lowest Home Prices

City Median

Home Price

Detroit $60,200

Atlanta $103,200

St. Louis $131,700

Pittsburgh $132,000

Tampa $144,300

… its rock-bottom wages make it hard to afford a home.

Lowest Income Cities

City Median Income

Tampa $43,832

Miami $45,407

San Antonio $48,699

Pittsburgh $48,854

Detroit $48,968

Sources: Interest.com, Bankrate Inc.

Cities with best, worst bang

for the housing buck

An Affordability Grade of "C" means someone making the median income can afford the median priced home. Atlanta and Detroit tops the list while New York was at the bottom of affordability.

Affordability Grade City

A Atlanta

A Detroit

A- Minneapolis

B+ Phoenix

C+ Pittsburgh

C+ Washington

C Chicago

C- Seattle

D+ Tampa

D Boston

D- Miami

F New York

Sources: Interest.com, Bankrate.com.

Tampa Bay housing, transportation costs consume area's low wages 10/20/12 [Last modified: Saturday, October 20, 2012 4:31am]

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