Is metro Atlanta an affordable place to live? The affordable price of housing in metro Atlanta can be credited with helping to add more than one million new residents to the region over the last decade. Our median sales price for a single-family home is $167,500; among the largest 25 metros in the United States, only St. Louis and Tampa have lower median sales prices for houses. But does that mean metro Atlanta is an affordable place to live?
Affordability is a tricky issue. A host of factors that are not necessarily related to housing can affect the affordability of a region, and one of the most significant factors is the cost of transportation. By some metrics, when transportation costs are added to overall affordability costs, metro Atlanta becomes one of the LEAST affordable large metros for moderate-income families. These families spend an average of 63 percent of their income on transportation and housing costs. To further complicate things, the region’s largest employment centers lack affordable housing located nearby, meaning that many lower-income workers cannot afford to live near their jobs.
So how do we talk about affordability in the region? Here are some available metrics:
- The Housing Opportunity Index refers to the percentage of homes that are affordable to a family earning the area’s median income. Using this metric, Atlanta ranks as the sixth most affordable place among the largest 25 metro areas in the U.S.
- HUD’s Location Affordability Index, adds transportation costs to housing costs and considers different household budget scenarios. Metro Atlanta ranks in the middle of the pack for affordability in this index, spending, on average, 53 percent of income on housing and transportation costs. (The Center for Neighborhood Technology suggests a threshold of no more than 45 percent.)
- The Center for Neighborhood Technology (CNT) uses a more expansive definition of “Moderate-Income” (50% – 100% of Area Median Income) than HUD’s Location Affordability Index, and they find metro Atlanta to have the sixth worst affordability among the 25 largest metros for “moderate-income” households.
- The Census Bureau measures the percent of households that spend more than 30 percent of income on housing costs and reports data for both owner costs and renter costs. Using this measure, Clayton County has the lowest income in the 20-county region and the highest percentage of households spending more than 30 percent of income on housing costs.
- Renters fare badly in almost every jurisdiction in metro Atlanta, spending at least half of their income on housing costs. The National Low Income Housing Coalition publishes Out of Reach, which evaluates the wages needed to afford rental housing at Fair Market Rate. In many of the region’s counties, at least 60 percent of renters cannot afford a two-bedroom apartment (i.e. they spend more than 30 percent of their income on housing costs).
Looking at these different metrics, then, is metro Atlanta an affordable place to live? The answer truly is complicated. But here are some things we can infer from the data:
- Metro Atlanta home prices and values are relatively low when compared to other metro areas. But cost-of-living plays a role in these rankings. Metro Atlanta has a low cost-of-living, so we should expect lower home prices compared to higher cost-of-living metros.
- At the neighborhood level, affordability is determined by multitude of factors, including simple supply and demand near job centers. In the Atlanta region, many of the largest employment centers also have some of the region’s most expensive housing.
- Transportation plays a key role in assessing overall affordability. Often, the most affordable housing options are located far away from key job centers. When transportation costs are added to the cost of a home in the suburbs or exurbs, housing becomes less affordable, particularly for lower- to moderate-income households.
- Renters have a particularly hard time finding affordable options throughout the region. In many jurisdictions, particularly poorer exurban counties, living in an average-priced two-bedroom apartment consumes more than 60 percent of the average renter’s income, and that does NOT factor in increased transportation costs.
Overall, it’s important to understand the role transportation costs and the distance between affordable housing and job centers can play in determining affordability for moderate to low-income families. These factors can affect the region’s attractiveness to newcomers, especially the young, creative millennials that metro Atlanta hopes to attract; the high cost of transportation, the long commutes, the lack of transportation options and the high cost of rental housing can impact their decision to choose metro Atlanta as place to live and work after college.
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