![]() ![]() Policymakers concerned with housing affordability, for example, can use this more holistic concept to formulate policy responses, as well as to better understand the magnitude of the challenge for different households and how that compares with peer cities. For example, it can help a family that is considering moving to a different city with lower housing costs better account for the total cost of living by reflecting both transportation costs and income. Analyzing housing and transportation costs as a share of income facilitates comparisons across cities, which is beneficial both for families and policymakers. What is Location Affordability?Ī city’s location affordability depends on three factors: the cost of housing, the cost of transportation, and income. High housing demand in relation to slow housing production and the Metropolitan Transit Authority’s (MTA) fiscal and operational woes may increase costs and negatively affect New York City’s location affordability competitiveness. However, New York City’s competitiveness may be at risk. New York City currently ranks reasonably well among peer cities, with low transportation costs offsetting high housing costs. New York City is relatively more affordable for lower income households among peer cities, but costs for these households are still unaffordable.Fifteen of the cities are considered unaffordable for the “median household,” which spends more than 45 percent of its pre-tax and pre-transfer income on housing and transportation and.Combining housing costs, transportation costs, and income, New York City is the 8 th most affordable city of 20, with the “median household” spending 45.3 percent of its income on housing and transportation.Median annual household income in New York City is $69,211-the 8 th highest household income of the 20 cities.Transportation costs in New York City are least expensive among peer cities, with the “median household” spending $832 a month, or 14.4 percent of its income, on transportation ![]() Housing costs in New York City rank 5th most expensive of 20 competitor cities, with the “median household” spending $1,778 a month, or 30.8 percent of its income, on housing.The Citizens Budget Commission (CBC) compared data of housing and transportation costs as a percentage of income collected by the Department of Housing and Urban Development (HUD) for different types of households in 20 peer cities with the largest economies in 2016, and found that: This location affordability measure can be used to compare different cities’ affordability for various households. A location’s affordability is best understood as the portion of a family’s income devoted to housing and transportation. While housing is the largest share of spending for most households, a more robust picture of affordability also should include transportation costs, since they generally are the second largest share and represent a significant portion of household spending. (A Gini coefficient is a standard measure of income inequality that summarizes an entire distribution in a single number.) The degree to which transfers and taxes reduced income inequality over that same period increased.Discussions of an area’s affordability often focus on housing costs. Income inequality, as measured by the Gini coefficients for income both before and after transfers and taxes, rose between 19. Average federal tax rates fell between 19 across the income distribution, with the sharpest decline in the lowest quintile. In general, higher-income households paid a higher average federal tax rate than lower-income households. Average means-tested transfer rates, which are the ratios of total means-tested transfers to total income before transfers and taxes, rose over the 39-year period, primarily driven by an increase in Medicaid spending. Between 19, households in the lowest quintile received more than half of all means-tested transfers. Means-tested transfers are cash payments and in-kind benefits from federal, state, and local governments designed to assist individuals and families who have low income and few assets. Between 19, average income, both before and after means-tested transfers and federal taxes, grew for all quintiles (or fifths) of the distribution, but it increased more among the highest quintile than among all others. Households at the top of the income distribution received significantly more income than households at the bottom. As an update to that series, this report presents the distributions of household income, means-tested transfers, and federal taxes between 19 (the most recent year for which tax data were available when this analysis was conducted). The Congressional Budget Office regularly analyzes the distribution of income in the United States and how that distribution has changed over time. ![]()
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