The New DOT/HUD Partnership That Will Influence Your Green Investments

 

Uncle Sam is drilling down on the hidden costs of poor transportation options, high transportation costs and lack of access to affordable housing — which means that (sooner or later) real estate investors who want to stay relevant in their communities will be doing the same thing, if they haven’t started already.

Case in point:

The US Department of Transportation and US Department of Housing and Urban Development announced a new task force on community sustainability that will attack the interrelated problems of energy costs, transportation options and housing affordability.

We’ve posted before about the fact that most of us real estate professionals, despite being consumers ourselves, are not aware of the extent to which fuel prices, long commutes, lack of transportation options and lack of access to affordable housing erode the finances of tenants in our properties, their employees, not to mention community viability.

The announcement points out that the average working American family spends nearly 60 percent of its budget on housing and transportation costs.

And we posted awhile back about Ken Rosen’s comments on these topics:  US consumers have been “importing” higher inflation than domestic US levels. Low income individuals are particularly affected, paying 7%-10% inflation rates due to their exposure to fuel and food price increases combined.

Interesting is a snippet within the announcement, which deals directly with the “business case” argument for American families:

[The HUD/DOT task force will]…redefine affordability and make it transparent. The task force will develop Federal housing affordability measures that include housing, and transportation costs and other costs that affect location choices. Although transportation costs now approach or exceed housing costs for many working families, Federal definitions of housing affordability don’t recognize the strain of soaring transportation costs on homeowners and renters who live in areas isolated from work opportunities and transportation choices.

When we’re working with clients on their green investment strategies, we tell them to make sure they understand how project siting and design decisions affect the business case of tenants and other stakeholders. Even if the clients are not directly involved with HUD housing, the federal government’s influence (and stimulus funding) on these issues will help state and local governments highlight the same areas within their own jurisdictions.

So the task force’s scope, in so many words, becomes the new scope of real estate development when interacting with local officials. We think that the best way real estate investors can manage that enlarged scope is to make sure the interrelationship between transportation costs, access to housing affordability and community viability figure just as prominently in any sustainable project’s business case as their own.

Photo credit: Flickr/Cocoi-Urban Sprawl, Las Vegas