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Press Release · July 26, 2004

Transportation Affordability in the Bay Area

Given the high cost of living in the San Francisco Bay Area, it stands to reason that transportation affordability would be a concern. Until recently, however, little was known about the effects of the costs of transportation for the bottom lines of local low-income households. A new study by the Public Policy Institute of California, Transportation Spending by Low-Income California Households: Lessons for the San Francisco Bay Area, sheds some new light on this important topic.

The report, authored by PPIC research fellow Lorien Rice, reveals that transportation costs represent one of the biggest budget items for most households. Overall, low- and higher-income households in metropolitan California spend about the same portion of their budgets on transportation – between 13 and 15 percent each year. Average annual expenditures among low-income households come to $2,164, while higher-income households spend an average of $6,569. Part of the reason for the dollar difference is that vehicle ownership – which is more costly than other transportation options – is higher among wealthier households.

Other Key Findings:

  • Transportation is the third-largest budget item for low-income households. Only housing and food expenditures outstripped transportation costs. For higher-income households, transportation replaced food as the second-largest budget item.
  • Low-income commuters in the Bay Area are less likely than others to drive alone… Fifty-three percent of low-income workers drive alone to work, compared to 70 percent of higher-income workers.
  • … And more likely to carpool, walk, or travel by bus. Seventeen percent of low-income workers carpool, compared to 12 percent of other commuters. Twelve percent of low-income workers and 5 percent of other commuters take the bus. Low-income workers are twice as likely as other workers to walk (7% compared to 3%). BART use is similar between groups.
  • Cost is a barrier to vehicle ownership for many low-income households in California. Among low-income households that do own vehicles, vehicle-related expenditures averaged about 19 percent of their household budgets.

The Public Policy Institute of California is a private, nonprofit organization dedicated to improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett.