Families who choose the right neighborhoods have been shown to save real money

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The neighborhood you live in can have a huge effect on your ability to spend or save, do the kind of things you really want to, and navigate the ongoing economic crisis. The chart below, from a new report by The House Democratic Livable Communities Task Force (via Grist) shows the real financial consequences for American families that stem from living in three different kinds of neighborhoods.



The average American family spends roughly a third of its income on housing and another 19 percent on transportation, leaving just a little less than half for everything else. Families living in especially sprawling, auto-dependent suburbs devote six percent more of their income to transportation. But families living in "mobility-option" neighborhoods--those with transit options and walkability--can reduce their transportation costs to just 9-16 percent less than families in auto-dependent neighborhoods and 10 percent less the typical American family.

The study highlights the role that neighborhood choice can play in changing a family's financial picture:

In the long term, individuals can reduce their transportation costs by choosing residential locations with flexible transportation choices, including transit and services within walking distance. Families that live near work places, schools, churches, grocery stores, and other services, will be more apt to make their outings on foot or in combined short car trips. Households located within transit accessible neighborhoods take fewer vehicle trips overall--about 25% fewer according to the National Personal Transportation Survey. ...households in the core of Washington DC spent 30% of household income on combined housing and transportation whereas those in the car dependent suburbs spent over 40%.



At its press conference last Thursday, Task Force Chair Rep. Earl Blumenauer (D-Ore.) noted that far too many Americans have too few options:



Unfortunately, about half of the American population doesn't have an environment that they live in that provides those choices. Too much of America is dependent on a pattern that imagines that we will always have an unlimited supply of inexpensive gasoline, and government policies in housing, in road transportation, reinforce that.



These findings mirror those of a 2005 study by Statistics Canada, which tracked the spending patterns of Canadian families across nearly two decades, 1982 to 2001, before the onset of the crisis (and before the housing bubble burst). One key difference between spenders and savers, the study noted, was car expenses. By 2001, spenders were devoting a staggering 54 percent more of their incomes for car expenses than savers were--which was often enough to push them into the red. They dished out more for housing as well. The days of gas guzzlers and endless commutes to McMansions are over for most families who desire a more financially secure and meaningful future.