Housing-Transportation Cost Trade-off Implications for Urban Sprawl

Conventional wisdom suggests that as urban areas sprawl, transportation costs and travel times increase.  When urban areas expand in territory, densities commonly decrease and land uses are spread over a larger area.  This has an effect on travel behavior and particularly mode choice.

Questions remain, however, on the effect of low densities on travel time.  In low density areas, low congestion levels may lead to higher travel speeds that counteract shorter distances in high-density neighborhoods.  Travelers may also adjust their behavior by chaining more destinations together, resulting in more efficient travel and thereby decreasing overall travel time (Sen, 1998).

More importantly, the consequence of travel behavior in high versus low density communities on the household budget is a fundamental question that deserves periodic re-examination.  In low density areas, residents may not spend any more time on travel but their out-of-pocket costs may be higher.  This may be attributed to the fact that on average they have more household vehicles than residents of high-density communities.  In low density neighborhoods, residents may also enjoy lower homeownership costs and therefore have more discretionary resources to direct toward travel and vehicle acquisition.


Principal Investigator(s):

Dr. Siim Sööt


Dr. Siim Sööt

Brendan Dodge-Hayakawa




The purpose of this report is to examine the transportation costs of sprawling places in the context of the housing-transportation cost trade-off.


The line of reasoning within this study stems from the housing-transportation trade-off.  The proposition is that households have a portion of their budget that they allocate to the sum of housing and transportation costs.

Expected Results or Products:

Specifically, the focus of the study is on the extent to which low densities contribute to high transportation costs so that the combined transportation and housing costs in these places are greater than in higher density places.  A discussion of the relationship between travel time and residential location is also included.

An examination of housing and transportation expenditures in large metropolitan areas provided insight regarding these questions:

  1. Whether the higher costs in suburban areas are a burden on household finances.
  2. Or, whether it is the consequence of households making a decision in the context of the housing-transportation costs trade-off.

There is evidence that transportation costs may be a higher burden to households living in sprawling urban areas in contrast to more compact urban areas.  There is no doubt that commuting costs are high in places where jobs are distant.  In many of these situations, however, the lower housing costs offset the higher transportation costs.


Download the report


P.S. Sriraj
Urban Transportation Center
University of Illinois at Chicago
412 South Peoria Street, Suite 340
Chicago, IL 60607
Voice: (312) 413-7568
Fax: (312) 413-0006
Email: sriraj@uic.edu


Metropolitan Transportation Support Initiative (METSI)