The cost of housing and transport

Published in The Freeman (Philippine Star), November 7, 2017

A few years ago, we wrote about the cost of transportation. But that was from the point of view of fare-setting, for our public transportation. Today, we try to look at this cost of both housing and transportation, from the point of view of a family, and how much it impacts the family income. This is in consideration of our previous two columns which delved on poverty, inequality, and democracy.

What is significant about the family expenditure in housing and transportation is that it actually is the biggest cut out of the family income, or if not, second only to food consumption. However, when we look at its percentage share of the total income, the figure varies much across differing income groups, but with a consistently increasing burden for the poor. And this is even considering that below certain income level groups, there are no income being invested (which produces more income). For the poorest of the poor, sometimes, the cost of housing and transportation exceeds 50 percent of their total income. A figure less than this is already considered an overburden. As income levels increase, the share of housing expenditures becomes less. For the very rich, this may drop to even five percent, muted only by the tendency to buy expensive cars.

Traffic in Cebu (lifted from Cebu Daily News/photo by Junjie Mendoza)

Thus, for a government to exemplify the basic tenets of democracy, emphasis must be placed on the distribution of resources to enable the less-privileged to avail of both inexpensive housing and affordable transportation. But there are apparent needs for readjustment of existing policies in both sectors. In the case of housing, the existing assumption of security of tenure has made housing provision both difficult and expensive for the poor, for whom housing rental systems might be more affordable. We want the poor to have housing, but we don’t want them to remain poor, however. Once the income levels develop, they transfer to better housing, leasing out their originally government-issued units. They earn of course, but at the expense of those poorer than them. If the government rents out housing in the first place, it can provide services to more families than what is possible today, at a lower cost.

But until government considers the possibility of rental housing provision, we’re stuck with the existing framework of housing for ownership which comes at a high price. Another possibility for improvement would have been to lower construction cost by designing multi-level housing but prevailing preference of beneficiaries is still heavily leaning towards ground-level affairs, two floors at the most. There is dire need for advocacy and educational campaigns on the merits of both multi-level housing and rental homes. The sooner we shift towards these two paradigms, the easier and faster we can provide for the poor.

HDB Flats in Singapore (photo lifted from remembersingapore.wordpress.com)

Equality in democracy does not stop at giving each equal shares of the fruits of development. It means giving more to those who needed the most. It is access to the means to be productive that will enable them to rise from poverty. And housing and transportation are the two sectors they need help the most. (next: the cost of transportation)

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