The Consequences of Insufficient Household Income

fees, lost rent, court costs, filing costs, and judgment costs) (Desmond, 2015; TransUnion, 2015).
The costs and consequences of foreclosure are discussed later in this section.
Strategy 2: Rent or Buy in Less Desirable Locations
Because housing costs are linked to location, ALICE households are often forced to find lower-cost housing
in less desirable areas located far from their jobs. While these areas have lower costs, they typically
have considerable downsides, such as high crime rates, run-down infrastructure, or little to no public
transportation. They are also often located far from full-service grocery stores, public services, and other
necessities.
Consequences
Unsafe neighborhoods: Neighborhoods with a concentration of ALICE and poverty-level
households often have the highest rates of crime. Property and violent crime are both concentrated
in poor communities, even moreso now than they were in the 1970s. Households with income below
the FPL are victimized at more than double the rate of high-income households (those above 400
percent of the FPL); those that earn between 100 and 200 percent of the FPL ($19,790 for a family
of three in 2014) are victimized at a rate more than one-third higher than high-income households
(Harrell, Langton, Berzofsky, & Couzens, 2014; Levitt, 1999; Harris & Kearney, 2014).
The consequences for victims of these crimes, as well as for those living in neighborhoods with
high rates of crime, are severe, compromising earning potential and physical and mental health.
Individuals who view their neighborhoods as unsafe, for example, are much more likely to suffer
from depression and substance abuse, which in turn are risk factors for cardiovascular disease
and other serious illnesses. The consequences are even more severe for children growing up in
these environments, who suffer from higher rates of behavioral disorders and lower rates of school
attendance and academic achievement (Curry, Latkin, & Davey-Rothwell, 2008; Hanson, Sawyer,
Begle, & Hubel, April 2010; Galster, March 2014).
Increased transportation costs: Many lower-cost housing units are located far from jobs and
services. ALICE families in these units may save money on rent, but their transportation costs
increase. The Joint Center for Housing Studies estimates that low-income households that spend
30 percent or less of their income on housing (presumably because they live in less expensive
areas) spend an average of $100 more per month on transportation than those that allocate over
half their income to housing. Conversely, people who live in location-efficient neighborhoods –
compact, mixed-use, and with convenient access to jobs, services, transit, and amenities – have
lower transportation costs than those who don’t. This holds for metro areas of large cities, suburbs,
and rural areas across the country (Galoustian, 2016; Tu, 2015; Rice, 2004; Belsky, Goodman, &
Drew, 2005; Joint Center for Housing Studies of Harvard University, 2016; Roberto & Puentes, 2008;
Center for Neighborhood Technology, 2016).
Longer commutes: Because 95 percent of workers do not have access to public transportation,
most workers drive an automobile to get to work. While the average American’s commute is under 30
minutes, more than 10 million Americans have a commute of at least an hour each way, with 600,000
adults commuting more than 1.5 hours each way. One analysis estimates that across the country’s
50 largest metro areas, travel time alone (without even including travel expenses) costs workers
$107 billion per year (Bliss, 2016; Taylor, 2014; Bureau of Transportation Statistics, 2015).
12 UNITED WAY ALICE REPORT – THE CONSEQUENCES OF INSUFFICIENT HOUSEHOLD INCOME