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Your proximity to housing has an effect on your bottom line

Chad LamerFor many of us, a long daily commute is just a fact of life. We work for businesses located in commercial centers miles away from where we would prefer to live and raise a family.

There are a variety of reasons for long commutes, but one of the chief reasons is that housing choices near traditional commercial centers (city-central business districts) are often limited. This generalization about the lack of housing choices near traditional commercial centers does not hold true for every city in the United States, but for the majority it is an unfortunate reality.

Having just relocated from the Midwest to Boise, I can say with certainty that cities such as Boise should have a distinct advantage in recruiting businesses and highly skilled workers to the community. This is in large part based solely on the housing choices within reasonable commuting distances of the central downtown business district. What this means for businesses relocating to cities like Boise is that they can compete nationally for the best talent. In today’s marketplace, many of the most highly skilled members of the workforce weigh quality of life issues such as commuting length when considering employment choices.

What makes a quality housing choice? Probably the most important considerations for homebuyers are the safety of the neighborhood and the quality of the schools. Homebuyers in general want affordable housing that will retain its value, with walkable destinations (parks and trails), good schools, and access to grocery stores and restaurants. They also want their homes to be close to work but are willing to sacrifice this with a longer commute if they can have good schools and safe neighborhoods.

From a business perspective, anyone responsible for choosing a business’s location should consider the range of housing stock within a 15-minute commute. This is important for a variety of reasons but chiefly because it will improve the productivity of the business. Table 1 below shows a breakout of commuting times over the course of year.Table 1 commuting time

As shown below, even a five-minute, one-way commute equates to one week of lost time and productivity each year.

Table 2 commuting productivity

An employee with a 20-minute, one-way commute spends up to one month driving to work each year. Those commuting 45 minutes one-way spend a whopping nine weeks per year driving to work.

Long commuting times affect a company’s bottom line in a variety of ways. From an employee health care cost perspective, negative personal effects as a result of commuting include anxiety, depression, diminished physical activity, heart disease, obesity, social isolation and mortality, as documented by Dr. Christine M. Hoehner in the American Journal of Preventative Medicine.

Table 3 time use

Employers have additional factors to consider, such as the loss of productive work time for the company. According to the Bureau of Labor Statistics, the average work day for people ages 25 to 54 is around 8.8 hours per day. Long commuting times will likely lead to employees reducing time spent at work in order to gain additional time with family and maintain a comfortable work/life balance. For employees with billable hours (architects, attorneys, engineers, et cetera) the correlation between long commuting times and lost profitability is easy to calculate. An attorney with a billing rate of $225 per hour and a 30-minute commute could lose an estimated $28,000 in fees per year by living outside of a 15-minute commute zone.

Given these factors, businesses developing a relocation plan should add the availability of suitable housing stock as a key component of any location analysis. And communities hoping to attract new businesses should develop policies that foster the maintenance of existing housing stock and the development of new housing stock within 15 minutes of its commercial centers.

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Chad W. Lamer is an attorney and urban planner with the law firm of Spink Butler LLP in Boise. He works primarily in the areas of land use and zoning, real estate development, and construction law. He is a frequent contributor to the Idaho Land Law blog, where he touches on all topics related to the development process. Follow on Twitter @ChadLamer.

About Chad Lamer

One comment

  1. Sounds like a voice of experience after going back and forth and losing 80 min. per day yes those min. Do add up over a years time , time that you could be spending with your family or billable hours for the firm you are working for. Yes it is better to live where you work .