Penny Wise, Pound Fuelish: New Measures of Housing + Transportation Affordability
American families often pursue a “drive ‘til we qualify” approach to home ownership, going further from urban and employment cores in search of affordable mortgages. This approach to home ownership comes with increased commute times, a price that many Americans are willing to pay. However, many Americans are unaware of the impact of increased transportation costs on their monthly budget. A true measure of home affordability must include housing operational and maintenance costs as well as transportation costs. However, unlike mortgage payments, families find it challenging to track their disaggregated transportation costs. Therefore, it is no surprise that most Americans only grasp the scale of these transportation expenses after buying a home. As a result, transportation costs outweigh housing costs for working families in many regions.
To provide a clearer picture of housing affordability for families and governments alike, the Center for Neighborhood Technology (CNT) has released its Housing and Transportation (H+T) Affordability Index containing data for 337 metro regions and 161,600 neighborhoods in the U.S. Based on its research, CNT recommends that the traditional definition of housing affordability, which is 30% of income, should be replaced by the H+T benchmark of 45% of income (i.e., 30% for housing and 15% for transportation). When both housing and transportation costs are factored, the number of affordable communities in the U.S. shrinks by 30%, eliminating 48,000 communities containing 25.9 million dwellings where the typical resident can afford to live.
Sustainability Officers can use CNT’s analyses to make the case that compact, walkable, mixed-use communities with convenient access to public transit and employment centers, which initially appear expensive because of higher housing costs, are often more affordable than less dense exurban communities because of decreased transportation costs. Given transportation’s impact on housing affordability, Sustainability Officers can advise region leaders to plan for and accommodate growth that will preserve affordability at the household level and sustainability at the regional level.
