Housing + Transportation Index

The Chicago based Center for Neighbourhood Technology is changing the way we look at housing affordability in American cities.  Traditionally, one would base the affordability of housing in a neighbourhood on the percent a family spends on their housing.  A neighbourhood in which the average family spends 30% or less was deemed affordable.    However, the Center for Neighbourhood Technology is redefining how we look at affordability.   The new measure of affordability takes both housing and transportation into consideration.   With the new measurement of affordability, a neighbourhood in which the average family spends 45% or less on housing and transportation is considered affordable.  While one might expect that roughly the same number of American neighbourhoods would be considered affordable under both scales of affordability, the rather alarming part is these numbers are not even close.

Under the old measurement, 69% of U.S. communities are considered affordable.  However, shockingly, by factoring in both housing and transportation, that number shrinks to 40%.  Does anyone else find this down right scary?  Less than half of American neighbourhoods are considered affordable.

One might automatically blame the high transportation costs for such a decrease in affordability.  But it seems to be more complex than that.  For instance, traditionally, the farther one travels from the center of the city, the cheaper the housing costs.  Yet, moving away from the center of a city means that the transportation costs increase, perhaps more rapidly than the housing prices decrease causing an imbalance.

However, this blog post suggests that there is good news to all of this:

The good news is that many federal policymakers understand the impact of transportation on land use, housing, environment and affordability.  First, a new partnership between USDOT, EPA and the Dept. of Housing and Urban Development to coordinate and invest in sustainable development is included in President Obama’s 2011 budget.   Second, Senator Dodd (D-CT) and Representative Cohen (D-TN) have both introduced livability bills that would establish offices of sustainability in HUD and DOT that would provide competitive grants for transit-oriented development projects throughout the country.  Third, the next federal transportation bill could provide even more funding and incentives to increase transportation choices and greater proximity between housing, transit and jobs.

To learn more about the Housing and Transportation Affordability Index, you can check out their site: Housing and Transportation Affordability Index.