Measuring the true cost of housing: location, location, location

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It’s not just gas prices that make transportation expensive…

Yesterday, The Center for Neighborhood Technology, an SGA coalition member, along with the Brookings Institution, released a new web-based tool to measure housing affordability — by also measuring the transportation costs inherent in a home’s location. Traditionally, affordability is measured at 30% or less of a family’s income going towards housing. The new index measures housing and transportation costs as a percentage of income on a neighborhood-level basis using 2000 U.S. Census data and analysis of household transportation costs. The Housing + Transportation Affordability Index is live, and available for you to examine the true cost of housing in 52 U.S. metropolitan areas. It was released yesterday during a press conference at Brookings here in Washington, D.C.

Transportation costs are the oft-ignored component when the “expensive” housing in or near the city is compared to the “affordable” exurban housing built far away from city or regional centers. And so the moniker became “drive ’til you qualify”over the years.

In an age with worsening congestion and rising gas prices combining for escalating transportation costs, we’ve begun to grasp some of the hidden costs in the housing that appears so cheap on the surface. The research by Brookings and CNT backs up the past studies done by the Center for Housing Policy finding that even just short distances (12-15 miles) added onto a one-way commute can completely erase the savings on lower-priced homes, further from the city.

From CNT:

The traditional vision of housing affordability maintains that housing generally becomes more affordable the farther one ventures from the urban center. However, the study has found that transportation costs increase dramatically in suburban and exurban areas, due to dispersed employment, retail, and other amenities. CNT President, Scott Bernstein explains, “The index tells an alternative story of affordability than we’ve become accustomed to hearing. The real estate pages may list 2- and 3-bedroom homes for under $175,000 in suburban communities. That sounds affordable, right? But once you factor in transportation costs, the bargain goes away.”

So how do we ensure more affordable housing — housing that doesn’t result in huge chunks of a family’s budget going into excessive transportation costs? On the Urban Land Institute blog (The Ground Floor,) ULI’s Jamie McAfee beats us to the punch on on suggesting a logical remedy:

According to research presented in Growing Cooler: The Evidence on Urban Development and Climate Change, a new book from ULI, shows a concerted push for compact development would produce a decline of 12 to 18 percent in total metropolitan vehicle mile traveled by 2050. The best ways to reduce vehicle travel is compact development: building places in which people can get from one place to another without driving — mixed-use developments in pedestrian-friendly settings.

Check out the Housing + Transportation Affordability Index from the Center for Neighborhood Technology.

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