05 April 2010

Car Costs Make Housing Unaffordable

The Not-So-Affordable Neighborhood
Three out of five U.S. communities are too pricey for the average American when transportation costs are considered, according to a new study.

Even with market corrections bringing the cost of homes down in recessionary times, the United States remains in the midst of an affordable housing crisis. And a new study by the Chicago-based Center for Neighborhood Technology (CNT) illustrates just how bad it may be.

Some 48,000 American communities that are currently considered affordable to those making the median family income may actually not be affordable when you factor in the transportation costs necessary for homeowners to get to work, school, and the other locations that shape their daily lives. The study, “Pennywise and Pound Fuelish,” examined housing costs in 337 metro areas nationwide, which collectively are home to 80% of the U.S. population.

“The [current definition of affordability] does not take into account the almost equal cost of transportation, which can effectively double the cost of housing,” said Scott Bernstein, president of the Center for Neighborhood Technology, during a March 23 media briefing. Transportation costs can range from 12% to 32% of household income, he said, depending on the location.

To this end, CNT has parlayed the study data into a new interactive mapping tool that allows users to get ultra-granular in charting cost-of-living calculations by place. The Housing + Transportation Index contains data on 161,000 neighborhoods, allowing consumers, builders, and developers to pull up average housing and transportation costs for block-by-block comparisons. The architects of this new tool hope it will help home buyers and renters make more informed decisions about where to live, thereby avoiding the risky decisions and overleveraging of assets that lead to foreclosures.
“Transportation planning in the United States needs to be recalibrated so that the focus is broader than merely reducing traffic congestion,” Bernstein argued. “We are now realizing that the more we expand road capacity and encourage driving, the more we are contributing to cost of housing.”
“We have crashed into our limits of 20th-century thinking, policies, and solutions. This is an issue that’s critical to the future survival of the middle class.”

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