Green Industry Articles
Home Affordability: A True Measurement
Real estate practitioners and others who promote mixed use developments have long touted the livability and benefits of walkable, compact neighborhoods that provide easy access to public transit, jobs and stores, and entertainment.
A new study attaches even greater benefits to such environments by assessing the effect that transportation costs have on neighborhood affordability.
The Chicago-based Center for Neighborhood Technology's Housing + Transportation Affordability Index examined 337 metro (161,000 neighborhoods) areas across the country to assess neighborhoods' affordability by considering transportation costs associated with those locations.
The H+T Index and an accompanying report, Penny Wise, Pound Fuelish, show that once transportation costs are factored into housing costs, only two in five American communities actually are affordable for typical households.
The study notes that in an effort to bring the American dream of homeownership to greater numbers, growth has reached out to spots with low land costs.
The result has been sprawling, single-use developments in suburbs and exurbs, where running daily errands, getting to jobs and schools require driving.
Authors of the study call it momentous because it sheds light on the hidden costs of living in car dependent areas.
Among the findings:
• Conventional measures indicate that 69 percent of U.S. communities have average housing costs that are considered affordable to typical households. But include transportation costs and that figure drops to 40 percent, CNT's study finds.
• Transportation costs have grown over the last century from 2 to 3 percent of income to 15 percent under the best of circumstances. Some are as high as 28 percent in some parts of the country. This price escalation is directly related to decentralized, low-density development patterns.
• Although cities generate more carbon dioxide per acre than less dense suburban and exurban communities, their compact, mixed-use urban neighborhoods generate nearly 70 percent less greenhouse gases per household for travel than their suburban and exurban counterparts.
• By 2030, the U.S. is expected to add 92 million people in total or 27.9 million households in metro areas. If these new households could reduce their average car ownership by half a vehicle per household below the country’s current average of 1.6 and if existing
households could reduce average car ownership by a quarter vehicle as a result of retrofitting existing neighborhoods and building more transit to serve them, U.S. metro areas would see an infusion of more than $200 billion in aggregate transportation savings per year by 2030.
See how the study measures housing affordability of specific areas of the country. Read Penny Wise, Pound Fuelish.
Green REsource Council Newsletter, May 2010