The Center for Neighborhood Technology has been working on a Housing + Transportation Affordability Index for at least five years. Census block by census block, the index evaluates the cost burden, relative to area incomes, for housing and transportation on the average family living there. They released a pilot project for the Minneapolis-Saint Paul region in 2006, then expanded the analysis to major metro areas all around the country.
The index has made a big splash. It has been used to inform mortgage underwriting practices as well as regional housing public policy. Today they release data for a broader range of metropolitan areas, including the Charlottesville MSA. The newer website also allows users to break all of the data down into owners costs and renters costs, different income classes, greenhouse gas emissions, and a variety of other factors.
|Screenshot from CNT Housing + Transportation Affordability Index for Charlottesville region|
Andres Duany made the following point about affordable housing ten years ago,
"Affordable housing must be provided in a form and a place that allow for affordable living, even if it comes at a greater cost. Although land may be cheaper on the urban fringe, that location fails to provide residents with easy access to jobs and services."Working toward the availability of truly affordable living requires a coordinated effort between the various spheres that make demands on the family budget, housing and transportation being the two largest. For too long the affordability goal has been set strictly at spending no more than 30% of income on housing, a rule of thumb based not on data but on convention. (It's also migrated upward over time. No more than 25% used to be advised.)
The trouble is that the old measurement leads to a systematic bias in favor of a low-cost housing/high-cost transportation arrangement, what is known in the real estate business as "drive until you qualify." If you can't afford a home closer to jobs and services, just head outward toward the urban fringe where land costs are cheaper. Or from a policy perspective, outer suburban jurisdictions appear to be performing better on affordability goals because, strictly speaking, housing costs are relatively in line with area incomes.
In reality, transportation costs are not only substantial, about 18% of expenditures, but they are volatile and tied directly to housing choices. One gas price spike can squeeze a budget to the breaking point, and families can only cut back so much with a lifestyle tweak if they've chosen an inaccessible home location.
If housing costs are the only measurement we have to work with, it makes some sense to run with it as a rough estimation of affordability. That's why these CNT numbers are so important. Maybe some day we'll see this model shimmy its way upward into the Census Bureau or coordinated federal agencies and built into policy, like the current convention is. The State of Illinois just adopted the H+T index as a benchmark for their own agencies. The affordability index will become that much more robust and accurate to a finer grain as it evolves.
... then maybe we could start talking about incorporating affordable food access (12% of the budget) into it.
Update: Elana Schor provides a nice outline of how this index is already being used at the federal level.