Index Offers New Way to Assess Affordability

The Center for Neighborhood Technology’s Housing and Transportation Affordability Index provides a more comprehensive way of thinking about the cost of housing and true affordability. Its creators say the Index is the only tool of its kind that examines transportation costs at a neighborhood level. It allows users to view housing and transportation data as maps, charts, and statistics for nearly 900 metropolitan and micropolitan areas—covering 89 percent of the US population.

The Index shows that transportation costs vary between and within regions depending on neighborhood characteristics. People who live in location-efficient neighborhoods—compact, mixed use, and with convenient access to jobs, services, transit, and amenities—tend to have lower transportation costs. People who live in location inefficient places that require automobiles for most trips are more likely to have high transportation costs.

The traditional measure of affordability recommends that housing cost no more than 30 percent of income. Under this view, 76 percent of US neighborhoods are considered “affordable” to the typical household. However, that benchmark ignores transportation costs, which are typically a household’s second largest expenditure. The Index offers an expanded view of affordability, one that combines housing and transportation costs and sets the benchmark at no more than 45 percent of household income. Under this view, the number of affordable neighborhoods drops to 28 percent, resulting in a net loss of 86,000 neighborhoods that Americans can truly afford. The H+T Index was developed by CNT and its partner, the Center for Transit Oriented Development (CTOD), as a project of the Brookings Institution’s Urban Markets Initiative.

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