The Burden of Transportation Costs on Housing Affordability: Report

Oftentimes, when the idea of home affordability is calculated, the focus is on the monthly mortgage payment, and how to bring that particular number down through a modification or refinancing.

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One report, _Losing Ground: The Struggle of Moderate-Income Households to Afford the Rising Costs of Housing and Transportation_, assessed the burden of housing expenses combined with transportation costs to offer a more comprehensive view of what defines housing affordability.

The report was the result of a partnership between the ""Center for Housing Policy"":http://www.nhc.org/ and ""Center for Neighborhood Technology"":http://www.cnt.org/ and measured housing and transportation costs of moderate income households living in the 25 largest metro areas.

Overall, research results found moderate-income households, or households earning 50 to 100 percent of the median income of their metropolitan area, spent 59 percent of their income on housing and transportation costs in 2010. Housing costs generally included mortgage payments, property taxes, home insurance, utilities, while transportation encompassed car payments, insurance, maintenance, and gas. The overall figure also consisted of renters, homeowners with a mortgage, and mortgage-free homeowners.

When assessing moderate-income homeowners who still have a mortgage, housing and transportation costs accounted for nearly 72 percent of income on average. A typical moderate-income renter had a lesser burden of 55 percent.

The study also revealed that places with cheaper housing aren't necessarily the most affordable.

Houston, for example, ranked 8 out of the 25 areas examined when looking at housing costs as a share of income. But, when transportation costs were included, Houston ranked 17. On the other hand, least affordable places for housing such as San Francisco, Boston, and New York became among the most affordable when housing and transportation costs were considered together.

When combining housing costs and transportation for moderate-income households, Washington D.C. was ranked as the most affordable, followed by Philadelphia, Baltimore, Minneapolis, Boston, San Francisco, Pittsburgh, St. Louis, Denver, and New York.

The study also revealed housing and transportation costs rose faster than income during the 2000s. For example, from 2000-2010, housing costs rose 52 percent and transportation 33 percent, while household income rose 25 percent.

The study made several suggestions for state and local governments to make the cost of housing more bearable.

One suggestion was to preserve existing and affordable homes near job centers, public
transit stations, and ""location-efficient areas,"" or places where transportation costs are low.

Other suggestions were to have regulatory reforms that reduce the cost of creating new housing in
location-efficient areas, create incentives or requirements to include affordable housing within new development in location-efficient areas; and improve transit service and walkability for compact areas where housing prices are already relatively affordable.