Transportation and Fair Housing Part 2: Consider Transportation Cost to Make Fair Housing Practical
The H+T Index should be used to site affordable housing, because it can identify which high-opportunity areas also are truly affordable in terms of transportation costs.
By Scott Bernstein Posted on March 29, 2011
Average Annual Transportation Costs in Neighborhoods with IHDA Developments (80% AMI Household) Illinois Housing Development Authority, Center for Neighborhood Technology
Employment Access and Household Transportation Costs Center for Neighborhood Technology
The Center for Neighborhood Technology’s Housing + Transportation (H+T) Affordability Index provides an enhanced understanding of housing affordability by revealing the transportation costs of a given location and adding those costs to location-specific housing expenditures. In addition to helping house and apartment hunters make more informed decisions about where to live, this tool can help policymakers choose where to invest scant public dollars, particularly when siting affordable housing developments.
We agree with Philip Tegeler that using the index “in the way he has described”:http://www.shelterforce.org/article/2174/we_need_a_better_measurement_of_opportunity/ could hinder fair housing goals. However, we believe fair housing metrics and the index can be used in tandem to better disclose access to opportunity and true affordability. Recent analysis by CNT of the Illinois Housing Development Authority’s affordable housing sites in the Chicago area and analysis of data directly from the index offer real-world examples that bear out this thinking.
CNT’s commitment to creating sustainable, livable cities has always included making housing more affordable. The traditional measure of affordability—inside and outside of housing policy circles—begins and ends with the cost of housing. If a household spends 30 percent or less of its income on a house or apartment, it is considered affordable. Yet, the transportation costs associated with a house or apartment are rarely transparent to families or policymakers and can be significant, equaling or even exceeding outlays for shelter.
Nowhere in current information sources is this hidden cost of location disclosed—not in the U.S. Dept. of Housing and Urban Development’s Fair Market Rent measure, not in rental or housing listings such as the Multiple Listing Service, and not in standard housing affordability indices published by HUD. Because relative transportation costs are in large measure a function of specific location, and transportation is overall the second largest household expenditure, this exclusion is a serious omission on both fair housing and consumer protection grounds.
CNT set out to fill this information gap in 2006 by quantifying transportation costs by location in the H+T Index. The index demonstrates how living in a compact, walkable, transit-connected neighborhood can lower a household’s expenses and its environmental impact. It also offers a more comprehensive definition of affordability: that combined housing and transportation costs should not exceed 45 percent of household income. Under the traditional affordability definition, 7 in 10 neighborhoods in U.S. metro areas are affordable. Under our new measure, only 4 in 10 neighborhoods are.
These costs and their underlying data have been constructed and disclosed for all 161,000 Census block groups in U.S. metropolitan regions, using 2000 Census data. The index will be updated this year using the new 20052009 American Community Survey five-year data and expanded to include areas within micropolitan regions.
CNT has continually tested and refined the index and believes it can be a useful tool for policymakers in deciding where to invest scarce resources, such as those dedicated to the creation of affordable housing. We believe that the transportation costs revealed by the index, used in coordination with traditional fair housing metrics described in Philip Tegeler’s article, can ensure that access to opportunity is truly affordable.
Scott Bernstein is founder and president of the Center for Neighborhood Technology.