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Appendix: Case Study Profiles

15. National - Housing + Transportation Affordability Index

Funding Sources and Amounts: A series of private and nonprofit groups, including The Brookings Urban Markets Initiative, The Energy Foundation, Grand Victoria Foundation, The Joyce Foundation, Center for Housing Policy of the National Housing Conference, MacArthur Foundation, McKnight Foundation, Nathan Cummings Foundation, Rockefeller Foundation, Searle Funds at the Chicago Community Trust, Surdna Foundation, and Wallace Global Fund.

Years: 2006–present

Agencies/Organizations Involved: Center for Neighborhood Technology (CNT), Center for Transit Oriented Development (CTOD), and The Brookings Institution's Urban Markets Initiative.

Geographic Area: The first phase examined the variables that inform housing and transportation costs in St. Paul/Minneapolis, MN. As of July 2009, the Housing + Transportation Affordability Index is equipped with data from more than 330 metropolitan areas and 80 percent of the U.S. population.

Problem to Be Addressed

The problem to be addressed is identifying a more realistic understanding of transportation costs when determining housing affordability. Community planning often does not take transportation costs into account when determining affordability of housing.

Objectives of Project

The goal of the project is to calculate the true affordability of a home based on its market value and the transportation costs incurred by its location. CNT aimed to develop a Housing and Transportation Index that could help policymakers determine where local financial resources are most needed to improve transportation affordability.52 The project will help TOD planners better advocate for"location-efficient growth."

Summary of Project

CNT, along with CTOD, developed the Housing + Transportation Affordability Index in 2006. The first phase of the index analyzed characteristics from the St. Paul/Minneapolis area to incorporate transportation costs into overall housing and location affordability. Since 2006 the index has been expanded to analyze data from more than 330 metro areas throughout the United States.53

Type of Funding Used for Project / Plan

A series of private and nonprofit groups, including The Brookings Urban Markets Initiative, The Energy Foundation, Grand Victoria Foundation, The Joyce Foundation, Center for Housing Policy of the National Housing Conference, MacArthur Foundation, McKnight Foundation, Nathan Cummings Foundation, Rockefeller Foundation, Searle Funds at the Chicago Community Trust, Surdna Foundation, and Wallace Global Fund.

Population Served and Modes Served

St. Paul/Minneapolis-area residents and U.S. residents; all modes.

Project Details

Housing and Transportation Costs

Usually housing is considered to be affordable if it accounts for 30 percent or less of a household's monthly budget, but transportation costs rarely play a large enough role in considering these costs. In fact, transportation in many instances is the second largest household expense.54 "Nationally, transportation is the second largest household expenditure after housing, ranging from less than 10 percent of the average household's expenditures in transit-rich areas to nearly 25 percent in many other areas. Based on calculations using the 2003 Consumer Expenditure Survey, we estimate that the average U.S. household spends 19 percent of its budget on transportation. Transportation costs also vary widely by neighborhood. Generally speaking, housing is relatively less expensive in areas that lack new investment or that are farther from the central business district, while household transportation costs increase as one moves farther out from urban centers."55

Housing + Transportation Affordability Index

CNT, along with support from CTOD, created the Housing + Transportation Affordability Index to more accurately address the role of transportation costs in terms of housing affordability. The innovative tool measures location efficiency - a term described by CNT as "compact neighborhoods with walkable streets, access to transit, and a wide variety of stores and services" - in essence, an area that requires "less time, money, and GHG [greenhouse gas] emissions for residents to meet every day needs."56

CNT's index began with an evaluation of housing and transportation costs in the St. Paul/Minneapolis region. It evaluated a variety of factors to determine affordability, including households per residential area, average block size in acres, transit connectivity, job density, average commute time, household income, and workers per household. CNT created maps of various U.S. cities to show what an affordable area looks like when transportation costs are considered, and what it looks like when they are not. CNT reported that for every dollar a household spends on housing, it spends an additional 77 cents on transportation, so it's clear that the definition of an area's affordability changes when transportation costs are factored in.57

Based on findings from various city analyses, CNT has developed certain targets that can be used when implementing community development. They suggest considering housing and transportation together during neighborhood planning and encouraging redevelopment of inner city and older suburban neighborhoods. They also promote reducing the costs of commuting by car, preserving transportation choices within the community, and revisiting current policies and incentives. Increased focus on these policies combined with the realization that transportation plays a large role in location affordability will help local governments implement effective community planning strategies.58

Livability Principles Promoted by Project

Promotion Livability Principles
P Increase transportation choices
F Promote affordable housing
  Enhance economic competitiveness
F Support existing communities
P Coordinate Federal policies and leverage investment
F Value communities and neighborhoods

P: Partly Supports
F: Fully Supports

Challenges

  • How to increase use of mass transit in existing communities. How to encourage efficient use of personal vehicles for those who do not use the mass transit system.
  • How to divide resources among communities with varying degrees of existing transportation systems.
  • How to balance options to accommodate consum-ers who prefer housing over transportation needs and vice versa.
  • How to accommodate the needs and preferences of various income levels into the communit's trans-portation services

Successes

  • The index received much attention from policymakers for its benefits to planners and TOD advocates, and served as the basis for several additional research projects.
  • CNT recently expanded the Housing + Transportation website to include two views of urban GHG emissions associated with household auto use.

Perspectives on Implementing the Project and Its Impacts

Project Status

As of early 2010, the status of the project is as follows:

As funding continues, CNT will continue expanding the index to apply to more metro centers throughout the United States. As of July 2009, the index is equipped with data from more than 330 metro areas and 80 percent of the U.S. population.

Applicability of Lessons Learned to Other Projects or Challenges

Development of the affordability index resulted in identification of the following issues to consider when implementing community transportation policies59:

Roles of MPOs / DOTs and Policy / Plan Outcomes

"Federal agencies are testing new strategies to resolve the serious economic, environmental and development challenges that the nation faces. Acknowledging that these challenges require comprehensive solutions, HUD, USDOT, and the Environmental Protection Agency (EPA) have formed an interagency partnership capable of integrating housing, transportation, and land use policy to achieve affordability, competitiveness, and sustainability.

More critical still, the U.S. Congress is beginning to formulate the broad framework of our countr's next transportation bill just as the H+T Index becomes universally available for metropolitan areas. The H+T Index can be indispensable in assessing whether America's housing and transportation investments will lead to a reduced cost of living for more Americans and more sustainable development for metropolitan areas."60

For More Information

Sources and Other Resources:


52 http://www.cnt.org/repository/AffordabilityIndexBrief.pdf

53 http://htaindex.cnt.org/model_summary.php

54 http://www.cnt.org/repository/AffordabilityIndexBrief.pdf

55 http://www.cnt.org/repository/AffordabilityIndexBrief.pdf

56 http://htaindex.cnt.org/

57 http://htaindex.cnt.org/model_summary.php

58 http://htaindex.cnt.org/model_summary.php

59 http://www.cnt.org/repository/heavy_load_10_06.pdf

60 Penny Wise, Pound Fuelish, http://www.cnt.org/repository/pwpf.pdf

Updated: 01/03/2014
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