Understanding the Combined Cost of Household and Transportation
When looking for a place to live, the monthly rent or mortgage payment is typically of paramount concern; however, the cost to travel to work from home is often understated or not even considered. The linkage between transportation and housing go well beyond mobility. Providing transportation options where families live has important implications for overall affordability.
The Brookings Institution analyzed household costs and created an Affordability Index that used the Twin Cities as the model. In this report transportation is shown to be the second largest household cost. Nationally they found that transportation expenditures as a percentage of household costs range from less than 10 percent in transit-rich areas to nearly 25 percent in other areas.
A Transit for Livable Communities report states the average Twin Cities household spent 17 percent of its income on transportation. This is worrying enough but the report also showed that low income households spent substantially more. Households in major areas that have more extensive transit systems spent significantly less than the average. This is a lesson that should not be lost on policy makers.
The Location Affordability Index and My Transportation Cost Calculator
There is more to housing affordability than how much rent or mortgage you pay. Transportation costs are the second-biggest budget item for most households, but to date there hasn't been an easy way for people to fully factor transportation costs into decisions about where to live and work. The goal of the Location Affordability Portal is to provide the public with reliable, user-friendly data and resources on combined housing and transportation costs to help consumers, policymakers, and developers make more informed decisions about where to live, work, and invest.
The Portal features two new cutting-edge tools — the Location Affordability Index and My Transportation Cost Calculator—that illustrate from different perspectives how housing and transportation costs impact affordability. In addition to these decision-support tools, the Portal provides access to supporting resources that offer a wide range of information on current research and practice aimed at understanding, and ultimately reducing, the combined housing and transportation cost burden borne by American families.
About the Location Affordability Index
The Location Affordability Index (LAI) consists of estimates of the combined cost of housing and transportation at the Census block-group level (block groups contain 600 to 3,000 residents each). LAI data is calculated for each of the 942 Core Based Statistical Areas and covers neighborhoods where 94% of the U.S. population lives using statistical regression modeling.
Because what is affordable is different for everyone, the Index is calculated for eight different household profiles, defined by different incomes, family sizes and number of commuters. Users can search for a location by address, intersection, city, county, state or zip code. In addition, users can view housing and transportation costs combined or separately, or view costs for renters and homeowners separately.
Developers, planners and policymakers can use the Location Affordability Index to make data-driven decisions about local and regional planning and investment. They can also use maps and data tools to help communicate with the public about different development scenarios.
The goal of the LAI is to help individuals, planners, and researchers get a more complete understanding of the costs of living in a given location by accounting for variations between households, neighborhoods, and regions, all of which impact affordability.
My Transportation Cost Calculator
My Transportation Cost Calculator allows you to customize data specific to individual locational and housing decisions by entering basic information about your household's income, housing, cars, and travel patterns. The customized estimates can give you a better understanding of your own transportation costs, how much they would differ in other locations, and how much they are impacted by individual choices, allowing you to make more informed decisions about where to live and work.
My transportation calculator will allow users to:
- Calculate the combined housing and transportation costs using household characteristics and location.
- Evaluate the factors that determine housing and transportation costs, and how changes impact expenses.
- Assess the true proportion of income being spent on housing and transportation.
- Compare actual household costs with neighborhood and regional averages.
- Evaluate the full costs of a new location before moving.
Click here to learn more about the Housing and Transportation Affordability Index.
Click here to view H+T housing calculators in other regions.