The real estate industry deals with the cost of housing every day. The ratio of income to housing costs is a key factor in almost every transaction that needs financing. When we talk about affordability, we're usually referring to the bottom line house payment. If we're in a comprehensive discussion, we'll include insurance, property taxes, and other predictable costs. I'd like to propose that we add transportation to the discussion.
A "housing + transportation" website is factoring in not just house financing costs, but adding a dollar value for the cost of transportation. It's not an accurate site in the sense of giving you specific values, but it's an interesting window into the percentage of household budgets that gets consumed for "housing + transportation" in 337 metropolitan regions. The site is from the Center for Neighborhood Technology, so they have naturally created a site that makes the cost of driving long distances an important factor in affordability. There are lots of advantages to walkable communities and urban living that don't get included when people are looking only at the cost of a mortgage. Looking at some of the costs of suburban transportation costs can help make a more informed pool of buyers.
I'm suggesting this site, not because I think they have gotten the numbers exactly right, but because the general principle of considering overall costs, including transportation and energy, provides important information for buyers. Some of you will clearly be surprised by how much transportation costs hurt housing affordability. Fortunately, in most areas, there are neighborhoods that are affordable even when you include transportation costs. If you're working with buyers at the limit of their housing budget, you may want to steer them to the areas with the lowest transportation costs.
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