Understanding Affordability to Improve Resiliency: Linking Housing Costs, Transport Costs and Foreclosures

Ann Hartell

ERES from European Real Estate Society (ERES)

Abstract: Purpose - As mobility is inextricably linked to housing location, the relationship between transport costs and housing costs is a component of neighborhood-level economic condition and resiliency. A number of studies and policy tools have mapped combined transport and housing costs, but these largely rely on affordability thresholds of income-to-housing costs developed in the 19th century (Hulchanski). For example, the Housing + Transportation (H+T) Index displays location costs and defines neighborhoods above the thresholds as 'unaffordable' (CNT). Notably, the H + T Index and similar analyses do little to link these costs to neighborhood outcomes.Methodology - This study seeks to address this gap by using a regression model to evaluate the joint effect of housing costs and vehicle ownership costs on foreclosure rates.Findings and Limitations - The model reveals that both vehicle costs and housing costs are important factors in neighborhood-level foreclosure rates. In interpreting the results of the analysis it must be kept in mind that it is relevant for the neighborhood level not the household level, having some degree of aggregation. Further, high transport costs may be indicative of other spending behaviors that are the actual factors in increased foreclosure rates. Despite these limitations, the finding that transport costs are an important influence on foreclosure rates raises questions about what the true affordability ratio is for housing, and whether high housing prices and nontraditional mortgages can fully explain the dramatic rise in foreclosures.Value - The study has value for regional planners, providing evidence that transport planning and programs are an important component of neighborhood-level economic conditions, thus lending support to integrated programs. The findings can also help refine definitions of affordability so as to better align programs with policy goals. For the transport sector, the model could be used to assess benefits and costs of potential transport investments. For housing developers, the analysis suggests that marketing messages highlighting affordability could be enhanced by including information about transport costs.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2013-01-01
New Economics Papers: this item is included in nep-tre and nep-ure
References: Add references at CitEc
Citations:

Downloads: (external link)
https://eres.architexturez.net/doc/oai-eres-id-eres2013-68 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arz:wpaper:eres2013_68

Access Statistics for this paper

More papers in ERES from European Real Estate Society (ERES) Contact information at EDIRC.
Bibliographic data for series maintained by Architexturez Imprints ().