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Transportation and the Housing Crisis: Are They Related?

Paul Metaxatos, Joseph Dijohn and Siim Soot

No 207606, 50th Annual Transportation Research Forum, Portland, Oregon, March 16-18, 2009 from Transportation Research Forum

Abstract: The role of transportation in shaping urban form has been extensively studied. The conventional wisdom is that transportation systems, especially expressways, are contributors to sprawl. However, there is not universal agreement on this point. The issue centers around the level of importance, not whether transportation has any affect. Still transportation is commonly associated with increased housing on the periphery of metropolitan areas and high homeownership rates. There is little doubt that sprawl is closely associated with home ownership. Metropolitan areas that can and have recently sprawled have very high homeownership rates such as Indianapolis, Cleveland and Detroit. There is also credible evidence that sprawl is more a function of prosperity and household formation than the development of the transportation system, such a radial expressways. After more than a decade of increases, in recent years the national homeownership rates have declined and the association between transportation and housing has become of greater interest. Nationally homeownership rates hit a peak in early 2004 and are now at the same levels as the first half of 2001. During this period, the homeownership rates have changed considerably among the major metropolitan areas, as have transportation statistics. These measures have increased in some metropolitan areas and decreased in others. This study investigates to what extent there is an association between transportation (portrayed by a number of highway-related measures) and the housing crisis measured by foreclosure rates for the 47 largest metropolitan areas. For many of these variables we also examine the growth (change) in these variables since 2000. While it is well known that the economy plays a major role in foreclosure rates (measured by unemployment rates) what is the role of total metropolitan vehicles miles traveled (VMT), per capita VMT, number of roadway miles, population density, and homeownership rates? Using metropolitan-level data from 2000 to 2007 this study finds an association between the use of the transportation system and the magnitude of the housing foreclosure problem in metropolitan areas. As expected we find that foreclosure is positively related to high homeownership and unemployment rates – both 2006 data. Equally important is the association with transportation variables. There are negative relationships with roadway miles; both the per capita number of roadway miles in 2000 and the increase in roadway miles from 2002 to 2006. This suggests that the addition of roads has not been detrimental to home ownership. At the same time there is a positive relationship between foreclosure rates and number of miles driven (VMT) – as VMT increases from 2002 to 2006 so does foreclosure. This may suggest that (1) transportation costs divert resources from being applied to housing or (2) possibly high VMT is related to overextension of the suburban growth that attracted firsttime buyers that over reached their resources. Clearly these are not direct interpretations and require more research. All of the variables cited have relationships that are statistically significant with foreclosure rates. In sum they suggest that standard non-transportation variables are important but the DiJohn, Metaxatos and Sööt: Transportation and the Housing Crisis: Are They Related? 2 empirical evidence here also points to an association with highway use (VMT) but the existence of highways and their expansion are not positively associated with foreclosure.

Keywords: Research and Development/Tech Change/Emerging Technologies; Resource /Energy Economics and Policy (search for similar items in EconPapers)
Date: 2009-03
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DOI: 10.22004/ag.econ.207606

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