U.S. Housing and Urban Development Secretary Shaun Donovan and U.S. Department of Transportation Secretary Anthony Foxx, today unveiled the Location Affordability Portal (LAP), a cost calculation tool that allows users to estimate housing and transportation costs for neighborhoods across the country. The LAP will help consumers and communities better understand the combined costs of housing and transportation associated with living in a specific region, street, or neighborhood and make better-informed decisions about where to live, work, and invest.
"Many consumers make the mistake of thinking they can afford to live in a certain neighborhood or region just because they can afford the rent or mortgage payment. Housing affordability encompasses much more than that," said HUD Secretary Donovan. "The combined cost of housing and transportation consumes close to half of a working family's monthly budget, and the LAP will help to better inform consumers, help them save money, and provide them with a broader perspective of their housing and transportation options."
"Transportation and housing are usually the two biggest expenses a family faces," said U.S. Transportation Secretary Anthony Foxx. "Now, hardworking families all across the country can make better informed decisions about where to live and work, including how their different transportation options may impact those choices."
The LAP hosts two cutting-edge data tools: the Location Affordability Index (LAI) and My Transportation Cost Calculator (MTCC). The map-based LAI is a database of predicted annual housing and transportation costs for a particular area. The LAI includes diverse household profiles--which vary by income, size, and number of commuters--and shows the affordability landscape for each one across an entire region.It was designed to help renters and homeowners, as well as planners, policymakers, developers, and researchers, get a more complete understanding of the costs of living in a location given the differences between households, neighborhoods, and regions, all of which impact affordability. The data covers 94% of the U.S. population.
The Cost Calculator, a companion to the LAI, allows users to customize data for their own household and potential residential locations. Users enter basic information about their income, housing, cars, and travel patterns. The customized estimates give a better understanding of transportation costs, how much they differ in other locations, and how much they are impacted by individual choices, allowing users to make more informed decisions about where to live and work.
The LAI was developed with the input of real-estate industry professionals, academics, and expert staff from HUD and DOT, and uses statistical models that were developed from various sources that capture key neighborhood characteristics: population density, transit and job access, average number of commuters and distance of commutes, average household income and size, median selected monthly owner costs (SMOC), and median gross rent. The LAI also considers: car ownership, annual vehicle miles traveled (VMT), percent of commuters using transit, average selected monthly ownership costs, and average gross rent. This data is then used to calculate total housing and transportation costs.
Most of the model uses data that describe features of a neighborhood that are the same regardless of who lives there. To show how affordable neighborhoods across a region are for different types of households, the LAI presents data in terms of eight different household types--each characterized by the number of family members, household income and number of commuters--that represent a broad range of U.S. families. Descriptions of these household types, as well as the complete methodology used to create the Index, are available on the LAP.
"I've witnessed the evolution of these tools over time and I'm impressed by the attention to detail and statistical sophistication," said Tom Sanchez, Virginia Tech professor and Editor of the academic journal Housing Policy Debate. "Household location decisions are in fact a function of housing costs and transportation costs together. Better information should lead to better decisions that effect not only particular households, but also communities and regions."
HUD and DOT have analyzed the LAI data to better understand how housing and transportation costs vary between neighborhoods and across regions, and how land use, infrastructure investment, neighborhood characteristics, and demographic factors ultimately impact household budgets.
The core finding of the LAI is that the way communities are built and connected to one another has significant impacts on how much resident households spend on transportation. At the neighborhood level, factors like the density of residential development, access to transit and jobs, and street connectivity strongly influence household travel behaviors and costs. At the regional level, sprawl is the strongest indicator of average transportation costs, with households in higher density areas having lower transportation costs.