Housing + Transportation Affordability Index

Check out this totally cool site that maps housing plus transportation costs (plus a whole bunch of other statistics, like average block size) by census block group.  They use census data to estimate the average home and transporation costs as a percentage of median income. The map's creators' point is that those suburban homes are a whole lot more expensive when you factor in transportation  costs. 

I'm fuzzy on their methodology for estimating transportation costs.  I spot-checked the block groups around my neighborhood, and found big differences in transportation costs that I'm skeptical exist.  And bear in mind that housing + transportation costs may take a huge bite out of, say, a Pflugerville household's income, but they would probably be a mere nibble compared to the bite of a central Austin mortgage payment.

Still, this is the coolest thing I've seen in a while.  (I admit that I probably have a warped sense of "cool.")

H/t Smart Growth around America.

Comments

[The Overhead Wire]

AC, there should be some info on how the T is calculated in this Brookings Brief about the AI from a few years ago.

http://www.brookings.edu/reports/2006/01_affordability_index.aspx

[DSK]

I'm puzzled as to exactly what their criteria was for which MSAs they chose for analysis. I don't see why they skipped San Antonio.

[M1EK]

Not a mere nibble; we're about to do what I never wanted to do and go back up to 2 cars (because my company chose their office.... poorly), and I have to come up with about another $500/month, by my estimation. That's a quarter of my total mortgage payment; more than a third of the non-tax portion.

[Tory]

Of course, schools tend to be as big a driver of suburbanization as housing costs. Throw in private school tuition for a couple of kids in the inner city, and I imagine the cost equation shifts yet again.

I'm also curious how they computed transportation costs. Games have been played before. See my post here:
http://houstonstrategies.blogspot.com/2005/07/misleading-stpp-stats-on.html

[AC]

Tory, I looked at the Brookings papers linked by the Overhead Wire. They identified a handful of variables that influence transportation costs -- block size, proximity to mass transportation, retail and jobs, household income, etc. -- and then, using census survey data, ran a regression to determine the influence of each factor on transportation costs.

They then took their regression results and, using census data for each block group, "estimated" the transportation costs for households in that block group.

I'm troubled by the last step. I'm no economist or statistician, but regression is a tool for establishing an association between two variables. You can't work backwards from your association to deduce the characteristics of specific members of the population. E.g., just because an extra year of schooling is associated with, say, an extra 10% of income doesn't mean that John makes 10% more than Jim just because John had another year of school.

Still, just eyeballing their numbers, I doubt that they're off much for the lower-income suburbs, just because of the high cost of owning and operating two cars. (Their interactive maps really are neat.)

[Tory]

Then they still have the same problem I mentioned in the post at the link: they're confusing voluntary spending with mandatory transportation costs. If a family has a decent income and an affordable house, they're likely to splurge on high-end cars, trucks, or SUVs (I know I see plenty in Houston) - or even buy cars for their teenagers. That's going to make their transportation "costs" seem very high, when, in fact, they could have just as easily bought used Honda Civics with high gas mileage to drive around, and probably cut their transportation "costs" in half or more. What they should be doing is calculating a benchmark cost per mile for a modest car with decent mileage, then calculating the estimated daily VMT required to live in an area, then multiply the two to get real transportation costs - separate from voluntary luxury spending.

[M1EK]

Tory, on the other hand, some feel they have to buy cars for their teenagers whereas I don't (since my 14-year-old lives within reach of a ton of bus lines). And you can't just measure per-mile; because most car costs are fixed, not variable.

[Scooby]

Tory,

A family of four could also squeeze into an efficiency apartment, instead of a 2000 sq ft three bedroom house with a formal living and dining areas, etc. Does that mean that we should only count the rent of a bare-bones apartment as a housing "cost", since anything above and beyond that is a luxury? Should the measure of food costs be restricted to the cheapest supply of 1,500 calories + one vitamin pill per day? After all, anything above that is voluntary luxury spending, not cost of necessities.

The statisticians could make value judgments, like you are suggesting, or they could count the numbers as the people actually spend, and leave the value judgments to the people.

[Tory]

Actually, you can convert most car costs to variable, if you assume depreciation and maintenance happen based on mileage. The only fixed cost is insurance.

It does make sense to create a common quality reference for costs, both housing and transportation. Knowing what the cost across cities, or suburb vs. city, is meaningless without comparing talking about what you get for that money in both places. ACCRA does this with a standard, modest sized house for a family of four in a reasonable school district, and then finds the cost of that in each metro for comparison. You'll still find huge variability, for the same type of house, across different metros.

[M1EK]

Tory, I'm the wrong guy to make that argument with - I frequently (and sometimes on this very blog) categorically reject the idea that depreciation by mileage is the right way to do things (it's really about 10% of the total; pure age is the other 90%).