For most people looking for a place to live, two of the most paramount considerations will be the rent of a mortgage for the house. While that is a good thing, the housing and transportation subject should also be included in the conversation.
This is because the housing and transportation linkage is usually an underrated topic, which might lead to additional expenses that could have been planned for from the start. The connection between favorable transportation options and housing will have important implications on affordability.
Housing and Transportation Affordability Index
As explained earlier, there is more to housing than just the rent and mortgage payment considerations. This is because transportation expenses are usually the second-biggest budget for most homes.
But to date, this has really changed due to the pandemic because now most people have shifted to working remotely. Regardless of the current global state, the housing and transportation subject is still a vital conversation for all households.
Additionally, the affordability index shows the cost of transportation between and within regions. However, the results of this data will mostly depend on the neighborhood’s characteristics, among other important factors. Usually, lower transportation costs are experienced by people who live in location-efficient areas or neighborhoods.
The characteristics of such neighborhoods are:
· Compact, which feature mixed use
· Easy access to jobs, amenities, transit, and services
People living in such neighborhoods usually don’t spend much on transport according to the housing and transportation affordability index. But of course, things have now changed as more people were forced to reside in their homes, while working.
As a result, the transportation costs in each household must have reduced in a considerable amount. But this only means that they were directed to other necessary expenses during the pandemic.
As you may know, the traditional measure of affordability advises that housing shouldn’t cost more than 30% of the total household income. But like pointed out earlier, this measurement fails to take into account the transportation costs. And as you already know, the cost of transportation is the second-largest budget item in every household.
Therefore, true household affordability should factor in both housing and transportation costs. This way, people will be at a better place to make solid decisions based on these combined necessities. In multiple studies, people in suburban neighborhoods spend significantly more compared to households found in the central locations.
This shows that the initial law still applies and the closer you are to the necessary amenities; the less transportation expenses you might incur. Note that this scenario may change depending on location and type of transit, among other things.