Affordable Housing, Announcements, Community Development

HUD To Create Housing-Transportation Affordability Index

 

The U.S. Department of Housing and Urban Development (HUD) announced Friday that it will create a national Housing Transportation Affordability Index, which will provide potential homebuyers with a true estimate of both housing and transportation costs. Traditionally, affordability indices determined cost of living taking into account housing costs and family income; transportation has not been part of this equation.

"Unfortunately, many people believe that in order to qualify for a mortgage they have to buy a house far away from their work. People may think they are saving money by buying a house that is cheaper, but the transportation costs could end up making their total costs more expensive in the long run," said Shelley Poticha, Director of the Office of Sustainable Housing and Communities at HUD.

According to a recent study of 28 metropolitan areas, the average household pays 27% of its income for housing and 20.2% of its income to transportation. For working families earning $50,000, these costs account for 57% of the household income.

The creation of a national housing and transportation affordability index will also help analyze the impacts of HUD programs on the combined cost of housing and transportation in HUD-supported communities and assess the feasibility of improving outcomes and making programs and policies more efficient, according to HUD.

HUD awarded The Manhattan Strategies Group, LLC and its subcontractor, the Center for Neighborhood Technology (CNT), a $3.2 million contract Friday for the development of the index.

 
 

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