Housing + Transportation Affordability Index

Methodology

The Housing + Transportation Affordability Index is an innovative tool that measures the true affordability of housing by calculating the transportation costs associated with a home's location. Planners, lenders, and most consumers traditionally measure housing affordability as 30% or less of income. The H+T℠ Index, in contrast, suggests that 45% of income is a conservative estimate for combined housing and transportation expenditures, and a reasonable goal that helps insure adequate funds remain for other household necessities.

The H+T Index was developed by CNT with the support of The Brookings Institution's Urban Markets Initiative, and was expanded to cover 337 metro areas with the support of the Rockefeller Foundation.

Transportation Model

The transportation costs estimated in this model are more than the costs of commuting to and from work. They also include all other travel that is part of the household daily routine. The methods for the cost model are drawn from peer reviewed research findings on the factors that drive household transportation costs. The model assumptions, calculations, and methods have been reviewed by practitioners at the metropolitan Council in Minneapolis-St. Paul, fellows with the Brookings Institution, and academics from the university of Minnesota, Virginia Polytechnic, Temple University, and elsewhere, specializing in transportation modeling, household travel behavior, community indicators, and related topics.

Several publications have been published as part of the H + T research, including The Affordability Index: A New Tool for Measuring the True Affordability of a Housing Choice in 2006, and Estimating Transportation Costs by Characteristics of Neighborhood and Household in the Transportation Research Record in 2008.

The household transportation model is based on a multidimensional regression analysis, in which a formula describes the relationship between three dependent variables (auto ownership, auto use, and transit use) and nine main independent household and local environment variables. Neighborhood level (Census block group) data on household income (both average and median), household size, commuters per household, journey to work time (for all commuters, transit commuters, and non-transit commuters), household density (both residential and gross), block size, transit access, and job access were utilized as the independent, or predictor variables.

A more complete discussion of the methods can be found here.