U.S. Housing and Urban Development Secretary Shaun Donovan and U.S. Department of Transportation Secretary Anthony Foxx, 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 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 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 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 percent 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.
The LAI was developed with the input of real estate professionals, academics and 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.
“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, professor at Virginia Tech 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 affect not only particular households, but also communities and regions.”