The housing and transportation cost as percent of income is based on median housing costs and average estimated transportation usage and costs (for automobile and transit) and median family income levels. This variable is a core component of the Location Affordability Index developed by the U.S. Department of Housing & Urban Development (U.S. HUD) and the U.S. Department of Transportation (U.S. DOT). U.S. HUD and U.S. DOT explain the goal of the Location Affordability Index “is to give consumers access to reliable, standardized data on the cost of location to make more informed decisions about where to live and work.” The housing costs are determined for both owner and renter housing tenure. Median selected monthly owner costs include mortgage payments and utility costs while median gross rent includes contract rent as well as utilities where applicable. The transportation cost are based on estimated average transportation usage and costs associated with use. Automobile usage comprises both car ownership and vehicle miles traveled (VMT). Transit usage includes estimates of the trips made by workers for commuting.
Housing costs for owners are determined by estimate monthly mortgage payments, utilities, fuel and condominium and mobile home fees where appropriate. Median gross rent including contract rent as well as utilities and fuel if paid by renter. Exogenous household variables such as income, household size and commuters per household are set at fixed values to control for any variation in household characteristics and so the model can focus on identifying cost differences attributed to place and location. The transportation cost are based on estimated average transportation usage and costs associated with use. Automobile usage comprises both car ownership and vehicle miles traveled (VMT). Transit usage includes estimates of the trips made by workers for commuting. The car ownership cost and car use cost components are generated using data from the U.S. Bureau of Labor Statistics. Transit fares per transit commuter, by metropolitan area, are used to estimate transit costs.
Formula: The MSA level value is the unweighted mean of the values of all block groups in the MSA.
This indicator was calculated by the U.S. Department of Housing & Urban Development (U.S. HUD), and U.S. Department of Transportation (U.S. DOT) using data from the sources listed below.
- U.S. HUD and U.S. U.S. DOT Location Affordability Index, 2013.
- U.S. Census Bureau, American Community Survey (ACS), 5-Year Estimates, 2012.