that are earning less than $35,000. These
data would suggest that the housing
choices of those making more than
$50,000 are limiting supply to those in
lower income cohorts.
This not only has a profound impact on
families in their housing; it also has an
impact on the degree to which those
families are able to expend resources in
other facets of their life.
Families that spend less than 30 percent of
their income have residual income leftover
to invest in themselves, their education
and the education of their children, their
retirement, or even a vacation. Those at
the other end—those spending more than
30 percent of their income—may be
forced into difficult choice s about
spending money on basic needs, utilities,
or medical bills.
In considering the costs of transportation alongside the
costs of housing, we find that much of Central Indiana is
indeed unaffordable.
Transportation, the Hidden Cost of “Affordable” Homeownership
If lower-income households only have
access to housing options that were left by
those with higher incomes, low-income
households that desire to be homeowners
may be forced to “drive until you qualify,”
seeking out affordable housing in new
greenfield developments at the outer
edges of the metropolitan area (accepting
the ongoing and variable costs of
transportation in the process).
The Center for Neighborhood Technology
maintains the Housing and Transportation
(H+T) Affordability Index, which factors in
the cost of transportation and resets the
affordability threshold to housing +
transportation costs at 45 percent of
household income. Figure 11, page 9,
compares affordability in Central Indiana
based only on housing (the 30 percent
threshold, left map) and based on housing
+ transportation (45 percent threshold,
right map).
Considering the costs of transportation
alongside the costs of housing, we find
that much of Central Indiana is indeed
unaffordable. These costs are hidden from
the traditional data sources in the sense
that the US Census does not report
transportation costs alongside housing
costs (they do provide insights on how far
workers commute and by what means).
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