Location Affordability Portal

An example of the Location Affordability Index results for Redding, CA. Source: Location Affordability Portal

Introduction

Like the Housing and Transportation Affordability Index, the Location Affordability Portal takes a holistic view of housing costs that acknowledges the frequent trade-offs between housing and transportation costs. The portal contains two tools: the Location Affordability Index (LAI) and My Transportation Cost Calculator. The LAI estimates housing and transportation costs down to the Census block-group level for a variety of household profiles. My Transportation Cost Calculator lets a user enter information about their own transportation costs in order to customize the estimates presented in the LAI.

The Location Affordability Portal was developed for the U.S. Department of Housing and Urban Development and Department of Transportation.

How It Works

The Location Affordability Portal presents housing and transportation affordability through two related tools: the Location Affordability Index and My Transportation Cost Calculator.

Location Affordability Index

The LAI allows users to see affordability data at levels ranging from census block up to Metropolitan Statistical Area. Housing costs, transportation costs, and a combined measure are presented as both dollar amounts and percentages of income. Any of these three measures can be overlaid onto a map in order to see geographic trends.

Not everyone in a specific area has the same housing and transportation costs. The LAI models these differences in two ways. First, it distinguishes between renters and owners, letting users look at costs for each individually or both combined. The index also provides eight different household profiles against which to benchmark affordability. Median-income family is the default, but of course not every household is represented by the median-income family. It would be impossible to capture the full range of potential households, but the tool does include seven other profiles that adjust for variations in income, household size, and number of commuters. For each combination of location, household profile, and owner status, LAI provides average vehicle ownership and annual miles driven and transit trips.

In addition to being viewed in the online tool, data from the LAI can be downloaded as Excel files for further analysis.

My Transportation Cost Calculator

While the LAI simply presents estimates for average housing and transportation costs, My Transportation Cost Calculator compares this information to an actual household. A user can input their household data, housing costs, and vehicle costs. The calculator assists users in estimating their total transportation costs, vehicle miles traveled (VMT), and transit costs. This information is used to create a personalized estimate of annual household costs, which can be compared to costs for a similar household in the same area as estimated by the LAI. It is also possible to compare multiple locations with the calculator, clearly demonstrating the effect that location choice can have on housing and transportation costs.

Methodology

The Location Affordability Portal was built using several federal data sources, including the American Community Survey, the National Transit Database, and the Consumer Expenditure Survey. The team then used regression modeling to estimate costs for specific locations based on the available data. Simultaneous equation modeling (SEM) was used to link the various regression models. Along with a VMT regression model, the SEM allowed for the estimation of household travel behavior. Combined with cost per use data from the Consumer Expenditure Survey and National Transit Database, this creates estimated transportation costs.

Applications

Compared to traditional housing cost metrics, the LAI provides a more complete look at cost of living and its relationship to location. This has significant implications for land use. The tool is particularly useful for long-range transportation planning, as it can help identify areas where poor transportation options lead to high transportation costs. Because it breaks apart housing and location costs, it can demonstrate the fact that while some neighborhoods are cheaper in terms of housing, transportation makes them expensive to live in. This has implications for the development of sustainable affordable housing.

My Transportation Cost Calculator is most obviously a tool for individuals, who can use it to make better-informed decisions on where to live. However, it can also be used by planners to supplement the LAI. Because it allows for custom information to be inputted, it lets planners look at hypothetical households not covered in the LAI’s eight profiles. This gives them a more thorough picture of affordability for actual residents of the areas in which the planners work.

Additional Reading

Data and Methodology: Location Affordability Index Version 2.0.

This white paper goes into extensive detail about the methodology used to create the Location Affordability Index.

Location Affordability Index User Guide

The Location Affordability Index User Guide contains illustrated instructions explaining how to use the tool.

My Transportation Costs Calculator User Guide

My Transportation Costs Calculator also has an illustrated user guide.