November 13, 2013

Learning the True Costs of Living in a Community

Relocating can be one of the most exciting and important decisions a family or individual makes.

When families relocate, they’re choosing more than just a house or apartment: they are also selecting the schools, job opportunities, green spaces and other characteristics that come with that community.   And, at the center of it all is a community’s transportation network because people need to get to work, kids need to get to school, and families need to get to critical services.

What’s the bottom line? That housing and transportation are intimately linked.  Together, they represent the two biggest expenses for most families. In fact, the average working family spends close to 50 percent of their income on both housing and transportation costs.


Unfortunately, it’s often difficult for families to accurately predict the combined cost of housing and transportation in advance of relocating or moving. This can make a big difference in a family’s budget.

That’s why, HUD and DOT have launched the Location Affordability Portal; a user-friendly tool that helps consumers calculate the true cost of their combined housing and transportation expenses, helping them make more informed decisions about where to live and work.

Here’s how it works.  Families just type the address of a potential home or real estate investment and see how much it would cost for them to live there by calculating the housing and transportation costs.

In addition, the LAP will help address many common misconceptions about housing affordability.  For example, while some families may do better by paying less for housing in the suburbs, others could save more by doing the opposite – it just depends on the transportation options available to you. The reality is that you could end up paying more because of the costs of a longer commute just on transportation costs alone.

It’s no coincidence that the communities that were most impacted by the recent housing crisis, and were among the first to experience high rates of foreclosure and abandonment were those that were located farther from job centers with limited transportation options or connectivity to ease their commute.

A recent Harvard/Berkley study on economic mobility provides further evidence that location matters more than you might think. When jobs are far from where you live, that imposes a set of costs—on individuals as well as families—that can be too heavy to bear, and carries a disproportionate burden on those who have the least, limiting their economic prospects and upward mobility.G

For too long, there hasn’t been a way for people to totally factor these total costs into decisions about housing and employment – that is, until now. Thanks to the Location Affordability Portal, people will now have the information they need to make better financial decisions – potentially helping them free up dollars to save for their children’s education or their own retirement.

All of us at HUD and DOT are excited about the difference it will make for families across the nation.  We urge everyone looking to move to use the Location Affordability Portal and make better informed decisions.

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