The Housing Affordability Recipe

Smart policies can ensure that low- and moderate-income households can find suitable housing in good neighborhoods where transportation costs are low. The research is clear: upzoning works.

May 3, 2021, 12:00 PM PDT

By Todd Litman

Single Family Residential Construction

stock_photo_world / Shutterstock

"If we want to increase the supply of affordable housing, it's important to understand that it's not just about housing. Too often, efforts to increase affordability ignore transportation costs, resulting in cheap housing in isolated areas with high vehicle expenses. When all costs are considered, it's clear that the best way to increase affordability and economic opportunity is “upzoning” — allowing more housing in a given area — in accessible, high-opportunity neighborhoods."

"In the past, affordability was defined as households being able to spend less than 30 percent of their budget on housing, but many experts now define it as spending less than 45 percent on housing and transportation combined. That definition recognizes that a cheap house is not truly affordable if it’s located in an isolated area with high transportation costs, and that households can rationally spend more for housing in a walkable, mixed-use neighborhood where transportation is cheaper."

"This has important policy implications beyond simply increasing the supply of homes that people can afford. Smart-growth policies that increase affordable infill — more housing in existing residential areas — also can help achieve many economic, social and environmental goals. We know that children tend to be happier, healthier and more successful if they grow up in high-opportunity neighborhoods: areas with mixed incomes, good schools and convenient access to services and jobs."

Monday, May 3, 2021 in Governing


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