Choice or Constraint? A Locally Tailored Assessment of Housing and Transportation Costs in Central Texas

Abstract

Transportation costs are a key component of an overall household budget. These costs are determined in part by residential location—housing and transportation costs are inextricably linked. The burden of high housing and transportation costs must be understood in context. High costs on their own are not necessarily a problem if a household freely chooses their location. Although several national-level tools (including the Center for Neighborhood Technology’s H+T Index and the U.S. Department of Housing and Urban Development’s Location Affordability Index) are now available to improve transparency about combined housing and transportation costs, their ability to reflect local conditions and to understand relative burdens is limited. In this paper, we create a combined housing and transportation cost index tailored to the realities of the Austin metropolitan area in Central Texas, with most data sources coming from state and local government or pertinent transportation agencies. We identify households allocating large shares of their budgets to housing and transportation costs and differentiate between those that have the ability to mode switch to reduce costs in principle and those that do not. Black and Hispanic/Latino households were disproportionately burdened by high costs. But across the entire population, overall cost burdens were low. This result means that fostering nonautomobile travel or denser residential living will be challenging using cost arguments alone.