Complicating the Story of Location Affordability

Abstract

In recent years, researchers and advocates have turned their attention to the trade-offs between housing affordability and transportation expenses. They argue that were families to move to more compact, transit-accessible, and walkable neighborhoods, they would reduce their driving and, possibly, forego the need for one or more cars, thus saving them money. We use the Panel Study of Income Dynamics to test this assumption with descriptive statistics and panel regression models, and we find little evidence to support it. We conclude that the location affordability literature may significantly overstate the promise of cost savings in transit-rich neighborhoods.

Keywords:

• Location affordability
• residential mobility
• transportation
• expenditures
• PSID

Acknowledgments

The collection of the Panel Study of Income Dynamics (PSID) data used in this study was partly supported by the National Institutes of Health [Grant R01 HD069609] and the National Science Foundation [Award 1157698]. The Accessibility Observatory at the University of Minnesota provided data on job accessibility by public transit.