Why Transportation Matters to Housing – A Combined Approach    Bettie Teasley Sulmers          Assistant Director,        ...
What is THDA?Four major roles in housing across the state:   • Administrator   • Leader   • Resource   • Facilitator of Pa...
Real Cost of Location‐   Location, location, location‐   Drive ‘til you qualify
Housing Affordability• Housing should cost no more than 30% of income. If housing is greater than 30%, a household is hou...
% of Homeowners Cost Burdened – Nashville MSA Cannon      30%    Rutherford   23% Cheatham    22%    Smith        17%...
An Understanding of Cost Burden ‐ Buying a median priced homeNashville MSA ‐ 2010• Median Priced Home     $165,584• Monthl...
Nashville‐Davidson‐Murfreesboro MSAWages and Housing $35.00 $30.00                $28.70 $25.00                           ...
Housing Costs, Housing Plus… Mortgage underwriting considers the cost burden in   making loans in setting standards for t...
Location Efficiency Location Efficiency measured by: ‐ Compactness of residential development ‐ Proximity of transit (o...
Mortgage Performance – Three Cities Study looked at 40,000 mortgages in Chicago,  Jacksonville & San FranciscoTwo measure...
Location Efficiency and Mortgage Performance  Increased location efficiency, decreased probability of   loan default (Rau...
Implications of Transportation Considerations in Housing/Mortgage Lending   Location must be seen in relation to neighbor...
Housing Solutions at THDA THDA offers multiple programs addressing housing  needs for low to moderate income Tennesseans ...
Contact InformationBettie Teasley SulmersAssistant Director, Research & Planningbteasleysulmers@thda.org(615) 815‐2125
Housing+Transportation
Housing+Transportation
Housing+Transportation
Housing+Transportation
Housing+Transportation
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Housing+Transportation

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Bettie Teasley Sulmers' presentation to the Middle Tennessee Mayors Caucus on the key considerations for a combined approach to transportation and housing policy.

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Housing+Transportation

  1. 1. Why Transportation Matters to Housing – A Combined Approach  Bettie Teasley Sulmers Assistant Director, Research and Planning www.thda.org
  2. 2. What is THDA?Four major roles in housing across the state: • Administrator • Leader • Resource • Facilitator of Partnerships
  3. 3. Real Cost of Location‐ Location, location, location‐ Drive ‘til you qualify
  4. 4. Housing Affordability• Housing should cost no more than 30% of income. If housing is greater than 30%, a household is housing  cost burdened.
  5. 5. % of Homeowners Cost Burdened – Nashville MSA Cannon 30%  Rutherford 23% Cheatham 22%  Smith 17% Davidson 29%  Sumner 24% Dickson 23%  Trousdale 26% Hickman 22%  Williamson 22% Macon 27%  Wilson 22% Robertson 24%
  6. 6. An Understanding of Cost Burden ‐ Buying a median priced homeNashville MSA ‐ 2010• Median Priced Home $165,584• Monthly PITI $1,032• Annual Payments $12,380• Annual Income Needed $41,266• Hourly Wage Needed $19.84
  7. 7. Nashville‐Davidson‐Murfreesboro MSAWages and Housing $35.00 $30.00 $28.70 $25.00 $22.45 $19.50 $19.84 – Wages needed to buy $20.00 $15.52 – Wages needed to rent $15.15 $15.00 $10.00 $9.25 $8.10 $8.10 $5.00 $0.00 Education Registered Police Wait person Cashier Retail All Occupations Nurse Salesperson
  8. 8. Housing Costs, Housing Plus… Mortgage underwriting considers the cost burden in  making loans in setting standards for the debt‐to‐ income (DTI) ratios).Debt to Income Ratios – Doesn’t include costs like: ‐ child care ‐ cell phones ‐ transportationCenter for Neighborhood Technology Housing + Transportation Index Examines combined impact of location on cost
  9. 9. Location Efficiency Location Efficiency measured by: ‐ Compactness of residential development ‐ Proximity of transit (or sometimes by range of     transportation options available) ‐ Mix of nearby uses and services Source: Henry & Goldstein (2010), NRDC 
  10. 10. Mortgage Performance – Three Cities Study looked at 40,000 mortgages in Chicago,  Jacksonville & San FranciscoTwo measures of location efficiency:  Walkscore  Average number of vehicles per household (controlling  for income) In all three cities, probability for default increased with  increased number of vehicles. Walkscore results were less reliable, varying by income  characteristics of the city (inner city is highly walkable) (Rauterkus, Thall & Hangen, 2009)
  11. 11. Location Efficiency and Mortgage Performance  Increased location efficiency, decreased probability of  loan default (Rauterkus, Thall & Hangen, 2009)  Location efficient households have reduced car and gas  dependency – creating buffer from gas price  fluctuations (Henry & Goldstein, 2010)  Standard lending practices only take into account 9% of  car‐related transportation costs. (Henry & Goldstein, 2010)  Positive correlation  between walkability and home  prices (Cortright, 2009)
  12. 12. Implications of Transportation Considerations in Housing/Mortgage Lending  Location must be seen in relation to neighborhood and  region.    Location impacts cost – added dimension to what is  meant by cost.  Smart Growth – Land and Home Values increase – methods for ensuring affordability  Location Efficient Mortgages  Increase lending limits for location efficient mortgages  Decrease lending limits for less location efficient homes?  Policy Tensions
  13. 13. Housing Solutions at THDA THDA offers multiple programs addressing housing  needs for low to moderate income Tennesseans  TNHousingSearch.org  TNHousingResource.org Center for Neighborhood Technology  Housing + Transportation Index – www.cnt.org
  14. 14. Contact InformationBettie Teasley SulmersAssistant Director, Research & Planningbteasleysulmers@thda.org(615) 815‐2125

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