How Many Miles Per Gallon Does Your Home Get?

I'm not sure if you heard or not, but this week, the federal government announced a major policy change that will most likely affect every American.

Don't worry, I'm not talking about the health care overhaul - I'll let others debate the merits of that. What I am talking about is the new Housing and Transportation Affordability Index.

Here's the low-down: it used to be that the standard measure of affordability was that housing costs should be no more than 30% of your paycheck. The new standards add in transportation costs - now, the affordability is that less than 45% of your paycheck should go towards housing costs plus transportation costs. This makes sense as, the farther out you go from a metro area, you generally spend less on housing, but more on transportation.

No big deal, right? After all, we have cheap gas and parking is free at just about every Target. But the numbers say otherwise. Using the 30% metric, about 70% of all US housing was "affordable". When you factor in transportation costs and increase the threshold to 45%, the percentage of affordable housing drastically dwindles down to 39%.

The report was done by Center for Neighborhood Technology (CNT) and was discussed this last Tuesday with deputy HUD secretary Ron Sims. Sims observed that knowing transportation costs as well as housing costs would have lessened the amount of defaulted mortgages because homeowners, he said, "did not realize they had a transportation cost burden and a mortgage."

Another goal of the report: enact legislation requiring real estate agents, brokers, and landlords to dislcose the neighborhood transportation costs when marketing a property.

What do you think? Should transportation costs be incorporated into housing costs? Should potential buyers have access to that information?

(Image source: CNT)