A family’s ability to afford a house or apartment is most often measured by calculating the percentage of household income devoted to housing costs, the single biggest expense for most households. However, transportation costs are the second-biggest draw on households’ income, and housing and transportation costs combined claim 52 cents out of every dollar of the average household’s budget. Because transportation costs aren’t easily discernable like monthly rent or mortgage payments, though, households may not fully account for those costs when making decisions about where to live and work.

To fill this information gap, HUD’s Office of Sustainable Housing and Communities, in partnership with the Department of Transportation, is heading up the federal Housing and Transportation Affordability Initiative. The initiative seeks to enhance our understanding of the relationship between housing and transportation costs in order to be more effective in advancing housing affordability for both individuals and communities at large. It will produce a new Location Affordability Index that accurately models the housing and transportation cost burden at the neighborhood level; a transportation cost calculator that allows individuals to create customized transportation cost estimates based on their location and household characteristics; and an analysis of the potential for integrating transportation costs into HUD programs and policies in order to promote greater affordability in HUD-assisted communities.