Affordability: Housing Costs as Percentage of Income
Housing is a basic need with food and air. Ensuring that housing is affordable may correlate strongly with home ownership but neither of these are in absolute terms a basic necessity. The basic necessity is met with the supply of homes not with the cost. That said, it is a good policy for local governments to supply affordable homes. This helps to enhance the quality of life of citizens and to bolster their economic well-being, which ensures a more sustainable financial future (Blackburn, 2011). Housingaffordability can be defined as relative, subjective, a product of family budget, a ratio, or residual. This would explain the gamut of definitions of housing affordability, but spending less than 30% of income on housing (Ratio standard) has taken the fore as the definition of affordability in the U.S. (Stone, 2006).
The relationship between the Cost of Gasoline and Housing Costs is also used to measure Affordability in this study. These two price indicators are selected based on the theory that travel costs (including time) and affordability of housing are two of the primary factors which influence where people live in urban areas. In urban economics households will maximize their bid-rent capability by locating close to the jobs commensurate to their ability to afford housing in the area (Stegman, 1969). Housing will probably always be more affordable the farther one travels from the central City, but gasoline prices influence the affordability to travel increasingly longer distances from the city. When comparing cities in the country with more than 250,000 people, Houston ranks 26th for affordability, with 46% of income going to housing and transportation costs. Philadelphia was first with 33%; New York was 4th with 37%; Chicago was 14th with 42%; and Los Angeles was 51st with 52% of income going to housing and transportation cost (Center for Neighborhood Technology, 2010).
Sustainability Benefit: The cost of gasoline in Houston was 20 cents lower than the average in the country in 2010. Houston is not affected by housing value decreases at the same rate as the rest of the country.
Sustainability Issue: The cost of gasoline is increasing. More people are spending more than 30% of their income on housing.
Affordability: Housing Costs as Percentage of Income in the Sustainable Development Goals
Click on the SDG to reveal more information