The Capital Regional District (CRD) has released the 2020 Housing and Transportation Cost Estimate Study which examines combined housing and transportation costs as a measure of overall household affordability in the capital region.
Housing affordability has previously defined as families being able to spend less than 30% of their household budget on housing, but this does not reflect the full cost of housing location choices. Transportation costs can be a major household expense depending on where one lives and if one owns a vehicle for primary transportation. As a result, many experts now recommend that affordability be defined as families being able to spend less than 45% of their household budget on housing and transportation combined, called a Housing and Transportation (H&T) Affordability Index.
The CRD study found that the combined housing and transportation costs vary depending on where people live in the region. It found:
- the cost of vehicle ownership is significant regardless of how much it is used;
- areas where there are older apartments and condominiums with longer tenant tenure have lower housing costs;
- transportation costs tend to be lower in areas where more transportation options are available; and,
- some developing areas in the outer areas of the region show more housing affordability due to land values and availability.
The study indicates that a cheap house is not truly affordable if located in an automobile-dependent area where households must bear high transportation costs, and households can rationally spend more than 30% of their budget for housing located in a walkable urban neighborhood where they can minimize their transportation costs.