Housing and Transportation Affordability Index

The H + T Index was developed by the Center for Neighborhood Technology, a pro-transit organization based in Chicago. It purports to add transportation costs to housing costs for a “true accounting” of housing cost. NAHB staff has been following the index as it has taken shape over the last few years and has attended briefings on it at Brookings, the Urban Land Institute, and the National Housing Conference.

Given the increased interest in the index among regulators and Smart Growth and Sustainable Communities advocacy groups, in late 2010 NAHB’s Land Development Committee retained Abt Associates to research the history of the development of the index and examine its methodology and data sources as well as the reliability of its application as a policy tool. They provided NAHB with a report titled "A Methodological Review of the Center for Neighborhood Technology's Housing + Transportation Affordability Index."

Abt’s Executive Summary succinctly describes the many weaknesses they found in both the data and assumptions, as well as several concerns about relying on the index in its current form. Overall, Abt found that, while the index represents an enormous effort to gather data at the neighborhood level and provides a unique spotlight on the impacts of transportation costs on affordability, there are important weaknesses in the Index’s data, complexity, construction, transparency, lack of peer review, and execution that make it unsuitable for some public policy applications and raise important questions about whether it should be used as a policy metric at the federal, state, or local level. These limitations also make it unclear how useful it is even as a consumer information tool.

HUD convened a Technical Review Panel in November 2011 to further explore and resolve some of these issues and develop a revised version of the H+T Index for HUD’s use. In 2012 the Office of Sustainable Housing and Communities (OSHC’s) contractor, the Manhattan Strategy Group (MSG), contracted with Wharton and Econsult Corporation to conduct their own peer review of the LAI. Although Econsult Corporation was granted access to the assumptions, calculations and econometric modeling methods used in the original index and Abt Associates was not, there are strong similarities between the findings of the two reviews.

Visit http://www.locationaffordability.info/ to access the portal.


Additional Resources

NEW NAHB Summary Synthesis of the Location Affordability Portal – This is an assessment of the Location Affordability Index and My Transportation Cost Calculator which can be found on HUD's new Location Affordability Portal.

Third Party Review – HUD’s contractor, the Manhattan Strategy Group (MSG), contracted with Econsult Corporation to conduct their own peer review of the H+T Index.

2010 Letter to HUD Secretary on the Housing and Transportation Index – First memorandum from NAHB President to the HUD Secretary regarding concerns about the Housing and Transportation Index.

2011 Letter to HUD Secretary on the Housing and Transportation Index – Second memorandum from NAHB President to the HUD Secretary regarding concerns about the Housing and Transportation Index.

2012 Letter to HUD Secretary on Location Affordability Index – Third memorandum and detailed comments from NAHB Second Vice Chairman to the HUD Secretary regarding concerns about the Location Affordability Index (LAI).

Fair Housing and the H+T Index – Report from Poverty and Race Research Action Council citing the Index is an inappropriate tool for citing low income housing.