August 21, 2019

Giving up a vehicle can extend your housing options

‘Drive until you qualify’ mantra turned on its head
By Tom Babin, Calgary Herald October 15, 2011

When Andrew Bizon, a Calgary engineer, was looking to buy a home, he did some interesting math.

If his busy family of four could live with one car rather than two, they would have an extra $400 to $500 a month for the mortgage, he figured. To make that happen, he would have to commute in other ways, a problem solved with his bicycle.

So with the money saved by functioning as a one-car family, Bizon was able to buy a nice house in south Calgary, an older neighbourhood he loves. It has great amenities, he says, and is close enough to his downtown office that he can walk or take public transit if need be.

“The fact that we are not a two-car family allowed us to put more money into a house,” Bizon says. “Suddenly you’re not paying that extra $400 to $500 a month – that’s almost a second mortgage.”

Bizon’s arithmetic is the kind that drives the Housing and Transportation Affordability Index, a formula developed in the United States as a way of offering homeowners a different way of assessing the costs of living in their neighbourhood.

At its heart, the index brings another factor into the usual income versus housing-cost equation. That factor is transportation.

It may seem like a no-brainer – that cars cost money is a surprise to nobody – but in the U.S., the index has challenged the old mantra of “drive until you qualify,” which reflected homebuyers who would drive away from cities and stop when they reached a suburb they could afford.

By taking the cost of transportation into account, that cheap suburban housing might not be as attractive as more expensive communities better suited for walking or transit.

“It’s a more realistic picture of what’s affordable,” says Peter Haas, the chief research scientist for the U.S.-based Center for Neighborhood Technology, which came up with the index. His group has not compiled the data in Canada.

The Calgary area has a different kind of sprawl than big U.S. cities – the most affordable communities are not always the most distant, as a trip through Elbow Valley or Bearspaw will prove – but considering transportation costs still offer an alternative way of viewing housing affordability. This year, Noel Keough, an assistant professor of sustainable design at the University of Calgary, produced a report for the Canada Mortgage and Housing Corp. looking at this question.

His report imagines the city through the eyes of homebuyers who own a car and those who don’t. In looking at Calgary, his team found homebuyers who didn’t have the expense of a car had thousands more options when house-hunting.

For example, a car-free household with an $80,000 income can afford 6,069 more Calgary houses than if they owned cars. With a $60,000 income, the car-free household has an astounding 1,100 per cent more houses available in their price range.

“One of the goals (of the report) was just to make people a little more aware of their two big expenditures, housing and transportation,” Keough says. “It (also) demonstrates . . . transportation planners and affordable housing policy-makers should look at working together more.”

Keough, who has lived car-free in Calgary for 20 years, acknowledges that living without a car is difficult in some areas of the city, but says that is why transportation costs should be considered by homebuyers. Those on limited incomes, for example, might benefit from buying in a more expensive neighbourhood with great transit access.

“Transportation costs have a huge impact on people with lower incomes,” Keough says. “Where we get a bigger bang for our buck is in affordable areas with people who maybe can’t afford cars.”

Haas says the intention of the index isn’t to ostracize the suburbs.

He says commuting is only a small part of the equation.

“Only about 20 to 30 per cent of all driving is commuting,” Haas says. “Most is taking kids to piano lessons and soccer, and that kind of thing. So when people are choosing housing, they should think about that.”

The American index isn’t embraced by everybody. Housing developers in the United States often criticize the index as the work of those who have an agenda to promote the inner city.

In Calgary, Michael Flynn, executive director of the Urban Development Institute, an organization that represents residential home builders, says new suburbs are being built in ways that will reduce driving.

“If you look at the newest examples of new communities, they are complete communities, or they wouldn’t be approved by the city,” Flynn says, pointing out that new developments such as Walden and SkyView Ranch are envisioned as walkable, transitoriented neighbourhoods.

He also points out that living with a car remains the norm in Calgary, and as such newer communities are often the most affordable.

“If you want to be affordable (in the inner city), you’re talking about an apartment or a condo in most cases,” he says. “For a family of four that wants a backyard, then it’s the suburbs where it’s affordable.”

Some of those who live without vehicles, however, love that the index serves to confirm to their friends some financial savvy. Calgary artist Art Proctor, who lives in Crescent Heights, says he chose a community closer to downtown because he finds the lifestyle more affordable, despite the higher housing costs.

“It’s going to take you half an hour to an hour to get in and out of the city, plus traffic, plus insurance, plus gas. It would probably be the same price or cheaper to live closer to downtown without a car,” he says.

“I’m not saying everybody should live urban, but living in the suburbs is a more affordable option? I just don’t believe it.”

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