Can A Family Afford A Home Or Apartment If It Costs No More Than 30% Of Its Income?

Maybe not. Families paying no more than 30% of their income on housing might have to weigh other costs, including the cost of traveling to work, school, stores, the dentist, and other essential locations. In fact, recent research by the Center for Neighborhood Technology (CNT) suggests the time-honored 30% rule may be obsolete.

The center, which favors locating new homes and apartments near trains, bus lines, stores, and other amenities, studied the location of Chicago-area housing developments and noticed that some provided easier access to public transportation or were located within walking or biking distance of grocery stores and shops. When the center tallied the cost of traveling between the developments and the amenities it found a difference of $3,000 between the least and most “location-efficient” communities.

Thanks to rising transportation and energy costs, “working- and middle-class families can find themselves in what the New American Foundation calls ‘the energy trap’—stuck with the high costs of car ownership and fuel. It’s a particular problem for families that have moved out to the exurbs in search of more affordable housing without considering how much more they’ll have to pay to reach their jobs or their grocery store.”

The center’s research suggests that policy makers must continually revaluate standards. “Instead of limiting housing costs to 30% of a household’s budget, CNT is recommending agencies limit total housing and transportation costs to 45%.”