The following article points out the importance not only of the cost of housing, but the cost of housing location — the combined cost of housing + transporation (H+T).
substantial number of Americans will soon be forced to live in poverty conditions because they live in sprawl, and this number will expand as fuel costs continue to rise even more. Here’s why:
The average cost of owning and maintaining a car (payments or lease, insurance, taxes, repairs, washing, oil, gas, parking, etc.) varies between $7,000 and $10,000 per year, depending on where you live. My auto insurance quadrupled, for example, when I moved to Miami where there are more wrecks. Fortunately, we were able to get rid of our second car because South Beach is so walkable, so that helped a lot. But in most places, that’s not possible.
If you live in sprawl, you are not economically viable without a car because you must drive everywhere. And your kids aren’t socially viable without one, either, so as soon as they turn 16, expect them to be clamoring for their first car. This means that a family of four with everyone 16 or above most likely has 4 cars.
Cars vs. Houses
If you’re frugal and stay near the bottom of the range of total car costs, then that’s still 4 x $7,000 = $28,000 per year for your cars! Today, if you’re able to get a mortgage on a house, converting that $28,000 per year to home mortgage payments would buy you a house worth at least $350,000. So a family of four which owns a $150,000 house in sprawl (it’s hard to find one less expensive than that in the sprawl of most markets) could afford a $500,000 house in a highly walkable place where they need no car, all other things being equal.