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The days of building on any open lot, with the expectation that buyers will eventually come, may be over. New research from the Center for Neighborhood Technology–a Chicago think tank–shows that people who live close to transit, jobs, schools and retail, typically in cities and inner ring suburbs, spend up to $2,100 less annually on gasoline than residents of outer ring suburbs, where homes and amenities are dispersed and require residents to drive more.

The research, which compares average household gasoline expenses based on the average number of vehicle miles traveled per household, examines 52 U.S. metropolitan areas across the country – encompassing 60 million households. It also looks at percentage of household income spent on transportation, number of vehicles per household, transit ridership and other variables on a neighborhood-by-neighborhood basis.

The gas-cost findings are the newest addition to the Housing + Transportation Affordability Index developed by CNT and its collaborative partner, the Center for Transit Oriented Development (CTOD). The latest release of the H + T Index, a project of the Brookings Institution’s Urban Markets Initiative, is web-based technology that can take the guesswork out of computing transportation and other costs.

It includes an interactive map, which provides housing and transportation costs at the neighborhood level for 52 metropolitan areas. It also provides other key characteristics of neighborhoods, including average VMT (vehicle miles traveled), auto ownership rates, employment density and transit ridership.

Site visitors can zoom in on specific neighborhoods and pull up US Census information on the percentage of neighborhood residents who use mass transit, their average monthly spending on transportation, the number of wage earners and cars per household, and see the locations of nearby subway and commuter rail lines and stations.

Planners, lenders, developers and most consumers traditionally measure housing affordability as 30% or less of income. The Housing + Transportation Affordability Index, in contrast, takes into account not just the cost of housing, but also the intrinsic value of place, as quantified through transportation costs, explains Scott Bernstein, president of the CNT.

Prospective homebuyers are less willing than they were just a decade ago to trade a long commute for a less expensive house, real estate professionals concur. And that reality has significant implications for developers, retailers and service providers who depend on residential traffic.

Homebuyers have rediscovered the merits of living in traditional urban neighborhoods, where you need to drive less to get to school and work, shopping and entertainment, Bernstein says. It’s not entirely unexpected. According to a 1998 analysis by ERE Yarmouth and Real Estate Research Corporation, real estate values through 2023 will rise fastest in “smart communities” that incorporate traditional characteristics of successful cities, including a mix of residential and commercial districts and a pedestrian-friendly design. In other words, the option to walk–by providing sidewalks and local businesses–is a good investment.

Bernstein said distant suburbs are potentially problematic. “In some of the more dispersed areas, the average number of vehicle miles traveled per household exceeds more than 20,000 annually. At today’s gas prices, and an average gas mileage of 20.3 miles per gallon, that can mean an annual household expenditure of almost $4,000 on gas alone,” he added.

The Housing + Transportation Affordability Index provides data for the years 2000 and 2008, enabling comparisons for the eight-year period between annual household gasoline expenses, monthly household transportation expenses (including vehicle purchase price, insurance and maintenance) and monthly household transportation expenditures as a percent of income. Across the 52 metro areas studied, residents spent a combined $107.4 billion more on gasoline in 2008 than in 2000, an average increase regionally of 155%.

“When gas prices were cheaper, it mattered less where you chose to live,” said Bernstein. “But now, living someplace that requires driving everywhere can have a dramatic impact on your cost of living.”

Bernstein thinks the options are clear.

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