The Journal of the Center for Real Estate Studies cover
Mortgage Finance, Affordable Homeownership
Published Article – Peer Reviewed | October 2015

Housing Costs and Commuting Distance

The Journal of the Center for Real Estate Studies
Kevin A. Park, Roberto G. Quercia

Center researchers report on results of a study that models the difference in housing costs as a function of estimated commuting distance. Their results have implications for housing policy, mortgage underwriting and property appraisals.

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Overview

Households face a trade-off between housing costs and community costs. Using a database that connects residence and workplace neighborhoods in eight larger metropolitan areas, researchers model the difference in housing costs as a function of estimated commuting distance.

They find that, consistent with economic theory that higher-income workers have a higher shadow value of time that increases commuting costs, these workers were found to have steeper value and rent gradients. Meanwhile, public transportation involves a fixed cost but lowers the marginal effect of commuting distance.

The results have important implications for housing policy, mortgage underwriting and property appraisals.

 

 

 

 

The UNC Center for Community Capital conducts research and policy analysis on ways to make financial services work better for more people and communities.

 

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