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Measuring housing and transportation affordability: A case study of Melbourne, Australia

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  • Saberi, Meead
  • Wu, Hongzhi
  • Amoh-Gyimah, Richard
  • Smith, Jonathan
  • Arunachalam, Dharmalingam

Abstract

Housing affordability is traditionally measured using the percentage of household income spent on housing. An important cost that is usually overlooked in measuring location affordability is the transportation or accessibility costs. In this paper, we present a modeling approach, driven by urban open data, to measure location affordability that incorporates both housing and transportation costs. We apply the developed model to assess housing affordability in Melbourne, Australia as a case study. Results suggest that neighbourhoods that appear to be affordable when only housing cost is considered are not necessarily affordable when transportation costs are taken into account. A negative correlation between housing affordability and transportation affordability is observed. We also identify the presence of a strong spatial clustering pattern in the affordability measure across the study area. A major methodological contribution of the paper is the inclusion of comprehensive private vehicle costs and public transportation expenses in the model that contributes to a more robust estimation and understanding of location affordability. The model also distinguishes between different trip purposes. Results suggest that plans and policies to improve housing affordability should be made in coordination with transportation infrastructure investment plans to ensure effective and equitable outcomes. Nevertheless, the focus of the paper is more on the measurement of affordability; rather than reviewing and recommending housing related policies.

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  • Saberi, Meead & Wu, Hongzhi & Amoh-Gyimah, Richard & Smith, Jonathan & Arunachalam, Dharmalingam, 2017. "Measuring housing and transportation affordability: A case study of Melbourne, Australia," Journal of Transport Geography, Elsevier, vol. 65(C), pages 134-146.
    • Handle: RePEc:eee:jotrge:v:65:y:2017:i:c:p:134-146
    DOI: 10.1016/j.jtrangeo.2017.10.007
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    4. Guerra, Erick & Caudillo, Camilo & Goytia, Cynthia & Quiros, Tatiana Peralta & Rodriguez, Camila, 2018. "Residential location, urban form, and household transportation spending in Greater Buenos Aires," Journal of Transport Geography, Elsevier, vol. 72(C), pages 76-85.
    5. Mohammad Ghazaie & Mojtaba Rafieian, 2022. "Is affordable housing a pro‐poor policy? Evidence from a prominent housing policy in Iran," Poverty & Public Policy, John Wiley & Sons, vol. 14(4), pages 381-404, December.
    6. Mirko Guaralda & Greg Hearn & Marcus Foth & Tan Yigitcanlar & Severine Mayere & Lisa Law, 2020. "Towards Australian Regional Turnaround: Insights into Sustainably Accommodating Post-Pandemic Urban Growth in Regional Towns and Cities," Sustainability, MDPI, vol. 12(24), pages 1-13, December.
    7. Luminita-Mirela Lăzărescu & Daniela Liliana Diacon & Vasile Efros & Vasilică-Dănut Horodnic, 2020. "Housing Affordability in the Context of Covid-19 Pandemic – New Challenges for Romania," Book chapters-LUMEN Proceedings, in: Marcin Waldemar STANIEWSKI & Valentina VASILE & Adriana Grigorescu (ed.), International Conference Innovative Business Management & Global Entrepreneurship (IBMAGE 2020), edition 1, volume 14, chapter 22, pages 294-311, Editura Lumen.
    8. Mikhail Samarin & Madhuri Sharma, 2021. "Rent burden determinants in hot and cold housing markets of Davidson and Shelby counties, Tennessee," Growth and Change, Wiley Blackwell, vol. 52(3), pages 1608-1632, September.
    9. Dewita, Yulia & Yen, Barbara T.H. & Burke, Matthew, 2018. "The effect of transport cost on housing affordability: Experiences from the Bandung Metropolitan Area, Indonesia," Land Use Policy, Elsevier, vol. 79(C), pages 507-519.
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    11. Dodson, Jago & Li, Tiebei & Taylor, Elizabeth & Goldie, Xavier & Huang, Donna, 2020. "Commuting burden and housing affordability for low-income renters," SocArXiv 7n5hw, Center for Open Science.

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