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- Title
Amenity-Based Housing Affordability Indexes.
- Authors
Fisher, Lynn M.; Pollakowski, Henry O.; Zabel, Jeffrey
- Abstract
The recent slump notwithstanding, substantial increases in house prices in many parts of the United States have served to highlight housing affordability for moderate-income households, especially in high-cost, supply-constrained coastal cities such as Boston. In this article, we develop a new measure of area affordability that characterizes the supply of housing that is affordable to different households in different locations of a metropolitan region. Key to our approach is the explicit recognition that the price/rent of a dwelling is affected by its location. Hence, we develop an affordability methodology that accounts for job accessibility, school quality and safety. This allows us to produce a menu of town-level indexes of adjusted housing affordability. The adjustments are based on obtaining implicit prices of these amenities from a hedonic price equation. We thus use data from a wide variety of sources to rank 141 towns in the greater Boston metropolitan area based on their adjusted affordability. Taking households earning 80% of area median income as an example, we find that consideration of town-level amenities leads to major changes relative to a typical assessment of affordability.
- Subjects
BOSTON (Mass.); MASSACHUSETTS; HOUSING research; PRICES -- Mathematical models; HOUSING market; METROPOLITAN areas; HOUSING surveys
- Publication
Real Estate Economics, 2009, Vol 37, Issue 4, p705
- ISSN
1080-8620
- Publication type
Article
- DOI
10.1111/j.1540-6229.2009.00261.x