Contextualizing Location Affordability: Urban Sprawl and Foreclosure

Location affordability is a policy concept that links housing costs with transport costs, recognizing that assessing affordability should consider the combined costs incurred by a given location choice. As a more holistic perspective on affordability than traditional thresholds of housing costs alone, location affordability opens new possibilities for applied analyses that suggest a need for stronger coordination between housing and transport sectors in policy, planning, and project development.
A range of housing and transport system configurations can result in affordable locations. For example, it may be that high housing cost burdens in densely developed urban markets can be softened by the use of low-cost transportation services, such as public transit, cycling, or walking. Intensely urban areas are usually more compatible with low-cost transport modes because distances are shorter and density concentrates people so as to make public transit feasible. Conversely, in areas where there is little pressure on land markets and development is at low densities, housing prices are usually lower. Yet such areas are inefficient and expensive to serve by public transit; at the same time, long distances between work and residential locations make walking or cycling infeasible. As a result, households rely on private automobiles for transport, which require substantial investment to purchase, maintain, and operate one or more vehicles. Between these two extremes are a variety of patterns where households' housing and transport costs reflect the joint configuration of the land development and transport systems in a city. This joint configuration, or urban form, creates an influential backdrop for household location decisions and affects household cost structures.
In recent decades, scholars have focused on the phenomenon of urban sprawl, broadly understood to be ex-urban, low-density development, with segregated land uses and an orientation toward automobile use. Although there is general agreement on what sprawl is, there is weak consensus on a consistent definition appropriate for use in empirical studies. This is not merely an academic problem: If research is to provide evidence on location affordability to policy- and decision-makers, a coherent and clear conceptualization of the relevant dimensions of urban form is needed to identify specific strategies that support affordability.
This paper makes two contributions to the affordability literature. First, it operationalizes location unaffordability using Census tract-level mortgage foreclosure rates during the recent housing crisis as an outcome measure. From this perspective, foreclosures are an observable effect of some combination of factors that resulted in a dwelling unit becoming unaffordable such that the homeowner defaults on a home mortgage. This is in contrast to typical methods that accept normative thresholds for affordability (i.e. 30% of household income). Second, it uses multi-dimensional measures of urban form - recently developed by Andrea Sarzynski, George Galster, and Lisa Stack (2014) - to estimate the effect of particular patterns of development on affordability. These data are combined with demographic and household cost data in a series of spatial regression models for 35 US cities that exhibited the greatest changes in their development patterns over the preceding decade (1990s).