Cost of Housing + Transportation as % of Income


Rank: 6th of 9 counties
% of income spent on housing (typical)
% of income spent on transportation (typical)
% of income spent on housing (moderate)
% of income spent on transportation (moderate)
estimated # in household
estimated # of vehicles per household
"Typical Household" based on income of $59.8K in Larimer County. "Moderate Household" based on based on income of $47.8K in Larimer County.
What is this measure? This is an estimate of the percentage of income spent on both housing and transportation for a typical household. The methodoloy and tool was developed by the Center for Neighborhood Technology (CNT), and this organization maintains and interactive online mapping tool with this and related information.

Why do we measure this? The cost of housing, defined as rent or mortgage plus basic required utilities and mandatory fees, is the single largest expense for most households. However, transportation is also a large expense for most households. These costs can sometimes (but not always) be inversely related: workers often have a choice to spend less on housing located further away from jobs and amenities and then spend a greater percentage of their income on transportation than they would if they had housing that was closer to work, school, and shopping areas. The cost of transportation, which include costs related to vehicle ownership and use as well as public transit usage costs, is an important factor that people have to consider when choosing a place to live.
H+T index values are shown for two different income levels above.
What are some limitations of this metric's source? While much of the data used for this index originated from public sources, the methodology lacks transparency. The appropriate way to use this index is for examining general trends in different locations. Actual households may spend more or less on housing and transportation based on a number of factors such as income, number of workers in the home, transportation and transit options and place of employment or flexibility in working arrangements. Additionally, CNT is a transportation research firm focused on sustainability in urban areas, which does include promoting transit development. The data used to develop this index lags by approximately 2 years before the current index year.

Also, while housing and transportation are necessities, individual decisions about them are made with quality of life factors in mind. Housing needs vary with the size of households and considerations about the mobility or disability status of household members. Transportation needs also vary by household, and this will impact the number and types of vehicles and the percentage of trips that require people to use vehicles or transit.

How else can this be measured? U.S. Department of Housing and Urban Development's Location Affordability Index. We did not use this for two reasons: 1) because the data used to support it lags 5 to 6 years behind the current index year and 2) because HUD no longer supports the data portal that allows visualization of the data or re-calculation of the model at the county level. The U.S. Census Bureau American Community Survey includes statistics on the percent of income spent on housing, but does not address total cost of transportation.

Why did we use this source? This is an aggregate index that considers the interplay between the costs of housing and transportation. Below we show U.S. Census Bureau stats on housing cost burden. When households pay more than 30% of their income toward required housing costs, they are generally considered to be "cost burdened", as less of their income is now available for transportation, food, child care, health care, savings and other neccessities.

Census data differentiates between homeowners and renters, and this classifcation highlights one of the challenges of moving between renting and homeownership: more renters are cost-burdened. This raises the question of can cost burdened renters save enough to purchase a home?
"Housing Cost Burdened" is defined as spending more than 30% of gross income on basic required housing expenses. Generally speaking, more people who rent fall into this category. Several reasons contribute: 1) The typical homebuyer earns a greater income than the typical renter. 2) The typical renter is younger than the typical homeowner, and younger people generally make less income and have less savings. 3) A potential home owner wouldn't generally qualify for a home loan unless they had sufficient income and savings to spend less than 30% of their monthly income on their mortgage. Error bars are shown in the chart above to illustrate how it may not be prudent to directly compare values from adjacent years or across communities with very close estimates. Generally speaking, in our region the percentage of households that own will be larger than the percentage that rent. This means that statistical error is likely greater in estimates of cost burdened renters vs. homeowners. The error bars show the 90% confidence interval, and this was estimated from the values presented in the original Census data table. "Housing Costs" include rent/mortgage, basic utilities (electric/gas/water), and required taxes, insurance or fees (such as mandatory condo fees).
"Housing Cost Burdened" is defined as spending more than 30% of gross income on basic required housing expenses. Error bars show the 90% confidence interval for the value. "Housing Costs" include rent/mortgage, basic utilities (electric/gas/water), and required taxes, insurance or fees (such as mandatory condo fees). Census ACS estimates for total number of occupied units are shown (points) to illustrate the role of community size on the estimates and confidence in those estimates.

Data Sources used for this metric

Additional Information and other data sources