4. Accessibility

There is significant accessibility offered by the city center and by its older, traditional suburbs and satellite cities. However, because the costs of transportation are not scored, there is significant undervaluation of the benefits of this convenience. New geographic information systems and associated analytic tools are starting to clarify the incidence of transportation expenditures as a function of location and access.

       Transportation costs, including investments in cars and related services, such as maintenance, insurance, and fuel, are now the "number two" U.S. household expense (just behind housing) outstripping spending for food, medical care, and clothing. ²⁶An accurate, mapped, geographic-score keeping system can assess the tangible benefits of access and provide a consistent valuation of these benefits to apply to qualifying ratios for home mortgages. Committees of lenders and planners, in conjunction with the Federal National Mortgage Association, have crafted underwriting standards to account for these benefits. As a result, these "location-efficient mortgages" will be offered starting this year in Chicago, Los Angeles, and Seattle. Agencies in other metropolitan regions including Miami, Portland, San Francisco, St. Louis, and Milwaukee are each planning similar programs.²⁷

       The underwriting of a location efficient mortgage counts the benefit of access as the equivalent of disposable income. This recognition increases credit availability by $25,000 to $35,000 for a first-time homebuyer. This has the effect of lowering the minimum income needed to purchase a home by $5,000 and could result in a 5 percent increase in the home ownership rate in each participating region. The benefits of shifting household expenditures from transportation to homeownership include shifting from depreciating personal property and services to appreciating real property, from higher to lower maintenance expense, and from polluting to non-polluting investments.²⁸

       A bonus that results from creating the systems to track actual transportation demand in places is location-efficient or so-called "green" automobile insurance. Networks of membership affinity groups being assembled by large public interest organizations such as the Surface Transportation Policy Project in Washington and the Conservation Law Foundation in Boston represent already aggregated buying power. Working with national automobile insurers, proposals are being crafted for basing insurance rates on the relatively lower risk factors associated with lower automobile use. ²⁹A family typically paying $2000 per year could see an immediate drop to $1300 for the same coverage due to the adoption of location-efficient underwriting. ³⁰

Contents

• Part I The Tangible Assets of Cities
• Part II Barriers to Valuing the Assets of Cities
• Part III Intangible Assets: Social Capital and Place
• Part IV A Newer Geography of Hope
• Part V Conclusion: Making Community Count
• Endnotes