Car dependent neighborhoods more at risk of foreclosures

[Liberal_in_LA]

Car dependent neighborhoods more at risk of foreclosures

Foreclosures are more likely in car-dependent neighborhoods.
Homeowners in areas that are car-dependent and without transit options are at greater risk of foreclosure, according to a new report by the Natural Resources Defense Council (NRDC) which is calling for mortgage underwriting standards to start taking so-called "location-efficiency" into account.

The report focuses on the impact of location efficiency, a concept pioneered by NRDC and other groups in the 1990s, on mortgage performance in three key cities: Chicago, San Francisco and Jacksonville, Fl. It shows that vehicle ownership is key to predicting mortgage performance and suggests it should be taken into account by mortgage underwriters, policymakers, and real-estate developers.

Transportation costs represent a significant financial outlay -- accounting for roughly 17% of the average American household's income. The report found that if your only choice is to drive, you have much less economic flexibility -- flexibility that can protect you from foreclosure in tough times.



Read more: http://www.sfgate.com/cgi-bin/blogs/ontheblock/detail?blogid=58&entry_id=56290#ixzz0f65dGofL

[Joe the Liberal]

1. Makes sense, cars can be expensive. n/t

[my2sense]

2. Our current social construct (the burbs)

is unsustainable. We are so screwn.

[Lydia Leftcoast]

3. Makes sense--cars are EXPENSIVE

I have had two "free" cars since moving here in 2003, both hand-me-downs from relatives.

When I did my income tax at the end of 2004, I realized why I felt so poor compared to Portland, even though my income was larger than in the previous year and consumer prices about the same in Portland and Minneapolis.

I had spent $3000 on insurance, gas, and repairs. That's right. Because of the car, I had $3000 less in disposable income, or about $250 a month.

And I wasn't even making car payments.

I think of my siblings, both living in the burbs, both with two relatively new cars, both members of both couples driving long miles to work everyday, and living in locations where they literally cannot walk or take transit to ANYTHING. They live a very typical suburban lifestyle. I wonder how much THEY'RE spending on vehicles (a relatively new minivan and a compact car each household, each driving at least 10 miles per day for work, not including errands).

I wonder how many suburbanites are "car poor."

They may say that they can't afford a house closer in, but what if they could get by with one car or no car?

Americans have a blind spot with respect to cars. They act as if cars are free. When my students came back from their semester in Japan, some of them invariably complained, "You have to pay to go everywhere." They were referring to their daily commute by bus and train.

I asked them if they had ever actually OWNED a car, as opposed to borrowing a parental vehicle.

No, of course they hadn't. As far as they were concerned, cars were "free."

[Warpy]

4. That's another reason I've always clung to the inner city

First, there is a big bang for the buck in "distressed" neighborhoods. Second, there are more job alternatives to choose among and third, there is alternative transportation available.

[SheilaT]

5. Many years ago I was an airline

employee. I lived in the DC area, didn't own a car, and traveled a LOT. We all knew what each other earned -- the pay scales were public knowledge. And the travel benefits were quite wonderful. The airfare was free or very close to it. You only had to pay for hotel, meals, and whatever. My co-workers occasionally asked me how I could afford to travel so much, and I always said, "Because I don't own a car."

I took the bus to and from work, and that cost was probably less than 5% of what owning and operating a car would have been. I spent all of my spare money on travel. It was wonderful.

[Lydia Leftcoast]

6. It bugs me to no end that I have to spend all that money on the stupid car

when I'd rather use that $3000 money to take a trip overseas every year. I could spend three weeks in Japan for that price.