Your car or your mortgage
Car dependency is directly linked to higher mortgage foreclosure rates, according to a study released by the Natural Resources Defense Council. The group analyzed 40,000 mortgages in Chicago, Jacksonville and San Francisco and found that the rate of foreclosures decreased in areas that were more compact, walkable and close to public transportation.
In the “Location Efficiency and Mortgage Default” study, the NRDC notes that homes in these “efficient” communities were more highly sought after and were less likely to fall as far in value as homes in more sprawled out areas. The probability of mortgage foreclosures also increased as neighborhood vehicle ownership levels rose. Residents with alternatives to cars had more flexibility in managing their transportation costs, which made them less likely to default, the study said.
“These results suggest that mortgage lenders should include measures of location efficiency in their underwriting to more accurately predict the risk of default,” the report stated. “They also support the notion that government land use, zoning, infrastructure and transportation policies could help to reduce mortgage foreclosures.”