On October 23rd, the Metropolitan Planning Council, in partnership with the Center for Neighborhood Technology, Chicago Metropolitan Agency for Planning, and Regional Transportation Authority, released a report outlining ideas for putting the Obama administration’s joint-agency Livability Principles to work. Under the heading “Promote equitable, affordable housing” were ideas on expanding location- and energy-efficient housing.
The report implores federal agencies to support a broadened, even standardized, use of Location Efficient Mortgage and the Energy Efficient Mortgage. The basic idea is to quantify the savings of decreased transport and energy costs and then underwrite the savings as income, making urban homes more attainable. Around 2,000 LEMs were written between 2001 and 2005. Of these there has been one default.
“We argue that all mortgages should be location and energy efficient, but the lending industry isn’t what I would call innovative,” says CNT President Scott Bernstein, who helped design both mortgage products.
So what’s his advice to buyers? “Consider: How convenient is this place? Location efficiency is just a fancy way of saying convenient. Then tell your lender, ‘I’m a safer bet. I’m going to pay attention to this stuff and live within my means.’ ”
At the heart of these cost measurements is the Housing and Transportation Affordability Index, also designed by CNT. Explore their maps online to see cost of housing as a percentage of median income of an area next to the combine costs of housing and transportation.