How cars can trap consumers in a mortgage mess

If you're a homeowner, go outside after dinner and count the cars parked in driveways, on the street and in garages. Divide that number by the number of households on your walk. Got a number close to two, or more? You've got a situation ripe for foreclosure, according to a statistical analysis conducted by the National Resources Defense Council. What's more, car ownership is a key factor in predicting foreclosure; more useful than average credit scores, income or a host of demographic factors, the NRDC concludes.
At the heart are two things; first, we as a culture tend toward the car-rich and house-poor. We spend an average of $8,750, or more than 17% of our average household gross income each year on transportation. That figure is taken from the sub-$2.00-per-gallon gas prices of late 2008. Second, it is not just what we spend. but how dependent we are on that expenditure. In other words, if you live in a place that makes it hard, or even impossible, to commute to the grocery store, school and work without a car or three: when you crash, you crash hard.

My family is an excellent case study in how car dependency is correlated to the ability to weather financial storms. I am the family's primary breadwinner, and I had a couple of short-ish periods of unemployment in the past several years. During the first, we were still car owners, and for some reason holding on to the car seemed vital; and we very nearly lost the house -- the foreclosure process had begun and we negotiated a deal to fix it barely, barely in time. A year later, we decided to forgo the car and started taking advantage of the excellent public transportation, bicycle and pedestrian infrastructure around us. When I again became unemployed? We struggled, yes, but we always caught up on our mortgage long before the nasty letters would have begun.

Ironically, Americans are becoming financially trapped by the very suburbs they thought would free them. It's not just the social norms -- the keeping up with the Joneses, the club memberships and mall-as-entertainment -- it's the transport in and out of the suburbs that destroys a family's flexibility. My family can live very lean if we need to, reducing our expenses to as little as $2,000 for a month or two while we wait out a difficult period, even paying our mortgage on time. That suburban family with the safe cul-de-sac and the big back yard for the kids can't do that without a visit from the big flatbed tow truck of repossession -- and no way for the children to get to school, no way for mom and dad to buy groceries and go to work. Instead, the mortgage is left unpaid while the payments on everything that can be taken back are made.

The NRDC report is full of buzzwords and recommendations: it explains that "location efficiency," or how easy it is for residents of a community to access stores, schools, and workplaces without cars, "effectively increases household income" and "creates an economic buffer." When designing communities and budgeting for infrastructure expenditures, city planners should take location efficiency into account; increasing access to public transportation and creating communities that are walkable and bikeable will increase the financial security of the citizens.

We're lucky, as individuals: our planning process is simpler and more straightforward. We can do it without the buzzwords, the bidding processes, or the long periods of public comment. We can simply buy houses in neighborhoods where grocery stores, schools and workplaces are accessible via bicycle, bus, train or our trusty two feet. Making these choices will effectively increase our income and our financial security: and (take it from me) it's fun, too.
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