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167552-1 Report Abstract

Household Location Choices: The Case of Homebuyers and Apartment Dwellers in Austin, Texas

Michelle Bina and Kara M. Kockelman, University of Texas at Austin, April 2006, 117 pp. (167552-1)

This paper explores the issue of residential location choice for apartment dwellers and recent homebuyers in the Austin, Texas area. An understanding of residential location choice is fundamental to behavioral models of land use and, ultimately, travel demand. Surveys of over 200 apartment dwellers and 900 recent homebuyers offer valuable data on movers and their reasons for moving, as well as their priorities in home type and location selection and tradeoffs from such decisions.

Survey results show that apartment dwellers have different reasons for moving than homebuyers. The top reasons for moving for homebuyers are wanting to own a home and wanting a newer/bigger/better home; many apartment dwellers also reported wanting a newer/bigger/better home (the most frequently chosen response), but they were also much more likely to be moving for an easier commute, new job or job transfer, and planning to attend or graduate from college.

Both apartment dwellers and recent homebuyers reported their level of importance for various housing and location attributes; several of which described various types of access, such as commute time, proximity to shopping availability of bus services, and access to bus services. These features accounted for approximately 40% of the average reported importance for all housing and location attributes for apartment dwellers, but only 25% for homebuyers, suggesting that apartment dwellers place a higher priority on access than homebuyers.

Lifecycle variables, such as living situation and marital status, are important indicators in binary choice experiments and the importance of various measures of accessibility, especially in the case of apartment dwellers. Families in apartments are more likely to choose a location with plenty of parking over a downtown location with limited parking and homebuyers with children favor larger lots over proximity to shopping facilities. Although lifecycle variables are statistically significant in models of stated preferences for homebuyers, current home and location features are more practically and statistically significant, on average. In many instances, homebuyers are more likely to favor improvements that reflect their location choice. For example, households with homes far from the Austin Central Business District (CBD) tend to favor home enhancements over improvements in accessibility despite the fact these locations have lower levels of accessibility, in general. Overall, binary logit and ordered probit model results show that women and non-Caucasians (apartment dwellers and homebuyers) tend to be more concerned with all types of access – commute time, proximity to shopping, availability of bus services, and access to major freeways.

Predictive models of monthly rent, home value, and location offer important insights, while controlling for many key factors. For instance, centrality is valued by residents, so monthly rents fall rapidly within 3 miles of the CBD but taper at further distances, and home values fall linearly by $8,000 for each additional mile away from the CBD, ceteris paribus. As predicted rents and home values decrease with less accessibility (i.e., being further from the CBD), these values increase with apartment/home size (i.e., interior square footage), recognizing the tradeoffs that homes make between various attributes for a given cost constraint.

Additional models of rent and home value isolate structural features of the home from location features. For apartments, location attributes provided higher predictive power (adjusted R2=0.624) when compared to the physical attributes (adjusted R2=0.339). The opposite results occur when looking at homes: the predictive power of the structural aspects (adjusted R2=0.666) is slightly higher than the location information (adjusted R2=0.601). This further supports that apartment dwellers are more concerned with location features than home features, especially in comparison to homebuyers.

Cross-tabulations and a multinomial logit model explore home type choice, for various demographic groups. Understandably, households with many children are more likely to purchase large homes, and households with high incomes are more likely to purchase new homes and larger lots. Attached housing is more prominent for low-income and single-person households.

A multinomial logit location choice model for recent homebuyers shows home affordability and centrality are important to households, as well as the size of homes in the neighborhood. Model segmentation reveals that households with children are more sensitive home affordability and less attracted to central locations than households without children. These results and many others are explained by various model specifications.

Keywords: Location Choice, Land Use, Travel Demand

ENTIRE REPORT (Adobe Acrobat File – 816 KB)