And when they decide to leave their job (or are let go against their will, as will happen), they have access to X% of metro area jobs within that same distance commute and 1-X% outside that range with $YY added transportation costs. It's all a model to say what the liklihood of payback is.
Because my afternoon is pretty quiet, I've been thinking more about this topic. I'll reiterate that I generally think we can actually make such a system work, but there are a few more kinks/things to work through:
If we can only use housing as a proxy for determining transportation costs, therefore determining some sort of mortgage bonus (and assuming we can't simply use proximity to job since jobs move):
1. Fixed transportation costs (car payment, insurance) don't decrease by living in an urban area (in fact, your insurance premium may jump). Because of that, you're likely to only really reap gains if you eliminate a car from a two-car household or, as a single person/couple, go car free. But does eliminating one or all of your cars not eliminate your ability to get to X% of jobs? With no car as a single person, the bank could weigh the the fact that you now have to rely on transit. A couple with one car would carry the added risk that in the future two of them would need to reach their job by car but only have one available. My cousin and his family (wife and two daughters) have essentially lived more or less car free for years now. They can mostly function without one since they live in St. Paul, but as he was getting ready to get a school placement for his masters program, he had to let them know that his job had to be within biking distance or along a bus line. Surely that limits him greatly, despite being in the core (though obviously he's in a better position than if he was living in Woodbury with the same requirements).
2. With this same logic, could the bank make decisions based upon the fact that not only does a person not have a car, but they also never learned to drive? In a case like that, it's not like they can simply get a car loan. They actually have to take classes and do behind the wheel and such. That's certainly a risk.
3. And if we've opened a can of worms where we weigh all sorts of things (the house's proximity to urban areas, if a couple has kids, etc.), should we not also be weighing what
type of job they have? If you work in logistics and warehousing, there's a pretty good chance that you are going to be working in the suburbs (or exurbs), for instance. With years on the job comes expertise and honing a craft that can't always be carried over to other jobs. Does this mean mortgages should weigh the risk that should you lose your job, you'll end up in a workforce development class?
4. Frankly, I think the biggest obstacle is that people have a really hard time thinking with their heads when it comes to housing. And a lot of people are also misled, misinformed, or sometimes plain stupid. A lot of people overreached with their housing during the height of the bubble. Most people aren't experts on finances or housing. So when a banker giving you a mortgage says you can afford this amount and to not worry about your that ARM or your realtor smiles and tells you that you just have to spend a little bit more to get the house you want...it's really hard to just say no. I'm fairly financially savvy and I
still have trouble sticking to a budget, even if I know I can only spend so much. In that sense, I'm wary of giving people another way to spend more money when there are definitely parties involved that are invested in getting more dollars out of everyone's pockets.