Measuring Housing Affordability in Sao Paulo Metropolitan Region
24 Pages Posted: 23 Jan 2015 Last revised: 16 Jul 2015
Date Written: December 14, 2015
This paper develops a novel measure of affordability for the Sao Paulo metropolitan region that combines housing costs and transportation costs, including opportunity cost associated with commuting time. We also contribute to existing measures of housing affordability in Brazil by imputing housing costs for owners using the owner equivalent rent approach. Our measure enables us to track the evolution of affordability over the period 2007-2013 using PNAD microdata. The results indicate that the number of households spending more than 30 percent of their income on housing or 45 percent or more on housing and transportation costs combined has been increasing rapidly over that period. This measure of affordability can be integrated to a broader measure of housing needs to guide housing policy in addressing housing conditions that have negative effects on individual and social welfare.
Keywords: Housing, affordability, location, housing needs, housing inadequacy
JEL Classification: O18, R21, R31
Suggested Citation: Suggested Citation