Does housing make a community livable? Housing consumption and neighborhood satisfaction in metropolitan areas

The purpose of this paper is to test the effect of the characteristics of a person's housing consumption on their perception of overall neighborhood quality. Housing tenure, housing affordability, structure of the housing unit, and housing conditions are expected to contribute to a resident's satisfaction with their neighborhood. Data for this analysis was obtained from the American Housing Survey Metropolitan samples for 2002 and 2004 to conduct an ordered logit regression model. The results support prior research, which shows that housing satisfaction is a strong correlate of neighborhood satisfaction. In addition, this research strengthens previous findings by reducing concerns about survey response bias and by including greater specificity about the housing characteristics that affect resident attitudes. Both homeownership and living in single family detached housing units are shown to increase the odds that residents will rate their neighborhoods highly. While structural problems related to housing, older housing, and housing units with insufficient space for the family's size decrease the odds that a resident will have positive feelings about his or her neighborhood. The one unexpected finding is related to housing affordability; residents who spend a higher percentage of their income on housing are more likely to have favorable attitudes about their neighborhoods. All of these conclusions may be useful for federal, state and local policy makers engaged in urban planning and creating housing policies. However, the affordability finding is particularly salient in the current financial crisis as new restrictions are enacted in response to the proliferation of foreclosures.