There’s an anecdote that many have heard of--living in a compact city is more affordable than one that's more spread out. But does that really hold true? New Geography contributor, Urban Patter Associates head Fanis Grammenos drills down into this topic and gathers data that measure the effects of numerous factors of city living. Grammenos writes,
"The chart above, which plots data from the 2015 Consumer Expenditure Survey, confirms this general agreement on the correlation between compactness and housing costs. But questions arise from the sharp differences between pairs of cities. For example, Boston and Atlanta residents use the same percentage of their budgets — 33% — for housing. Yet Boston’s compactness index is at least 90 points higher: 37.4 for Atlanta, vs 126.9 for Boston. According to Smart Growth theory, that difference should bring housing expenditures for Bostonians to 43%, about the same level that is experienced by New Yorkers.
In another comparison, Boston and Miami differ little in compactness: 126.9 vs 112. Yet these two cities differ substantially in the percentage of household budget residents devote to housing costs - 33% vs 39%.
Clearly, in both these examples and in the chart above, compactness is but one of many factors and, perhaps, not the dominant one in the relationship between a city's housing costs and its compactness. Others need to be identified, quantified and incorporated. The trend, however, is indisputable: Greater compactness increases housing costs."