Transportation costs associated with a community are a good predictor of housing foreclosure rates, according to a new study commissioned by the Natural Resources Defense Council (NRDC). The peer-reviewed statistical analysis found that, after accounting for variable factors, foreclosure rates in automobile-dependent fringe neighborhoods are higher than in "location efficient" neighborhoods in which residents spend less of their income on transportation, according to the NRDC.

The study looked at 40,000 mortgages in the San Francisco, Chicago and Jacksonville, Florida, regions. "In all three cities, the study found statistically sound results that the probability of mortgage foreclosure increases as neighborhood vehicle ownership levels rise, after controlling for income," a briefing paper on the study says. The problem, according Jennifer Henry, of the NRDC's Chicago office, is that people who must drive everywhere "have much less economic flexibility" in difficult economic times.

The NRDC makes three recommendations based on the findings: Land use, infrastructure and transportation policy should encourage development of location-efficient communities; mortgage underwriting practices should favor purchases of location-efficient homes; lenders and researchers should perform further research to refine underwriting models. A briefing paper about the study is available on the NRDC website,

The NRDC publicized its study at the same time the Congress for New Urbanism (CNU) stepped up its campaign to reform Fannie Mae and Freddie Mac lending standards. According to CNU, the government-backed mortgage agencies will not finance developments that have more than 20% commercial use, meaning mixed-use project developers and buyers do not have access to Fannie and Freddie loans.

"Fannie Mae and Freddie Mac enforce rules that have made Main Street almost impossible to build in America," complained CNU President and CEO John Norquist. He pointed to the 2008 study produced by CEOs for Cities called "Driven to the Brink" that strongly suggested high gasoline prices helped pop the housing bubble because exurban commuters could no longer afford both their mortgage and their gas bills. Norquist and other CNU leaders want Congress and the Obama administration to encourage lending programs that favor walkable, location-efficient development.