The Chicago’s Center for Neighborhood Technology (CNT) recommends that you calculate and add together both the cost of transportation and the cost of housing (H+T) to determine whether or not a property is “affordable.” H+T should not be more than 45% of a family’s income. If you examine this map, you can see that looking at raw home values does not tell the whole story. Some areas are more affordable because the locations are more efficient. Or, as CNT writes:

“While the concept of energy efficiency is a familiar term, locations can be efficient too. Compact neighborhoods with walkable streets, access to transit, and a wide variety of stores and services have high location efficiency. They require less time [and] money. .  for residents to meet their everyday travel requirements. . . Transportation costs can range from 15% of household income in location efficient neighborhoods to over 28% in inefficient locations.”

The comparison below between a Chicago neighborhood and a suburb illustrates how transportation costs can change the affordability of a property. Mt. Prospect’s average rental price is $235/month less than that of Bronzeville; however, its transportation cost is $241/month more. As a result, if you look at the total Rental + Transportation Cost, Bronzeville is less expensive. This same approach can be used to compare neighborhoods within a city or to compare different suburbs as well.

Obviously the actual affordability of the neighborhood depends upon overall income. The higher your income and the lower your H+T, the more affordable the neighborhood is. But the combined numbers imply that living in the city and some of its neighborhoods might be less than what you might expect.

Although people do choose to live in certain areas for reasons, affordability is an important consideration factor in today’s economic climate. How does your home compare? Next time you start to seek new living arrangements, I hope you consider how transportation impacts affordability. Who knows? You might be one of our new neighbors!

[1] The rental price calculation is based on one bedroom apartment condos using zilpy.com.

[2] Average transportation cost calculated using CNT’s Abogo.cnt.org.

Urban Partnership Bank, an FDIC-insured, Illinois chartered bank will focus on providing continued availability of financial services for low and moderate income communities in Chicago’s South and West Sides, Cleveland, OH, and Detroit, MI.

Branches of the acquired institution will reopen during normal business hours as branches of Urban Partnership Bank. Depositors of ShoreBank (other than certain brokered deposits) will automatically become depositors of Urban Partnership Bank, and their deposits will continue to be insured by the FDIC up to applicable limits. Additional information is available on the FDIC’s website at www.fdic.gov.

David Vitale will serve as Chairman of Urban Partnership Bank. Bill Farrow will serve as President and Chief Executive Officer. The new bank was capitalized by financial institutions, philanthropic organizations and socially responsible individuals from Chicago and nationally. Urban Partnership Bank enters the market as “well-capitalized” with a Tier 1 leverage ratio of at least 8%, and has sufficient capital to meet pre-opening expenses, projected growth, and overall capital needs.

“Urban Partnership Bank will provide access to financial services and support to distressed neighborhoods in order to help transform distressed neighborhoods into strong, stable communities,” said David Vitale. “The private investment in this new financial institution demonstrates commitment to restoring the economic vitality of our communities,” added Vitale.

Vitale announced that Urban Partnership Bank will apply to become a Community Development Financial Institution (CDFI), reflecting its mission to serve low and moderate income and minority communities. The new bank will also continue to support energy efficiency and environmentally-friendly development.

“We have complete confidence in the leadership and ability of David Vitale and his team to make Urban Partnership Bank an effective resource for growing small businesses, creating new jobs, strengthening nonprofits and renovating abandoned and neglected real estate that will help restore the economic vitality of our communities,” said Lester H.McKeever, Jr., CPA, Managing Principal, Washington, Pittman & McKeever, LLC, and community leader.

Among the key points emphasized in the discussion:

1. Finance is just a piece of the puzzle: All of the participants emphasized that while finance is a helpful (and perhaps necessary) element of an energy efficiency program, offering flexible (and even very cheap) financing cannot ensure success, nor even broad participation. Contractor engagement, effective marketing, and making the process simple for the consumer are even more important than flexible financing.
2. “On-bill financing” is an amalgam of many different types of utility led lending programs. “On-bill finance” programs vary considerably and few have explored the differences in a meaningful way:
   1. A key element is whether the utility is extending credit to the end-user (this variation is “on-bill finance”), or whether the utility is merely collecting payments on loans extended by another entity. The latter is termed “on-bill repayment” since the utility assumes no credit risk.
   2. Most programs do not allow the loan to remain with the meter, should ownership change. Instead, the loan must be repaid in full if the account is closed, such as when a home is sold or a renter vacates. Programs that do allow transferability are termed “on-bill tariffs.”
   3. Other key elements of on-bill programs are how partial payments are divided; whether the utility can/will cut-off service if the loan is not repaid; and what type of collateral will be taken to secure the loans.
3. Banks, credit unions, and nonprofits are critical to partners for energy finance programs at the moment. Given the current impasse on expanding Property Assessed Clean Energy (PACE) programs due to objections raised by the Federal Housing Finance Agency (FHFA), energy finance programs in the interim will be led by private and nonprofit lenders:
   1. In nearly all cases, small, community-based financial institutions, rather than the large commercial banks, are providing the financing for these programs. Consequently, program designs vary significantly across the country, with pricing, terms, and subsidy usage differing markedly.
   2. Because these financial intermediaries are small, the programs will not be able to expand appreciably without new types of secondary markets being developed.
   3. While the federal government is attempting to develop national templates for these programs and the amount of leverage that should be obtained for every dollar of subsidy, creating such standards will be difficult due to the differences in the risk appetite and availability of capital in each local market.

The conversation again highlighted the fact that while energy finance industry is expanding and evolving, the industry is still in its infancy. With so many different models being developed, understanding best practices in program design is critical. Thankfully, experts, such as at Lawrence Berkeley National Laboratory and elsewhere, are beginning to explore the differences and better understand the key drivers of success. Personally, I look forward to seeing the clever Latin names that get assigned to the new species of lending programs radiating across the globe.

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Overall, I support and encourage such efforts, although they aren’t perfect. Some members of the coalition don’t fit under everyone’s definition of local. Also, a challenge becomes what is your line in the sand for what is ‘local’ as regions have different degrees of dependency on agricultural imports.

So, when I seek to buy local, decisions are not always clear cut. However, good intentions count for something, even though they also are known to pave the way to you know where. You have to start somewhere. Doing something is better than doing nothing.

Buy Local. As local as you can as you define it. Maybe I know it when I choose it.

I spy a kindergarten – an actual garden of children. That is the greenest and most hopeful thing I’ve seen this summer.

Following a butterfly flitting over the coneflowers. Collecting pinecones. Inspecting spider webs that appear overnight in the boughs of the blue spruce. Treating cherry tomatoes like balls before deciding whether or not to eat them. Eating green and purple beans from the garden. Swimming in a lake and watching the tiny blue gills nibble ankles.

Being amazed each day that hearing the word “outside” excites my son more than anything. Seeing the natural world through the eyes of my 14-month-old. That’s the greenest thing I’ve seen this summer.