The effect of transport cost on housing affordability: Experiences from the Bandung Metropolitan Area, Indonesia

Transport and housing costs are interrelated due to their substantial share of household budgets. In many cases, households are making trade-offs by either spending more on housing in the inner city with lower transport costs or choosing more affordable housing in suburban areas, with higher commuting cost. This paper aims to examine housing and transport affordability by exploring middle to low-income household's transport and housing expenses in the Bandung Metropolitan Area (BMA), Indonesia. Households in nine locations within BMA with various housing type and spatial characteristics were surveyed. Collected data from 405 households are used to measure variables including fuel, parking, maintenance cost, public transport fares spent by households, rent and 'owner equivalent rent'. This study proposes the data envelopment analysis (DEA) method to measure affordability. The analysis measures each housing location's performance in terms of housing and transport affordability. The results indicate that the overall affordability is affected by housing type, choice of transport modes and distance to work and school. This study contributes to the growing literature of both transport and housing affordability and has implications for policy in the urban, housing, and transport sectors in Indonesia.