What is your ERE housing score?

How to avoid signing your life over to a mortgage
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Re: What is your ERE housing score?

Post by Fish » Fri Sep 29, 2017 9:32 am

Seppia wrote:
Fri Sep 29, 2017 3:34 am
The methodology though seems to favor people who live AND work inside small-midsize cities*, not sure if this is by design or accident?
If work or house location is a constraint (i.e. not willing to change one or the other) then the goal is to find a local minimum (not global). So this is really just a personal optimization exercise, not a competition. From a transportation efficiency perspective, being able to live close to both work and food sources is ideal. In large cities the jobs tend to be clustered in a small area and competition will drive the cost of nearby housing up (we're not the only ones trying to optimize, many humans intuitively do this too). I'm not sure it's methodology as much as it is reality.

Keep in mind that the "divide by 100" in housing cost is supposed to reflect your personal preference for financial vs. transportational efficiency and when performing your own optimization, you can adjust this (and divide by 50, or 200, or use a custom math function) to suit your preferences. Also, suppose your income is X when working in a small-midsize city, and 1.5X working in a high cost of living area. You could add 0.5X to your cost of housing in the small-midsize city to reflect the opportunity cost of living there. But this presumes you're willing to change both work and housing.

@iDave - The reason for calculating distance to work and grocery is that money and food are both necessities for most people. Since you're FI, you could replace "distance to work" with "distance to nearest suitable lake" to suit your preferences. Presuming cost equal, is a house next to the lake equally preferable to a house next to the grocery store or one halfway between? When you are retired and have all the time in the world, you might not be optimizing distance to grocery anymore. In that case you just set a constraint for it and leave it out of the objective function. Or you might decide that optimization feels "too much like work" and the inefficiencies are tolerable, so you do something more interesting instead, like fishing or playing the guitar. :)

Instead of comparing to an absolute rating scale (which was thrown in there just for fun), anyone who is optimizing should take the next step and start looking for suitable alternatives to see how much efficiency can be improved by changing jobs or moving house.

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Re: What is your ERE housing score?

Post by IlliniDave » Fri Sep 29, 2017 10:08 am

Fish, that is pretty much what I've done, although not all facets of it were approached quite as systematically. My intuition has proved reliable more often than not so I often go with it. In the case of the cabin I intend to spend a lot more time enjoying the lake and wilderness than hanging around at the grocery store, so it is 18-19 mi to the nearest grocery store and waves from the nearest lake roll up on my property when the wind comes from the west or north. In terms of my actual residence, by the time I got serious about FI I was well established here and it wasn't an impediment to FI so not worth the hassle of selling and moving only to retire, sell, and move again in a few years.

There are some other considerations such as schools, recreation opportunities for children, and low crime, that led to the decision to wind up where I'm at. But those are less important now and if I was choosing again proximity to work would be a much bigger factor. When I retire and resettle in Illinois it will be a combination of proximity to supplies and to my parents that will be the initial consideration, though it's a small city and nothing is too far away. I'm hoping to be able to do a lot of biking around town in place of driving, though admittedly it will be more for exercise than for financial concerns.

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Re: What is your ERE housing score?

Post by Seppia » Fri Sep 29, 2017 12:35 pm

@fish thanks for the explanation.
I don't see this as a competition, I'm too old and the only remaining competitive fire is mostly with myself :)
I was asking because assuming we consider lower scores to be better (less wasteful), the way it's setup seems to favor living and working inside a small/midsize city.
For a NYC resident, I see as semi impossible to get a score lower than 7, while for someone living and working in downtown Pittsburg it should be fairly easy
Of course one can tweak the variables and the multipliers, I was just curios is you had set it up in this particular way for some specific reason.

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Re: What is your ERE housing score?

Post by Ego » Fri Sep 29, 2017 4:32 pm

7Wannabe5 wrote:
Fri Sep 29, 2017 7:26 am
Right, it can't be "apples to apples" because you have transcended the independent optimization model and entered into the interdependent optimization model.
I like that... interdependent optimization. I think we need to begin a thread of examples.

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Re: What is your ERE housing score?

Post by Fish » Fri Sep 29, 2017 8:01 pm

@Seppia - The difficulty of achieving cost- and location-efficient housing is not going to be the same in all areas. I think we can at agree on at least this much.

What the formula looks for is an intersection of your job, grocery outlet, and affordable housing. "Affordable" is used in an absolute sense here, consistent with the 21DM:
I think that a good guideline per person for living arrangements is $200-300/month/person. In some places this buys more than other places. As far as I am concerned, the number is absolute. If I want to live in a “nicer place” it simply translates into a (much) smaller place and vice versa.
There may not always be a low-score solution, especially if one is inflexible wrt location. I browsed the Manhattan craigslist and the "under $300" filter is useless because nearly all the results are weekly rates... and sometimes nightly. :shock: To get under $500/month you pretty much need to secretly share a room with an identical twin without any overlap in usage.

I am going to say that the formula works as designed because NYC is not a place where "convenient" and "affordable" intersect. That's reality. Again, if you have a requirement for a particular location, the advice is to do the best you can with the score and not worry about the absolute value.

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Re: What is your ERE housing score?

Post by Lemur » Mon Oct 16, 2017 3:17 pm

Distance to work 34.4
Grocery 3.8
Housing 8.5
Score 46.7


You guys are impressive. I have a long commute that is killing me at the moment. Currently making active steps to eliminate this...(working on trying to find a different job and relocate). I'm still on Day 1 of the makeover.

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Re: What is your ERE housing score?

Post by Zikoris » Sun Nov 05, 2017 10:44 pm

We live about 1/2 mile from work, and 1/2 mile maximum from our regular grocery stores, and walk to all of them. There's another grocery store that's 1.5 miles away which we bike or bus to once or twice a month, but I'll exclude it for simplicity. Our rent is $815, which we split, so $407 Canadian each, which is $318 USD.

So: (0.5) + (0.5) + 318 = 3.19. Highly optimized!

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Re: What is your ERE housing score?

Post by Farm_or » Mon Nov 06, 2017 8:06 am

14+30+290/100 = 3.34

Remote living can be compensated for by low housing? Especially if your "housing" generates income (just add water).

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Re: What is your ERE housing score?

Post by Fish » Mon Nov 06, 2017 10:09 am

Just to keep everything comparable, and to avoid confusing subsequent participants... please divide housing cost by 100 before adding up the three terms. I understand everyone will not be familiar with order of operations, but it is how the formula was intended.

Zikoris: 0.5 + 0.5 + (318/100) = 4.18 (and since you walk to work and grocery, you have the option of zeroing out those distances, for an adjusted score of 3.18)

Farm_or: 14 + 30 + (290/100) = 46.9

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Re: What is your ERE housing score?

Post by SavingWithBabies » Mon Nov 06, 2017 12:14 pm

Distance to work: 0 (work from home)
Grocery: 3.4
Housing: 19.75 (w/ utilities) / 2 adults

Score: 13.275

We're moving in ~6 months to get that housing down.
Last edited by SavingWithBabies on Mon Nov 13, 2017 2:44 pm, edited 2 times in total.

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Re: What is your ERE housing score?

Post by CS » Mon Nov 06, 2017 6:48 pm

12 It works only because I work at home (starting next year with new career - yay!) Could improve with more biking...

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Re: What is your ERE housing score?

Post by slowtraveler » Mon Nov 13, 2017 5:05 am

Score = (Distance to work in miles) + (Distance to grocery in miles) + (Monthly cost of housing in USD /100)

0 miles to work
1 to 3 miles to food, normally walk 2 miles to food in a day, typically to restaurants but starting to cook more. This means driving once a week for about 2 miles one way on average. So can call it .5 miles per day.
1.7 for housing, will drop to 1 soon.

So 2.2 as an average right now, 1 as a low, 7.7 as a rare high.

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Re: What is your ERE housing score?

Post by 2Birds1Stone » Mon Nov 13, 2017 7:02 pm


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Re: What is your ERE housing score?

Post by oldbeyond » Tue Nov 14, 2017 6:38 am

2 mi bike to work, 0.5 mi bike to grocery, $650 housing ---> 6.5. Seems like this index really penalizes commuting(living for free right next to a grocery store I'd be allowed a 9 mile commute by public transit to keep the same score...)

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