REDUCTION OF WORK TRIP LENGTH THROUGH HOME MORTGAGE SUBSIDY INCENTIVES. EXECUTIVE SUMMARY

This study analyzes the geographically restricted home mortgage subsidy program at Princeton University in Princeton, New Jersey. The objective of the program is to ensure that the University remains residential by offering faculty and senior level staff incentives to purchase a home in the Princeton area. Financed by the University out of its general endowment, the mortgage program applies to first mortgages only. This report examines the potential reduction of vehicle miles travelled (VMT) resulting from mortgage subsidies to households willing to live within a specified distance of the workplace of a household member. The paper presents the need for a geographically restricted loan policy; theoretical evidence supporting such a policy; empirical analysis of the results of the Princeton mortgage program with respect to VMT, energy consumption, and air pollution; and means of inducing the private sector to participate in such a program. The work trip characteristics of Princeton University employees are compared to work trip characteristics of employees at comparable Princeton-area employees. The results of this study suggest that the Princeton University mortgage subsidy program has reduced Princeton employee work trip VMT and gasoline consumption at a reasonable cost.