Supplying affordable house for urban lower- and medium-income classes has been always considered an important planning objective. The policies of Iran’s fourth and fifth development plan (referred as Maskan-e-Mehr) (kindness housing) is intended to supply more affordable housing for the urban low-income classes. For this purpose, the state sector has strove to reduce the house average price as much as possible through cession of gratuitously land in cities and new towns surrounding metropolises and families have to, in turn, pay just the housing construction. Lacking of suitable services and facilities, however, has resulted in increasing households transportation costs. Therefore, the present research work deals with evaluating affordability level of these houses through new index of housing affordability simultaneously considering housing and transportation costs. The study results revealed that high transportation costs that result from inadequate accessibility to public transportation and neighborhood services, and high payback of the monthly installments of the housing loan from the other side has resulted in spending more than 45.2 percent of the family income on housing construction and more than 25.8 percent on commuting. It means, in general, about 71 percent of the families income is spent on the housing and transportation combined; these figures show lack of affordability of these houses for target groups (low-income classes).
