It Isn’t Cheaper To Live In The Suburbs

63 Comments

When it comes to first-time homebuyers, many millennials cite Canada’s overheated urban housing markets as the reason they’ve been forced to the suburbs. With the average house prices in virtually every capital city now over $500,000, many young people simply can’t afford to live near their work and opt for suburban communities with lower-priced homes instead.

But are they really saving money?

The short answer is no. Not by a long shot. In fact, moving to the suburbs is a net-zero gain financially in most cases, and a huge loss if you count the physical and mental stress of commuting. Of course, most people don’t count those things, only I do because I’m a personal finance weirdo that’s addicted to early retirement and financial independence blogs where everyone is always calculating the costs of everything.

But the costs can be calculated, and they will surprise you if you run the numbers.

Living in the suburbs isn’t economically beneficial if it requires you buy a second car.

As most of you know, my husband and I share one car, and even it stays parked at least 3 days per week. I work from home now, but before this I typically took the train or walked to work. My husband walks to his office. This set-up wasn’t accidental. When we were shopping for apartments a year and a half ago, we only looked within walking distance of both our jobs. People have balked at our pricey $1,750/mo rent, and then in the same breath told me they pay $250/mo to park at their office. For whatever reason, we seem to be of the very few that understand that a dollar is a dollar is a dollar, regardless of whether your spend it on housing or vehicle costs.

After payments, gas, maintenance, and insurance, the average cost of a compact car in Canada is $9,500 per year. Most people don’t know this. In fact, 60% of people under-estimate the cost of car ownership by $4,000 or more, which is probably the main reason my anti-suburbia argument falls on deaf ears 90% of the time. In any case, this works out to approximately $800 per month. It doesn’t sound like much, because nothing ever sounds like much in the context of a monthly payment, but if you assume an average tax rate of 18.7%, a Canadian will spend $11,685 of their gross salary on nothing more than driving to and from work. Yuck.

Most two-person households in the suburbs require two vehicles, so each person can get to and from work, bringing their total vehicle ownership costs to $1,600 per month. This isn’t small. Actually, it’s quite large, and the money could be allocated a totally different way for a much better lifestyle.

You can afford to spend $200,000 more on a house if you can get by with only one car.

As far as monthly payments go, it costs the same amount to own a $400,000 house in suburbia and drive two cars as it does to own a $600,000 house in the centre of the city and get away with one vehicle. This means choosing a more expensive home near one person’s employer of a two-person household is actually cheaper than living further away and forcing both to drive to their respective jobs.

Screen Shot 2015-12-13 at 2.45.56 PM

I used RateHub to calculate the monthly mortgage payments at a 2.49% interest rate on a $400,000 home and a $600,000 home, assuming a $50,000 down-payment which is the average first-time homebuyer’s down-payment in Canada.

Obviously, $50K goes further on a $400,000 house than a $600,000 one, which is why the costs of a $600K house is $150/mo more expensive, but I think the cost equation is still close enough for comparison.

Screen Shot 2015-12-13 at 2.46.06 PM

This calculation illustrates beautifully how adjusting your lifestyle is infinitely more powerful than tweaking your budget when it comes to having the life you want.

Now think of where your money is going: into a depreciating asset (the car) or a typically appreciating asset (house)

This is where the more expensive urban home becomes even more appealing than the lower-priced suburban one: when you are spending more money on your house, you are likely putting money into an asset that will increase in value, whereas choosing to spend more money on cars is just putting money into something that will keep decreasing in value.

This is an imperfect argument since Canada is likely in a housing bubble right now and there are markets, like Calgary, where house prices are declining, but it is something to think about in the long run, or if you live in any other geographic region. Even in the worst economic situation, the central house is likely still worth more than the suburban one, so if given the choice to spend $200,000 on more residential real estate vs. personal vehicles, the former is better.

But this doesn’t even begin to scratch the surface of how expensive your commute  from your suburban home really is.

Your commute is ludicrously expensive, because the real price of your commute is your happiness. Now, I know that sounds really dramatic, but it’s true. People think of commuting as a very neutral activity, which is why they don’t mind buying houses 50 minutes from work, but it’s not. A long commute is actually extremely detrimental to your physical and mental health. People with the longest commutes have the lowest levels of life satisfaction. This comes first, directly from the stress of sitting in traffic, and secondly from the resentment of the sheer time wasted that could have been spent doing virtually anything else.

Entrepreneurs, freelancers, and the self-employed will cry about the lost time spent commuting because it is time that could be spent earning more money, which is true, but you don’t have to see each hour as a lost income opportunity to get upset about it.

A shorter commute could mean more time to sleep in each morning, or more time at the end of the day to unwind. As trivial as it may seem, I don’t think anyone would deny they would feel happier watching an extra hour of Netflix rather than spending an extra hour in traffic.

Furthermore, the longer commute a person has, the more likely they are to be overweight and have high blood pressure. The origin of this is twofold: the first, and most obvious, is spending more time in the car leaves less time to go to the gym, and secondly, sitting is the new heart disease so tacking on another 1hr+ in the car after 8 or 9 hours at the office is almost a self-served death sentence. In other words, if you want to live a long and healthy life, give up your car.

Finally: your children don’t want a yard, they want more time with you

One of the things I’m told constantly in response to my adamant stance that I will never move to the suburbs is that I will change my mind once I have kids. I’ve even been told I should move to the suburbs to start a family, rather than continue my vigilant stakeout for fairly priced homes in my Calgary’s core. However, I never looked critically at the relationship between parenthood and commuting until I read this post by Mr. Money Mustache in which he says:

“Would you really waste an extra $3,000 per month just so your kids could play on your personal fenced-in postage stamp overlooked by vinyl-clad suburban houses in every direction while you are out stuck in traffic? No.” – Rent vs. Buy: if you have to ask, you should probably rent

I’m still nowhere near starting a family, but his argument completely unwound my previous hesitations that I might change my mind about housing locations in motherhood. Now? Not a chance. I definitely think children would prefer parental company in a public park than playing all by their lonesome in a 100 sq ft yard, but my ideas are just theories until proven in practice. The only downside to this is that the suburbs are chock full of kids, so living there typically means they have neighborhoods upon neighborhoods of children, whereas my offspring will be left to navigate busy city streets surrounded only by adults, poor things. When asked by suburban playmates why they do not live next door, they will cite the astronomically high opportunity cost and then probably never be invited over again. Such is the burden my family must bear for its frugality.

I actually made the mistake of sharing that MMM post above with my husband, who now is of the camp that we should rent forever. This is a more extreme perspective than I was hoping for, but that’ll teach me to bring expert sources into my long-winded rants about the merits of renting.

In any case, the suburbs aren’t cheaper. For many, rushing into home ownership in neighborhoods far from their jobs under the illusion of affordability is a gross financial oversight. When it comes to making any major purchase, there real financial (and emotional, and physical) implications extend far beyond the visible price-tag, and are worth taking the time to consider. However, no matter what you choose — cars in the suburbs or short commutes to a city house — it is always the same money, only being spent a different way.


63 Comments

  1. A year ago we bought a crappy little house near school for my husband. I work from home. We now only use our car when my son’s carpool doesn’t work out (or to grocery shop).

    People can’t believe that we would buy a second house instead of a second car, but our first house has an ROI of 16% in a good year (this year was good, we expect more like 11% long term), and we also rent out a room in our primary house.

    We used our money to make a lot more money and a lot more choices for ourselves, rather than using it to buy a second car.

    (PS- house prices here are abou 15% of Canada’s, and car prices are probably about 80% of Canada’s)

    • That is awesome — an even better example!

      Cars are almost a losing game, and houses area almost always a winning one. You’re laughing all the way to the bank now!

    • Justsaying

      LOL. You do realize that just because you’re in a bubble (16% per year ROI), does not mean it’ll carry on forever?

      Try finding any evidence or statistics ANYWHERE that suggest housing enjoys long term growth of 11%. Even the stock market doesn’t see that growth.

      Long term, housing tracks inflation (a terrible return). Don’t be blinded by the present moment.

  2. I am so, so, so onboard with the costs of commuting. People need to know that commuting is the literal worst thing.

    When I moved out to the suburbs, because “someone” (my boyfriend) bought a house out here a few years ago, I started interviewing for other jobs closer to his house ASAP. Luckily, there’s a cluster of high tech companies whose offices are out here in suburbia, so when I scored a (higher paying) job at one of them it was a no brainer. 5 minute commute by car vs. hour-long commute by bus? NO QUESTION. I am still, to this day, so grateful for my short commute, even if it does require a second car.

    And while I personally love life out here in the suburbs (the yard is for the dog, not for kids anytime soon, haha) I definitely see that my situation of having a career path that can happen entirely in the suburbs is pretty rare. Any pro-suburb counter arguments I would have are entirely negated by the uniqueness and luck of my situation. Awesome post Bridget!

    • Some suburbs are cute little pockets of communities where you can be close to work and some nightlife, which is awesome. I hate the ones that are nothing but houses in the middle of nowhere — I have no idea why this became a cultural phenomenon of the “best” way to raise a family.

      And I’d say for you that a high-paying job pays for the car so you’re all good 😉

  3. There are several couples in my condo building who own two cars. Yet they pay the premium of living in the city. I don’t understand. There isn’t even room for them to have two parking spots in our building so one of the people has to drive around and look for random parking at night OR pay the $200/month for a parking spot in another building.

    Commuting is the worst.

    • hahaha ours too, which is crazy.

      I feel like the “everyone needs a car” thing is an even bigger problem than living 40mins from the centre of town =p

      It will be hard to break North Americans of their vehicles.

  4. Kate

    Soo… What happens when you don’t want to live in the city? walking to work or taking a bus is definitely not an option.

    • Susan

      Then you’re choosing based on your own personal circumstances. I don’t think Bridget’s post is saying that everyone should want to live in the city & give up having a car. She’s making the point that a lot of people are missing by saying that living in suburb of a larger centre isn’t necessarily cheaper than living in the city.

      I’m on the camp of never owning a home, car or wanting kids so all I want is to live in a city with public transit that runs more than once an hour so I can give my car. But that’s not a lifestyle that suits 80% of people that I know.

      I lived in Melbourne for a year and lived in a suburb closer to the city & a further commute to work because the lifestyle I wanted meant living closer to the CBD & the job I had was in the boonies. I had an hour long train ride plus a half hour walk to an & from the train station to work. I didn’t hate the commute but I definitely hated having to get up earlier & not getting home before 7:00PM.

      At the end of the day, you’re going to do whatever suits your lifestyle & the community in which you want to live. Just don’t try to sell anyone that living in one area is any cheaper if it takes time away from living the life you’re working so hard for.

    • Then you pay the associated costs thereof.

  5. Isabelle

    I love sharing your blog with my partner of 3+ years. We’ve been doing the long distance thing for….. almost 2/3 of it, but talking about money/planning our future is one of our favourite things to bring us closer together! He’s firm on the no-commuting thing after watching is dead commute 2+ hours a day into Toronto. Ugh.

    • Toronto is the worst… I can’t even believe how bad it is until I’m stuck in traffic there myself. And then the bizarre thing is everyone just accepts it as normal! People think nothing of sitting in traffic an hour and a half there. It’s crazy.

      • Virginia

        I live and work in Toronto and I still don’t understand everyone’s fascination with having a car. I was recently transferred to a location closer to home which meant I got to trade my train ride for a bike ride to work!
        It’s been the best part of my transfer! I get to sleep in later and get home earlier to spend dinner with my family!
        I have always been of the mindset to live close to home, this just reinforced that!

  6. Giovina

    I rent in the middle of a great city so I can bike to work 8 months of the year and ride transit for the other 4. My cost of living is really low and I can’t see myself ever living in the suburbs or owning a car because I hate wastefulness and inefficiency. When I lived with my parents I needed a car to go almost everywhere and I hated it. My bike doesn’t pollute, I can park anywhere for free and I don’t get stuck in traffic. I wish more people would realize how terrible cars are for the environment and their health.

    • Agreed! I feel way better about our environmental footprint sharing just one car with my husband and leaving it in the parkade most of the time.

      Plus there’s a lot of benefits to just being outside! Walking & cycling is good for your health as well as that of the planet!

      Unfortunately we don’t design our cities for this… we basically self-sabotage from the get-go =p

  7. Mia

    Whenever I think my rent is too high I compare my 1.5 hour commute from St. Albert to downtown Edmonton to my current 15 minute walk to work and I realize it’s worth every penny.

    • haha the budget pie I always draw is 50% of your spending on housing & transportation and I always show the breakdown as 35% of your income to housing and 15% of your income to transportation… but you can really do it any way you want. If your transportation costs are zero because you have a great apartment that lets you walk everywhere, then it’s fine if it costs more! Theoretically it can cost up to 50% of your take-home pay and still be worth it!

  8. Erin

    A-freaking-men! My entire family seems to love commuting — renting or buying places that are 45 minutes to an hour from their current workplaces. None of them like their jobs enough to spend that much time going to them …

    I personally despise cars, because (a) they’re expensive and (b) they’re dangerous compared to other modes of transportation. I’m planning on living the no car life for as long as I possibly can, despite the fact that people think it’s weird that my car salesman husband doesn’t own a vehicle 🙂

    • That’s true, cars are so much more dangerous! If you add in the risk you’re taking every day by getting in a car, the cost equation becomes even more expensive.

      VIVA THE NO CAR LIFE (you live longer!)

  9. Katelynne

    I’m a commuter because my job changed after we purchased our home in the ‘burbs, which made my commute from a 7-10 minute drive or a bike ride to a 45 minute drive each way if traffic is bad. While I’m on the same page for a lot of these items, the one I don’t agree with is that commute = sadness. I’m WAY happier commuting to this job than I was (at the end, it wasn’t all awful, I like my career and the people, but the situation had gotten baaaad) driving the painful 10 minutes to feel like crap all day. Using that time as mindful time instead of stressing out time is huge though.

    And peoples situations will change and flex and may necessitate, even if you live in the core (or choose a location close to work), that you’ll need to travel out of it. Which is why the flexibility of renting is probably the best, really.

    Also, most of my friends who live in the core still continue to pay on a car per person. Which boggles my mind.

    Great post!

  10. Brian

    How does this calculation change when you have children and the public schools in the urban area are awful. If you had to pay for private school, wouldn’t that change some of your calculations a bit?

    Just a thought from someone with kids.

    • The public schools in Canada are of superbly high quality, regardless of where you live in a city. There’s no reason to choose private school here.

      • Jaye

        Great article Bridget. I just wanted to comment on the public vs private school debate.
        I’ve never understood why parents fork out so much money on private schooling.
        Personally I’d go the public school route and if need be, pay for tutoring. I’d rather put money aside for university for my child as opposed to paying ridiculous annual school fees!

        • honestly I think it’s a status thing, like “my child goes to so-and-so”.

          I actually looked up the private school here because of this conversation and it’s $20,000/yr.

          TWENTY THOUSAND!

          And that didn’t even include random things like their uniform ($800-$1,000) and a “technology fee” ($650) and field trips.
          My 4-yr degree cost the same as one year at this school!

      • Karen

        I am totally on board with this idea. In fact I’m practically the poster girl! I live in Garneau in Edmonton and have two kids, a townhouse, and a car that is rarely driven.

        However I sent a friend a link to this blog post and she rightly pointed out that many urban schools in Edmonton have closed (or are in danger of closing) due to low student population. The issue? Most people with kids have moved to the ‘burbs! 🙁

        We are lucky our neighbourhood school is thriving because of all the parents who commute into U of A and drive (ugh!) their kids to Garneau School. However many other central neighbourhoods have lost their schools.

    • Christine

      I agree with Bridget that there is no reason to send your kids to private school, even if you live in a city. If anything, living in the city provides more educational opportunities for your children because you have such easy access to museums, art galleries and botanical gardens where you can spend time with your kids complementing their education.

      • Truth! Love this idea!!

      • Let me clarify, I am not pro-private schools. I was more taking an angle that sometimes school districts are so terrible that they are basically not a viable option. Even with tutoring, some school districts don’t offer enough stimulation for academically gifted children, nor do they offer a safe enough environment

        • Really I was more pointing out that sometimes there are other costs that need to be considered besides transportation and to discount that cost because it doesn’t fit the narrative is as silly as someone simply moving to the suburbs because in their head it “saves them money”.

          Overall I agree with this article, I was just offering some food for thought and a lot of commenters did make some great points!

        • Neil

          School districts are funded in Canada at a flat per-student rate across the Province, so we don’t have the variation in funding from district to district that there sometimes is in the US. Districts also tend to be larger; in Calgary (where Bridget & I live) all of the urban area & suburbs are within the same district.

          • Freckles

            I also live in Calgary (45 years and counting) and it’s naïve to say that regardless of the neighbourhood, each public school (or Catholic school for the matter) is at the same level in their quality of education. Equal funding and/or identical curriculum does not automatically equate to equal education in each neighbourhood school.

          • You can get a quality education that prepares you for university at any school. There’s no point in paying $20,000/year to attend Strathcona-Tweedmuir just to get into the UofA or UofC — you can get to that endpoint from any public high school.

  11. SP

    You can live in the “suburbs” and not have a car if the commute is right.

    I agree with you in general, although it isn’t always solvable in the way you have solved it. Some day I may have to take a job that isn’t a dream commute. I hope not – but it could happen, and it wouldn’t be because I thought it was the most optimal solution ever, it would just be the most optimal one available to me at that time.

    My husband and I share a car and could both walk to work if we needed to (25 minutes). This is super lucky, as we work (relatively) near each other. We also don’t live “in the city” nor really in the suburbs (at least not my definition of a suburb). I love not having a commute – my days feel so much more free!

    Schools were something we considered (no kids, not even sure we will have them). Specific to our situation, if we looked at the data and “controlled” for the education / socio-economic status of the parents, public schools here are just as good as the place I’d actually consider a suburb.

    I’m with you on the yard thing, but I think that parents probably would rather be able to have the kids in the yard while they do other stuff in the house. yes, it is better for the kid if you take them to the park – but it is probably better for the parents if you don’t always have to! We don’t have much of a yard that a kid could play in, but I totally see the appeal of them.

  12. It completely boggles my mind how people just don’t realize the cost of commuting. I used to have a 20-45 minute commute each way (depending on traffic), and my husband used to have a 30-70 (sometimes worse!) commute. We both ended up at the same company where our commute is <15 minutes, we carpool most days, and we only go through a small traffic area. We are both so much happier, and didn't realize just how bad traffic was making us feel. Listening to NPR or audio books at least helped the commute, but few things are as crappy as the feeling of sitting on your butt in an energy-wasting machine (even with my Toyota) clogging up the environment. In looking at potentially getting a house, we both refuse to move far away. It's just not worth it.

  13. Blair

    We live in Renfrew (a little cheaper than some neighborhoods, but still close to DT). We have a 3 yr old and there are 4 parks within 3 blocks, swimming pool close by and can drop her off at daycare on our walk to work in the morning. No way we would move as long as we work downtown

  14. Sarah

    Good points , but people need to run their own numbers to see if it really works for them. In our case we save a lot on money by living in the suburbs. We still use one car and drive to and from work together, my husband gets free parking at work, we use our travel time productively and our house costs half of what it would downtown.

  15. Nitin

    Forever renting isn’t a bad idea. Toying with it myself

    http://www.gocurrycracker.com/renters-for-life/

  16. Kevin

    How come no addition of living car-free in your article? The economics (and benefits) of that are well worth discussing.

    My family lives car free, and given our mortgage on a $320,000 house in Edmonton, less than a 5 km walk (or short bus ride) away from downtown where I work, is $1600 per month. By your estimates I am paying off my house for the same cost as a two-car family’s car expenses. We live within walking distance of all amenities, and I walk or bus to work. Given that most of my walk to work is through parks/forest/river valley, I know I am in a much better mind-state than most when I sit down at my desk for the day. And it keeps me fit and happy. At the risk of sounding condescending, I feel a bit sorry for car commuters, and I decry the paradigm that has us convinced somehow that commuting by car is somehow normal.

    Given the choices we’ve made, my wife has not had to return to work and is free to stay home with our young son. We live in a great neighbourhood that is central, walkable, and family-friendly. We have a yard, and though the house is small, I wouldn’t trade it for a big house in the suburbs for anything.

    • Going without any vehicle at all is unrealistic for many people — mostly because of the way cities are designed, not personal preference. Most North American cities are notoriously pedestrian unfriendly.

      Neither my husband or I use a car to commute to work, but we still own one.

    • Karen

      I envy you! We found once we had kids we needed a car. How old is your son? Things like doctor’s appointments, extracurricular activities, etc. sometimes require us getting to places not accessible by transit. And once we were out of the bucket seat stage, it’s wasn’t feasible to use a car seat in a taxi/uber/pogo car. In another city we could probably manage but in Edmonton I found it very difficult. We don’t use our car on a daily basis but we do need it occasionally.

  17. Property taxes can also be higher in the suburbs as there are way fewer houses on a street than in the city. In the suburbs you are likely going to drive for groceries, coffee, etc. While in the city, everyone walks to their local. We have an 18 month old in the city and are expecting our second and I also find that the number of free resources for children which surround us is huge! My friends in the burbs have to drive 20 mins to get to a playgroup, while I literally have the pick of 8 all within a 10 min walk. To me the choice is easy!

  18. When I left my previous job, I was leaving a 15 min commute (half round trip) behind and taking on over an hour long commute each way. So at the time both my husband and I were working close to home, which happened to be in suburbia, rather than Toronto.

    I only commute two days a week to work and work the rest of the week from home. Although my commute to the office is long, I take public transportation , so it is not that draining compared to driving. The trip actually seems somewhat short in that I listen to podcasts, read or work on my blog during the train ride.

    Both of us had our own cars when we first started dating. His was already paid off and mine was not too far behind.

    I like where we live. It’s quiet, but still close to the major highways. It’s not in the middle of nowhere and there are things to do. 🙂

  19. Kelley

    We’ve found a middle ground, and have moved to a house with a yard from our downtown condo. There are tons of families and it’s a great place for us and our child. However, we’re a 10 minute bus ride from downtown and easily get by with 1 vehicle (although we continue to own 2 paid off vehicles). Our house was much more expensive than an equal size/quality house in the outskirt ‘burbs, and our taxes are significantly more than an equally valued home in those far away neighborhoods. The lifestyle factor made it worthwhile, and there will probably be long-term financial gain on a relative basis.

  20. Since moving into the city and getting rid of one car, the commute to work for my husband has actually become the best part of his day. Year round he rides his bike to and from work and this is his chance to unwind and get exercise. Plus the cost savings by not having a car (even though it was paid off) is pretty great. I love our new life where almost everything is walking or biking distance away.

  21. paul

    $800.00 for a car payment X 2. Couldn’t you just buy cheaper cars?

    • Who said anything about a car payment? Cars require insurance, gasoline, maintenance, and repairs. These add up to hundreds of dollars each year, even without a car payment. The $800/mo vehicle costs is the average, and I’m assuming includes the average car payment which is only about $400/mo. In other words, even if you own your cars outright, you’re paying $400+ per month to drive them.

      • Justsaying

        I fill up my car in the US twice a month for $25 each time. I drive to work every day and live in the suburbs. I spend $145/month on insurance and $50 once a year for an oil change. I have no car payment. My car has low mileage.

        Not everyone’s situation is as black and white as you paint it in this article. I spend an average of $200 to run my vehicle per month ($2400 per year). This is hardly more expensive than a full zone transit pass would cost for the year.

        The other issue here is that you have to assume that everything else is “in the city” too (not just your job). Your friends, your parents, your doctor, everything. Your article fails to account for any of these factors.

        My main point is that it is possible to be frugal and live in the suburbs. It is not “either or”. It is not “black or white.”

        • Emily

          Are you calculating saving for a replacement car? Because if you drive your entire working life, you’ll need to buy five or six cars over your lifetime. Even if you have no car payment now, you will eventually–unless you save in advance.

          So, yeah…add another $400/month to your transportation budget.

          • Emily

            Also, do you replace your tires? Windshield wipers? Other routine maintenance? Because, after all, I’m assuming you hang on to your cars for a decade, so factor in a timing belt, air filters, fluids…also, don’t ever get into a single accident, not even a fender bender, or there will be additional costs you need to amortize.

  22. When we looked to relocate, we wanted a shorter commute so we were looking in the city, and planning on paying about an extra $150k or so for the house in that location. However, with the housing market boom going on here (Houston) when we moved, we eventually landed in a “close to our work” suburb. We saved $150k on the house, and while we already had 2 cars, my wife and I commuted together, so no big change there either.
    Since we have kids, the biggest factor that pushed us to the suburbs was the quality of public schools nearer to the city. If we didn’t want to send out kids to poor quality schools, then w e would be paying about $12-$15k per year per child for private schools. For us a 30 minute commute was worth not paying that ~30k per year. I didn’t pay that much for college for either degree… Now we can walk the kids to school, walk them to daycare, walk to 2 pools, and the numerous playgrounds around our community. For us, it has been excellent on the financial front and the community front.
    When I switched jobs, my wife calculated the increased commuting costs (we’d both drive separate) would be ~$8k per year. We factored that in to what the number would have to be to make it worth it to leave, and my timing worked great, because the pay increase made it more than worth it.
    I would agree that without kids, we’d be living downtown able to walk or bike to both of our jobs. They definitely play a big factor into where you ultimately choose to live.

  23. We live in the suburb but managed to get by with only 1 car as our house is located close to the shopping center so we can walk to get groceries. You definitely need to look the whole cheaper housing (supposedly) vs. additional car cost. Great analysis.

  24. JohnnyBoy

    Can’t put a price on excellent school systems, better spent public funding, and home appreciation values in the burbs with respect to the city. Oh wait a minute, yes you can! You have a well thought articulated opinion written here, but that’s all it is. Nothing more, nothing less.

  25. Thomas

    You can’t put a price on amazing school systems, better use of public funds, safety, and appreciating home values that the burbs offer over the city. Oh wait a minute, you can! You have a well thought out, articulated piece. But it is just your own bias opinion, nothing more, nothing less.

  26. Ah, this brings me back to when I use to live in the suburbs/small town. The home was a bit cheaper but everything else was more. Taxes, insurance and all of the commuting cause nothing was close by. I now live in the city where everything is close by. If I only knew to take all of these costs into account before making that home purchase I probably would not have done it. Great post!

  27. Excellent post on a subject that is so completely ignored by almost everyone that to discuss not living in the suburbs is almost taboo. Most people in my office live 20+ miles away and spend at least 90 minutes a day commuting. WTF. I live a still-too-far away 7 miles from the office, but spend 80 minutes a day commuting by bicycle, which means getting healthier while commuting. My colleagues have to fit their exercise in sometime after they’ve spent nearly two hours commuting, and probably 8-10 or more hours working. No thanks!

    • 100% agree! Long commutes really cut into your time to be active, whereas riding a bike not only lets you improve your cardio & muscular strength, you get to be outside (psychological benefits of sunshine & nature can’t be ignored!)

      I think commuting is less evil if it can be done by walking or bicycle.

  28. Alyssa

    Who says you need a car to live in the suburbs? I don’t have one. My 40 min commute is spent on 10 min exercising (walking to the train station), and 30 min sleeping or catching up on Facebook or watching a video. It’s not for everyone, but there’s definitely ways to make it work.

  29. None

    There are lots of blended options beyond 1) buying a car; 2) not owning one. Using car shares for grocery shopping (lets face it grocery shopping by bike sucks) and rental for trips is extremely cost effective, particularly if you know how to efficiently use them. For example, I rented a mid-sized car over Christmas this past year for $150 including tax and I have a credit card that covers the insurance.

    In many ways the rent vs buy housing argument is just as worthy of a quantitative analysis for vehicles. I find it relatively easy using car shares and rentals for less than $2000 a year (incl. transit). What do I get for this strategy – effectively a self funded TFSA that will be worth $500,000 in ~30 years. (5500 per year with average compound of 7%)

  30. Justsaying

    Two major flaws with this article:

    1) Assuming that all families buy new or nearly new cars. I tried the car calculations using my own vehicle and couldn’t come anywhere even close to $9500 per year. Not even halfway. Much less than a third. This is because my car is older and has low mileage (cheaper insurance, cheaper up front payment, less maintenance due to lower mileage).

    2) Assuming interest rates will hover at historical lows or decrease further. The article completely falls apart if you factor in interest rate increases.

    I do not deny that commuting is soul-sucking and something to be avoided, however.

  31. Jan Crooker

    We moved from S CA with long commutes 30 years ago. My husband got a job in PA and we bought a house in a small town. He walked to work and we saved the difference we didn’t spend. We bought a vacation home at the beach.