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By Holly Welles
Special to the Financial Independence Hub
Are you torn between the city and the suburbs? While the city may have direct access to public transport and popular restaurants, it’s clear that the suburbs allow you to enjoy more space. Both locations have their perks: but urban life costs more, right? Maybe not. Each area has its own expenses that could affect your decision.
Here’s a quick look at the financial differences between cities and suburbs:
1.) Rent and Mortgages
Whether you want to buy a house or rent an apartment, it’s smart to weigh your options. That said, it’s almost always cheaper to buy or rent farther from an urban area. It typically costs more to live within a city’s 15-minute vicinity. In Seattle, it’s hard to find a house under (US)$600,000 unless you look at places an hour away from downtown.
The same data applies to rental expenses. However, rental costs can vary across the country, so the size and location of the city is crucial. For example, these numbers may differ if you live near a smaller urban hub like Pittsburgh or Omaha.
The last piece of the housing puzzle is size. Urban apartments and homes tend to be smaller with minimal outdoor space, meaning the price per square foot will be higher. Meanwhile, suburban residences will likely be larger and offer yards for renters and homeowners to enjoy. It’s important to consider not just how much you’re willing to pay, but what you’re paying for: a prime city location or more private space.
2.) Entertainment and Groceries
Generally, extra expenses like entertainment and groceries cost more if you live near a city. However, it’s often not as straightforward as that: because cost also depends on availability and choice. Cities with large populations might have a higher variety of grocery stores, but they also might lack access to fresh food. The best way to evaluate cost is not just to look at grocery prices, but also the distance to the nearest store and the number of farmers’ markets.
We can apply the same idea to entertainment. While dining out at bars and restaurants will likely be more expensive in a metro area, there are also more food stands and takeout options for those looking to eat more cheaply. Theatres and venues will charge for tickets, but living in the suburbs means you might have to travel far to attend these events in the first place.
There’s no hard and fast rule when it comes to food and entertainment costs. If you like to see plays and musicals with friends, think about those activities specifically. Does it make sense to drive 30 minutes from the suburbs to see productions throughout the year? Your choice is all about your wants.
3.) Transportation
It costs less to travel throughout cities. Most urban locations have public transport systems that you can access with a monthly pass. You won’t have to own a car unless you need to drive to places a bus or subway doesn’t reach. This perk cuts down on vehicle-related expenses like gas, maintenance and insurance. Most cities are also generally walkable, so you won’t always need to rely on public transport.
Even if you pay $100 for a monthly public transport pass, it’s still cheaper than the $13,500 to $17,700 the average commuter pays annual to commute from the suburbs. You may be able to take the bus around a suburban neighborhood, but more rural suburbs won’t have that option at all.
4.) Taxes
This component depends on your area. While property taxes for suburban locations tend to be higher, it’s also important to consider state, local and income taxes. Urban locations often have their own city-related taxes that suburbanites can avoid. That said, you’ll likely pay about the same amount wherever you decide to live. In most states, it doesn’t make a massive difference.
Some townships may require more for school expenses within your property taxes. If you don’t have school-aged kids, you may want to avoid areas with large school district budgets.
5.) Health Care
Medical costs vary throughout the country. If you went to a Dallas hospital for a surgery, it probably would’ve cost you less to do so if you’d gone to Austin. Therefore, it’s a little tricky to know where you should live when you’re concerned about health-related costs. There’s also not a major difference when you look at distance as a factor. It mostly depends on what kind of care you need specifically.
Most cities have access to specialists, so it’s best to consider a home closer to an urban area if you need medical care. You could also choose a suburban neighborhood: you’d still have access to hospitals. Regarding health care costs, it all depends on the location you want to move to.
Consider these key differences
It’s not always easy to choose between these two lifestyles. If you’re not sure whether to pick a city or suburb, consider your options as a whole. Use these factors to make your decision a little more straightforward.
Holly Welles is a real estate writer and the editor of The Estate Update. Her work on home buying, market trends and home improvement has been published by My Mortgage Insider, Homes.com and Porch.
