Living in the suburbs may not be so cheap
The conventional wisdom is that it’s cheaper to live in the outer suburbs (i.e., a long drive from jobs, stores, or schools) than closer to a town or city center. I suppose that’s true enough — if you’re looking only at the cost of housing.
But if you live a long way from most of the places you want to go, you wind up driving a lot more. And that, of course, costs money too — not just for gas, but also for depreciation on your car, maintenance and the like.
Which leads to the obvious question: what happens if you combine transportation costs and housing costs into a single budget? Is living at the urban fringe still cheaper?
There have already been a couple of attempts (see, e.g., here) to look this issue. Now there’s a new study, noted here in The Washington Post. The key finding: when you combine travel and housing, living in a suburban outpost can cost more than living closer to a town or city center. According to the study’s author:
Even if you save a couple of hundred dollars a month on your mortgage, it doesn’t nearly outweigh the costs of the cars you are driving.
Obviously, the more money you spend on your car, the more you’re sinking into a depreciating asset. Buy a house and a decade later it’s worth more than you paid for it (provided you didn’t buy at the top of a bubble). Buy a car and a few years later you’ve got a bunch of gas receipts and a car that’s worth just a fraction of what you paid for it.
Which means that shifting your spending from your car to your home can be a good way of boosting your long-term finances.
Another point worth noting:
The study found that most people in the outer suburbs pay so much for transportation not just because of long commutes but also because they have to use their cars for nearly every errand and trip.
That seems right to me. When most people think about transportation costs, they think about commuting. But for the typical household, commuting represents a surprisingly small share of total driving. And if you live in the sort of place where every trip — every errand, social visit, you name it — requires a car, the miles and the costs can add up quickly.
Now, on the one hand, it seems that a study like this reveals something genuinely new. Many folks who’ve chosen long commutes to inexpensive houses may just not have done the math, to tally up the cost of all that travel. If they’d really taken the time to consider the savings they might reap if they could drive less — or even get rid of one of the family cars — maybe they would have chosen a different place to live.
But on the other hand, not everybody will be swayed by this sort of reasoning. People looking to buy a house in the exurbs aren’t just looking for cheaper housing. Lots of people are looking for something else — a big yard, a sense of privacy or solitude, a school system where they think their kids will be better off, a certain kind of community layout. And they’re willing to pay for those things — perhaps not in housing costs, but certainly in money and time spent on, and in, their cars.
But in the end, there’s no inherent reason people can’t find good communities, or good, safe schools, or quality open space, or even privacy, in more densely populated places. Those kinds of livable, urban, and dense suburban neighborhoods exist already — there just aren’t enough of them. And that’s what makes housing there so expensive: lots of people want to live there, so the demand is high; but there’s not much of a supply. So if we do a good job increasing the supply of good neighborhods — with a high quality of life, and where stores, services and jobs are close by — then high-quality housing will become more affordable, even as transportation costs fall.
Of course, there is one exception to the we-can-have-it-all fantasy in the preceding paragraph: big yards, fenced off from the public. It seems to me that there’s just no way to give everyone a big lawn and a short commute. The math just doesn’t work out: big yards just spread everything too far apart, and cars start to become a dire necessity rather than an occasional convenience.
Which leads me to believe that you really can have affordable housing and transportation, great neighborhoods, and great big yards. You just can’t have all three at once.