Living In The City Vs. The Suburbs: Pros And Cons

There’s a lot to like about buying a home in the suburbs instead of the city.  Houses are bigger and more affordable on the outskirts.  Arguably, the quality of life is better too.  Small communities have quality schools, low crime rates and plenty of amenities nearby, which is desirable when you’re raising a family.

Related: Pros And Cons Of Waiting To Buy A Home

On the other hand, most jobs are located in the city, so if you live in the suburbs you’ll be faced with a long commute each day.  That means more time and money spent travelling to work.  With gas prices touching $1.40 in some provinces, the extra costs can really add up.

City vs. Suburbs

Friends of ours, Dan and Heather, built a house in a small town about 35 kilometres from Lethbridge, AB.  They used Mayflower moving to save costs on the residential move.  Their home cost $320,000 – about $100,000 less than a similar home in Lethbridge – and their lot is twice the size.

Heather works in town, and Dan works in Lethbridge.  His drive to the office takes about 35 minutes each way.  Between his daily commute, and their trips into Lethbridge for grocery shopping and entertainment, they spend $550 a month on gas.

Related: Is A Long Commute Destroying Your Job Satisfaction?

We chose to build our house in a new community in Lethbridge, which is only 3.5 kilometres from where I work.  Our home cost $420,000, and the lots are smaller than what we’d get out in the suburbs.  Since I have such a short commute, we only spend $125 a month on gas.

Which is cheaper?

Most people assume that living in the suburbs is much cheaper than living in the city.  And while Lethbridge is not exactly downtown Toronto or Vancouver, the comparison between city and suburbs is still valid.

So who’s better off?  Financially speaking, it’s a bit of a draw.  Let’s look at the numbers.

Dan and Heather put 20% down on their home, and have a mortgage of $256,000.  Their mortgage payment is $1,210 a month, and property taxes are $200 a month, for a total monthly cost of $1,410.

We put a bit more than 20% down, and we’ve increased our monthly payments to pay off our mortgage faster.  However, to keep things simple, let’s assume we also put 20% down.  That leaves us with a mortgage of $336,000.  Our monthly payments are $1,590 and property taxes are $250 a month, for a total monthly payment of $1,840.

Related: How Much House Can I Afford?

So, we’re spending $430 more on housing costs than Dan and Heather, but that’s offset by the $425 more they’re spending on gas.

It’s about lifestyle

If there’s no financial benefit to living in the suburbs vs. living in the city, it must be about lifestyle.

Dan and Heather enjoy spending time with the kids in their big backyard, and having friends over for BBQ’s in the summer.  They live on a quiet street in a good neighborhood, and their kids will go to a small school and get lots of attention from their teachers.

But I like to bug Dan that I can get home from work, change my clothes and be at the driving range before he’s even halfway home.  I like that it takes less me than 10 minutes to get to and from work, and that’s something many downtown residents in larger cities enjoy as well.

Related: 4 Hidden Costs When Buying And Selling Your House

Many people I know who live and work in downtown Calgary have a quick bus ride or a short walk to and from the office.  Other friends bought houses in Airdrie and Okotoks to get out of the city, but they drive 45 minutes to an hour to and from work each day.

Final thoughts

You’ll pay less to live out in the ‘burbs, but the savings will be off-set if you commute daily in-and-out of the city.  So if it’s a wash financially, you’ll need to evaluate other factors when deciding where to live.

If you value your time and can’t stand a long commute, then you’ll need to pay more for a house in the city closer to work.  But if you’re looking for a quiet life with a big yard to enjoy, maybe a house in the suburbs is right for you.

Do you prefer to live in the city, or the suburbs?

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  1. MikeO3 on September 17, 2012 at 5:24 am

    My wife and I grew up in the city as kids & teenagers and moved to the suburbs because it was the only place we could afford a house of our own. We were on a 5 year plan and fully intended to move back to the city… 25 years later we are still in the burbs in a larger house backing on to a large park. There is something to be said for fresh air & seeing stars in the night sky at night.

    I commuted by regional train for 15 years (35mins door to door). Seriously, I don’t miss the city dirt, grime and overcrowding one bit. Sure the lifestyle is completely different for nightlife, local grocers and entertainment but frankly at my age… It no longer matters.

    • Echo on September 18, 2012 at 10:38 am

      @Mike03 – Young families are certainly drawn to the suburbs due to more affordable housing and because they don’t want to raise kids in the city. If you have access to good public transportation, that’s definitely the way to go.

  2. Mrs. Pop @ Planting Our Pennies on September 17, 2012 at 6:21 am

    Interesting analysis. But “city” can mean such different things. Technically I grew up in a “city” that had half a million people in it – but there wasn’t really a dense urban center where the jobs tended to be. Everything was super spread out and jobs were all over the place. It’s actually pretty similar to the scenario that I live in now.

    • Echo on September 18, 2012 at 10:39 am

      @Mrs. Pop – Yes, every city is different. Technically, I live and work in the suburbs, and my friend lives in a bedroom community outside the city limits. That’s becoming more common these days.

  3. Alya on September 17, 2012 at 8:16 am

    I always find it funny when “low crime rate” is one of the reasons people site for moving to the suburbs/small towns. Crime rates (including violent crimes) are higher in small towns/rural areas.
    Obesity rates are also higher in the suburbs. So, one can add health care costs to the costs of living in the suburbs.

    • Echo on September 18, 2012 at 10:42 am

      @Alya – That article points to higher murder rates, which are quite low in Canada anyway. It also states that property crimes and minor assaults are higher in the city, which is what most people refer to when they talk about crime and safe neighborhoods.

    • Brady Patterson on May 20, 2014 at 6:03 pm

      Not only that, studies have shown your chances of being murdered in the city are more than offset by your chances of being killed in a traffic accident commuting to the suburbs, making even a crime-ridden city the safer choice.

  4. W at Off-Road Finance on September 17, 2012 at 9:46 am

    The obvious solution is to find a situation where your job AND your house are in the suburbs. In other words, adjust the salary of jobs by the local cost of living when deciding where to live/work.

    I’ve seen more hard working people rendered poor (in a net worth sense) by big city living than by any other single factor.

    • Echo on September 18, 2012 at 10:44 am

      @W – Agreed, if you can find a good job in a small city close to where you live, that’s the best of both worlds.

      • Brady Patterson on May 20, 2014 at 6:05 pm

        Not necessarily.. You are ignoring the fact many people actually prefer an urban lifestyle, where one can walk to most everything one needs, and not be car-dependent for everything.

  5. SE Book on September 17, 2012 at 12:36 pm

    I think it really depends on the persona and the city in which they reside. In the city i grew up in there wasn’t much need to drive to the store or restaurants cause they were so close. But now I live in a city where there isn’t a convenience store I can walk to easily and have to drive everywhere.

  6. James on September 17, 2012 at 1:17 pm

    I”ve always considered myself a city person. But, I recently moved to a suburb. For me, when I was single, the city was great. It had a lot to offer with the proximity of work and the nightlife. Cabs were readily available and nothing seemed to far. Now that I have a family, and the only thing I seem to do everyday in the city is work, the suburbs are a better fit. We are close enough we can use public transportation and keep our commuting cost to around $100 a month. SO, not only do we have more space, it is better for the kids. We also save money because we feel we can send our kids to public school instead of a private school.

    • SE Book on September 18, 2012 at 2:09 pm

      that is one thing I failed to mention, Space. You can get much better deals for more space in the suburbs, My parents moved into a good district so we could get out of private school and into a good public one, because the City public schools in my city are kinda scarry.

      • Brady Patterson on May 20, 2014 at 6:22 pm

        To some degree, it’s a question of space vs. location. A whole lot of space in a place you don’t want to be isn’t worth much.

  7. Joe on September 17, 2012 at 1:47 pm

    That’s a legitimately challenging question.

    “Living where I work” is pretty important to me. I get more exercise by walking and I waste a lot less time and money on commuting.

    When I started work in Toronto, the downtown is very expensive (although the imploding housing bubble is starting to put downward pressure on prices). So I hedged my bets and lived in the east end.

    Now, I live in a small town to reduce costs while I’m on leave. Needing a car sucks cause it costs more, but life is just vastly less expensive. As for my return to work — with telecommuting and such, I might be able to stay well outside the city (although I’m thinking more southern Ontario) and stay in a hotel once a week.

    The reason I’d be fine sacrificing travel time/cost to stay well outside TO clearly means my “live where you work” ethos has changed a bit. I definitely don’t want to raise kids in downtown TO.

  8. krantcents on September 17, 2012 at 3:01 pm

    When our children lived at home, it was more important to live in the suburbs. More room and more places for our kids to play and enjoy their freedom. After we downsized, we moved closer in because we liked the city services and conveniences of the city.

  9. Chris on September 18, 2012 at 12:08 pm

    You are forgetting one thing. Sometimes the suburbs can be outside the city limit. That is what is the real cost advantage. I live 1/2 hour outside of the city and have 100 acres, still a pub and local store in bicycling distance and yet pay only 1/10 of the property taxes of suburbia and of course paid 1/4 less for the house (a 2008 build modern home). I am connected via a 4 lane Hwy and commute along all sorts of shopping which I take care of on my way home.

    What I am saying is, suburbia can be a lot cheaper or more expensive than downtown living, it’s all about research and planning.

    Of course it is a live-style choice, but a little research before moving somewhere can save thousands.

    Great article.

  10. Garrett @ Samurai Trading on September 20, 2012 at 4:36 pm

    Nice analysis! I personally could never live in the suburbs as the lifestyle would drive me crazy.

    For years I did consulting work that kept me on the road for long drives all the time. Now even though I work mostly from home I can’t even stand the idea of a 10 minute drive to get groceries. Everything in walking distance for me!

    Even if that means some extra costs (and the above suggests it doesn’t) I am happy to pay it for being a bit happier. And because I am self-employed happiness tends to equal more income as well. So a win-win.

  11. Antonlerchner on October 13, 2012 at 6:01 pm

    I live in Edmonton, perhaps the only city in Canada where the most affordable homes are close to downtown! People who grew up here think I’m crazy living in the “inner city,” but I love it. Only 10 minutes to ride my bike to work downtown.

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