by Justine Kim

It’s a big choice for many developing families, newlyweds and young people.

When you think urban, images of the “big city,” like busy downtown streets lined with shops, restaurants, bars and towering high rises may fill your mind. All of these images are actually quite accurate. Many urban cities do look like this, especially the big metropolitan ones in North America, places like New York City and Toronto.

In contrast, the suburbs can be defined as a district lying immediately outside a city or town. To stereotype “suburbia,” visualize white picket fences, Stepford wives and happy nuclear families. It has been hyped for the benefit of more space, less traffic and a safer environment to raise children. The idea of suburban life came around when urban planning models shifted to low density housing. Development began outside of the city and the housing was built with larger spaces between houses, affording each home a lawn or garden.

It will ultimately boil down to lifestyle preferences when deciding between the two, but understanding the true cost of both is important to factor into your decision of where to live.

A Roof Over Head

If you are looking for a roof over your head in the downtown area, you should expect to pay more. A condo of equal square footage on the outskirts of the city is likely to be significantly cheaper and as you get further from the city, the price will drop even more. Rental rates can also be higher in urban areas.

Many say that you get more for your money in the suburbs. This is quite accurate, as one can buy a two-storey house with a garden and backyard in the suburbs for nearly the same price as a condominium in a sought after urban area.

Paying The Bills

The cost of water and electricity should be considered when purchasing housing or considering rental accommodations. Although rates may be comparable in the city and the suburbs, it would probably take more energy to heat and upkeep a larger home than a smaller condominium.

Many of the older houses, townhouses and apartment building in downtown areas are not energy efficient. Newer houses built in the suburbs may have energy-saving systems, which could cut the cost of your utility bills.

The Tax Man

You ultimately pay more for suburban infrastructure development and maintenance, since you have to build more of it to serve fewer people. Your tax dollars won’t go as far in the suburbs as they do in urban neighborhoods, so although a house in the suburbs may be less expensive on the market, it may actually cost more to support when it comes to public services and infrastructure. Because there is less tax money, some social and civil services may be lacking. The city on the other hand, has the tax money of a bigger population to draw on.

Getting To And From

In urban areas, everything is quite compact, so you can easily travel from place to place by walking or accessing public transit. Taking the bus or subway can be quite cheap. The cost of one bus fare in many Canadian cities can range between two to three dollars. If you are a frequenter of the transit system, you can buy weekly or monthly passes and enjoy unlimited travel to save money.

For those living in suburban areas, there may be many hidden costs in transportation that you may not have considered. A study of 27 American metropolitan areas by the Centre for Housing Policy found that the cost of commuting cancels any savings on lower-priced suburban homes. Those who own cars know the pain of the skyrocketing gas prices experienced by many Canadian cities. Workers that have to drive into the city for their day jobs can shell out immense amounts of gas money, not to mention the insane prices for parking downtown.

For those that do not have access to a car, getting around in the suburbs can be quite a challenge. If a transit system does exist, it may not be as well serviced as one in an urban area. Routes may be limited and service infrequent. You may have to resort to taking a taxi and that can hit your wallet hard.

Things To Do, People To See

It is not just a myth that the cost of many goods and services is generally higher in an urban setting when compared to prices in the suburbs. If you are looking for a haircut in a trendy downtown salon, expect to pay more than you would in the suburbs. Prices for clothing can also be hiked up in chic urban boutiques, even for the same products or brands that you can find cheaper at a lower profile store in the suburbs. Even prices at the same chain restaurant can fluctuate between urban and suburban franchise locations.

The people that I know who live downtown are also more likely to access these goods and services. Since everything is “right at your doorstep”, you may find yourself going out more often to restaurants and bars. Since cites are more dense, they can support more museums, theatres and galleries. Your proximity to the entertainment may make you more inclined to pay for a visit.

Suburban Home Or Urban Condo?

One is clearly not better than the other and it is a personal decision you must make. As you contemplate your options, I hope some of these financial considerations help you tally up a cost comparison for the area and market you are looking in.