7 Cost Considerations For Moving To A City Vs. A Suburb


Would You Pay More For Amenities and Convenience Or Peace And Quiet?

Everyone knows there’s a distinct lifestyle difference between living in a city and living in suburb. Which lifestyle is better is for debate. Both have their advantages and disadvantages. However, if it’s the cost of living that will ultimately decide which one you choose, there is no contest. Here are some cost differences to consider if you are choosing between living in the city and living in the suburbs. SEE ALSO: 6 Need-To-Know Tips For Relocation To A New City On Your Own

1. Housing Costs

One of the main reasons people decide to live in the suburbs rather than a metropolitan city is because of housing costs. Since cities have limited space for expansion, and therefore fewer options to choose from, there’s higher housing demand that results in higher prices. So, living in a suburb will definitely get you more property for less money. For example, according to Zillow, $300,000 in the downtown area of Nashville, Tennessee will only get you a one-bed, one-bath, 803 sq. foot condo. However, if you take a 30 mile drive northeast to the suburbs of Gallatin, you can get a 2,720 sq. foot, four-bedroom, three-bath home for just under $280,000, and on a prime golf course, no less. Who pays more: City

2. Utilities

Figuring out who pays more for utilities is a little trickier. While utility costs will differ depending on the provider, people living in largely populated cities are generally charged a higher price for services. However, the total cost on a utility bill is dependent on each household’s usage, and since properties tend to be bigger the further away from the city, they usually consume more gas, energy, and water per month. So, between the city and the suburbs, the cost difference for utilities is balanced out by the amount of services required. Who pays more: Tie

3. Taxes

When it comes to taxes, there are two main things you need to consider: city income tax and property tax. Starting with the first one, some major cities levy their residents a city income tax on top of state and federal taxes. Luckily, there are only 14 states, plus the District of Columbia, that allow a few of their cities/counties to do this, but the rates can be as high as 10% of an individual’s state income tax. Luckily, property tax in metropolitan cities are considerably less than in the suburbs. In fact, a New York Times article did a comparison between what a hypothetical upper-middle-class income family would pay when living in an apartment in Brooklyn, NY versus a house 30 minutes away in South Orange, NJ. Even though the income tax in New York would be 21 percent more than in New Jersey, the whopping $16,000 in property taxes for the house put it ahead in overall costs. Who pays more: Suburbs

4. Insurance

Insurance rates are determined by an individual’s risk, so the type of environment a person lives in will influence how much of a risk he or she is perceived to have. For the most part, a higher populated area is believed to have more risk because there are more opportunities for hazardous situations. Take auto insurance for example: a big city means more people, more people means more cars, more cars means more accidents, and more accidents means more insurance claims. This leads to you being charged more for your insurance rate. Homeowner’s insurance, on the other hand, is more concerned about the risk of the home being damaged than anything else.  So, if you live in an area that is more prone to natural disasters or is a greater distance away from helpful resources, like a fire department or large water source, you can expect your premium to be a lot higher. Who pays more: Tie

5. Employment

Unless you live in or around a major city, chances are there aren’t many high paying jobs for you to choose from. After all, most small towns have little need for an anesthesiologist, manufacturing engineer, or software developer. The unemployment rate is also much higher in the suburbs, mostly due to the lack of jobs available—low paying or otherwise. So, if you need to find a job, whatever the pay, you’re best bet is to look in the city. Who pays more: Suburbs

6. Transportation

You’ll definitely save more in big cities where walking and using mass transit are cheaper options than paying for the car and gas you would need to drive everywhere in a more sprawling suburban location. Plus, if you’re part of a big household, you’ll likely need more than one car, which means significantly more payments, gas, and auto insurance. However, if you choose to own a car in the city, your auto insurance rate can be higher and you’ll also have to worry about parking fees. Who pays more: Suburbs

7. Amenities

While city living is known for its wide array of available comforts and amenities, the convenience of  having a grocery store down the block and several restaurants across the street is going to cost you. With so many options to choose from, stores and businesses set competitive prices to keep up with each other, and since the average income is so much higher in the city, prices for goods and services are higher. Another thing to consider is that having all those easily accessible niceties around you may tempt you to spend more money. With bars, restaurants, and entertainment venues a short walk or train ride away, who can resist? Who pays more: City SEE ALSO: Safety Tips Every New Home Owner Should Use In the end, it all comes down to how much you are willing to pay for the lifestyle you want. The conveniences and on-the-go atmosphere of the city won’t get you much in terms of housing and expenditures, but you could save on transportation and are more likely to find a high paying job. Living in the suburbs, on the other hand, will get you the peace and quiet you’re looking for, but it’ll cost you more a month on property taxes and car payments. Whatever your preference, if cost is an issue, make sure you look over your finances and potential expenses carefully before making your decision.
Date of original publication:
Updated on: November 10, 2015

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