« VOG and Geckos | Home | Jane’s Walk »
April 30, 2008
Costing out urban vs suburban living
A few years ago when a real estate marketing company was promoting a downtown Vancouver condo project, they argued that a couple who could forgo automobile ownership would save the equivalent per year in expenses that would allow for an additional $100,000 worth of a mortgage. That is, skip auto ownership and you could afford to spend say $400,000 on your home instead of $300,000, which would by you more space or amenities downtown. Cars cost that much to household budgets.
Going unspoken were the intangible benefits of being close to places of work and play, saving time and allowing a richer life.
Now NPR’s Marketplace (via Planetizen) is now reporting that a tight economy may push more people to recognize the benefits of living closer to work and other urban amenities. Reporter Stacey Vanek-Smith summarizes some findings of a recent report by The Environmental and Energy Study Institute and the Urban Land Institute:
In compact cities like Portland, Ore., people spend about 10 percent of their discretionary incomes on transportation. In sprawling metropolises like L.A. and Atlanta, it’s more like 35 percent and climbing thanks to rising gas prices. Policy Analyst Jan Mueller says that could make city living look a lot more affordable.
It would be interesting if individuals, couples and families trying to decide where to live could fully cost their choices in any given metro area, and suburb or inner city of that place. In addition to the objective monetary costs of once choice versus another other factors could be given a value. For example, having more (or less) time to spend with family could be given a score — subject to the values and preferences of the individual and taking into account happiness studies and other measures. Similarly, having free time along with the opportunity to pursue other passions or hang out with friends, or attend concerts would also be given a value.
In tough times when everyone is looking to obtain more with less, if such a calculus existed (and maybe it does) perhaps more people would consider having a smaller home but more disposable income and time.
Addendum: Gordon Price penned an article on the subject of commute costs and real estate prices at the same time as I wrote this one. His much more eloquent discussion can be found here.
Topics: sprawl, resident attitudes, downtowns, urban lifestyles, residential development, revitalization |
May 3rd, 2008 at 6:00 am
There’s been a lot of work done on this over the years, i.e., Peter Newman. The work behind the creation of the Location Efficient Mortgage is another. Etc.
Another interesting dimension is the cost to provide infrastructure and service sprawl vs. compact. I have a link on my blog to a study of this in Nova Scotia maybe.
January 11th, 2010 at 9:24 am
So, the central question for readers of ULI’s reports should be, is it possible for this data and its conclusions to be objective, especially seeing that very large business interests have played a significant role in producing this information ? Furthermore, do these conclusions directly or indirectly benefit the companies behind the ULI, because if so, then the information they provide is invalid, and can’t be used for any objective purpose.
One must always view the reports from such organizations as the Urban Land Institute with discerning objectivity, seeing that many such organizations have hidden objectives and motives beyond what is being stated in their reports. For example, the ULI’s board of directors is primarily made up of executives from building management companies, Property management companies, who are in business for one single reason, that being making profits.