- sincx
- Jul 13, 2012
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furiously masturbating to anime titties
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Something that always gets lost in discussions of how much cheaper suburban living is: many of the costs of suburban housing are hidden.
For example, because owning a car is necessary to survive in most (American) suburbs, any realistic look at suburban living costs needs to incorporate that. According to the AAA, the median cost of owning a car in the United States is $8,700 (and that's down from 2014 thanks to declining gas prices). This is not chump change. A look at the costs of living in suburbia should include, not just the $250,000ish* total cost of a 30-year mortgage for an "affordable" house, but also the $250,000 or so you'll spend owning a car over that same period.
In addition, maintenance costs are substantially higher than in an apartment. If you're buying an apartment, then you pay an HOA that defrays the costs of maintaining the building between all the residents (which are lower, per resident, than single-family houses). For a single-family detached home, you bear all the costs of maintenance. And don't forget the money spent on landscaping—many suburbs, either via HOA or actual law, have minimum standards for lawn care and household appearance. That's effectively another bill you're paying. And if you're renting an apartment, your rent usually includes some or all utilities, while SFH-owners/renters bear all those costs on top of the rent or mortgage payment.
I'm going to give an actual, personal example, because I'm close to different people who live on these extremes of "affordability" and "expensive". My brother and his wife lived in Seattle until recently (they moved to Toronto last year). Their 2-bed, 2-bath apartment cost $1500/mo, and that included all utilities. They did not own a car. They used Car2go and Uber about once a week each, which adds another $100, and they had two monthly ORCA passes costing about $100 each. That's $1,800/mo for the city.
My parents, meanwhile, live in the suburbs. Their mortgage is $700/mo, and utilities are another $270ish/mo, on average. The total cost of their cars are... variable. About $220 for insuring two cars, and an extra $20ish once you average out yearly maintenance and repair costs. Their cars' values are each depreciating at about $1,000 a year (judging from equivalent make and models, in good condition, currently on the used car market), which combined is about $170 per month.** That's $1,380/mo combined housing and transportation costs even before adding gas and car loans—which is the crux, really. When they were paying their car loans ($500ish/mo), that put them at $1,880 even before paying for gas, and they where paying more than if they'd lived in an expensive city. They use, by my estimation (I've seen their household budget spreadsheets and estimated based on what I know their cars' mpg are) about 160 gallons of gas a month. While both cars have been paid off for many years now, if gas costs anything more than about $2.63/gal, the savings from living in suburbia still completely disappear.
Even with current gas prices (about $2.15 to 2.20 where I am), there's only a delta of $76. Now, I'm not going to mock this amount—your income is what it is, and if you can't afford an extra $76 a month, you can't afford it. This does make a difference. That being said, it's not a significantly big difference, and it wouldn't explain why the housing market orients itself almost entirely around single-family houses like it does now.
*My parents bought a 4-bed/2-bath, newly-built house on the farthest edge of a suburban bedroom community in 2002. It was worth $125,000. Their mortgage payments are $700/mo, so that's $252,000 over the life of the 30-year mortgage. Also, I'm not kidding about the "farthest edge". It's a 20-minute drive to reach the nearest market, a 40-minute drive to reach anyplace of interest, and a 90-minute drive for my dad to get to work. My parents chose this trade-off; they went as cheap as they could go, short of moving into hicksville. They wanted to maximize the savings (stay in the cheap area, but take the high-paying job!), and ironically they're totally negating any savings thanks to his punishing commute.
**A 15-year-old car is not worth the $20,000 you paid for it when it was new. It's worth maybe a third of that, at best. Both economics and business accounting care about this, because it represents an expense—an outflow of wealth—whether you acknowledge it or not.
Good analysis, although there are two factors that do decrease the cost of owning a home.
1. When you pay rent, all the money is gone. When you pay your mortgage, a substantial portion of that goes into the equity in the home, which is your asset to keep.
2. The huge tax subsidy for the middle and upper-middle class known as the mortgage interest tax deduction substantially reduces the effective interest on a mortgage, further changing the calculation.
There are a lot of good arguments for eliminating the mortgage interest tax deduction, but short of a breakup of the United States into smaller pieces (and assuming some of the pieces end up significantly more left-wing), it's not going to happen.
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May 2, 2016 05:09
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May 10, 2024 05:00
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- sincx
- Jul 13, 2012
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furiously masturbating to anime titties
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The White House just put out an urbanism wet dream of policy prescriptions: https://www.whitehouse.gov/sites/whitehouse.gov/files/images/Housing_Development_Toolkit%20f.2.pdf
The essential message is that heavy-handed zoning restrictions cost money, increase inequality, and exacerbate segregation. The recommendations are:
-by right development
-tax or donate vacant land
-streamline/shorten permitting processes
-eliminate parking minimums
-allow ADUs
-establish density bonuses
-zone more high-density and multifamily
-inclusionary zoning
-development tax or value capture incentives (not sure what this means as I haven't read the full paper yet)
-property tax abatements
Too ambitious.
Local politicians won't forget that their votes come from current residents and not DC or prospective residents. Focus first on one or two things that can be tied to federal funding. Otherwise it's too easy for the city council to say "Obama wants all the 'undesirables' to move in."
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Sep 26, 2016 19:26
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- sincx
- Jul 13, 2012
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furiously masturbating to anime titties
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Why does it have to be one or the other?
I get subsidized parking and $100/month in transit reimbursements. I take the train to work most days, but will drive when I have errands in town or if I need to get to/from work at unusual hours.
It's probably a lot easier to convince people to take transit 3-4 days a week versus not driving entirely. One of the ways to do this is to encourage employers to offer both transit and personal vehicle commute subsidies instead of forcing employees to choose one or the other.
sincx fucked around with this message at 06:18 on Nov 1, 2016
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Nov 1, 2016 06:16
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May 2, 2016 05:09
