Is City Life Actually More Expensive?

City life has long been associated with high living costs and expensive housing prices.

Many people believe that living in the heart of a major city is only for the wealthy, but is this perception actually accurate?

In this article, we will compare the cost of living in the suburbs versus city centers around major U.S. cities and also take a look at how these cities compare to international cities like London and Amsterdam.

Why Suburbia is Cheaper:

Even with added costs for gas and food, living in the suburbs and building equity into your own house is ultimately cheaper than living in the city. However, suburbs require a loss of time with commuting and don’t offer as many amenities or exciting events or locations as cities do.

Table of Contents

Introduction

[Please note: Data is based on rates in 2023]

In general, suburbs tend to have lower overall housing costs and lower crime rates compared to city centers.

However, city centers often have better access to public transportation and a wider range of cultural and entertainment options, which can offset the higher housing costs.

In terms of transportation, living in the suburbs typically requires a car, which can be expensive in terms of gas, insurance, and maintenance costs. In contrast, city centers often have better access to public transportation, which can be less expensive and more convenient.

Not to mention that you rent instead of building equity in a city – unless you own a townhouse or apartment.

Is renting in the city cheaper than buying in the suburbs?

In this article, I will compare housing costs and living in various cities and suburbs in the United States, Amsterdam and London.

I will also discuss the differences in the cost of renting or buying an apartment or a house and the cost of living, including transportation, food, and leisure activities.

We will also discuss the pros and cons of living in the city versus the suburbs, such as better access to public transportation, a wider range of cultural and entertainment options in the city, and lower housing and crime rates in the suburbs.

City vs. Suburbs: United States

In this section, I will compare buying and renting housing prices in Chicago, New York City, and Los Angeles – both in the city and the suburbs within 30 minutes of the city:

Housing Costs in Chicago:

According to Rentcafe.com, the cost of rent for apartments in Chicago averages $2,224/month, varying based on various factors such as location, size, and quality.

The average size of apartments in Chicago is 749 square feet for a small studio or 1-bedroom apartment.

That means you are paying roughly $2.97/per square foot.

According to Realtor.com, in January 2023, the median price of homes listed for sale in Chicago was roughly $330,000. The median price per square foot for listed homes was $232 (roughly 1,422 square feet), while the median price of homes sold was $295,000.

Housing Costs in Manhattan:

According to Rentcafe, the average monthly rent for an apartment in Manhattan, NY, is a staggering $4,501.

Not to mention that the average size of an apartment in Manhattan is 704 square feet – meaning you are paying $6.40/per square foot.

If you’re looking for a more affordable option, consider exploring budget-friendly neighborhoods in Manhattan, such as Marble Hill. Here, the average monthly rent is much more manageable, coming in at $1,682.

Of course, it’s important to remember that this is still significantly higher than the average rent in many other parts of the country.

As for housing prices, the amount is nearly astronomical:

According to Zillow.com, “The average New York home value is $782,365, up 5.8% over the past year…”

These suburbs are generally within driving distance of the city – such as Hoboken or Greenwich.

However, further from the city, in a place like Poughkeepsie, NY, the average house price is roughly $360,000 – according to Realtor.com. This is more in line with Chicago prices.

Housing Costs in Los Angeles:

As reported by Rentcafe, the average monthly rent for an apartment in Los Angeles, CA, stands at $2,786. This is based on the city’s average apartment size of 789 square feet.

That’s about $3.53/per square foot.

Vermont Knolls is one neighborhood that may be worth considering for those seeking more affordable options. Here, the average rent is much lower, at $1,522 per month, making it a more budget-friendly option for residents in Los Angeles.

In the city of Los Angeles, the cost of homes reaches the millions. However, according to Realtor.com, Lancaster is known for having a high number of affordable homes.

The median listing home price is roughly $450,000, while the median price per square foot for listed homes is $256. Lancaster’s median sold home price is $425,000, indicating a strong and steady market.

City vs. Suburbs: International

Here, we’ll discuss the housing prices and costs in Amsterdam and London as two comparisons for what to expect:

Housing Costs in Amsterdam:

According to Numbeo.com, the estimated monthly cost for a family of four in Amsterdam without rent is $3,311.3 (3,098.0€). The monthly cost for a single person is estimated at $951.8 (890.5€) without rent.

Living in Amsterdam is cheaper than in New York, with the cost of the living index showing that it is 32.9% less expensive.

However, the average monthly living cost without rent is about $3,350.20 for a family of four in the Netherlands as a whole, which means that even in suburbia, the costs of living are high.

Housing Costs in London:

Living expenses for a family of four costs about $6,940.80/month in London, meaning that it costs, on average, over $1,000 more to live in London than in Amsterdam.

In towns outside of London, such as Kingston upon Thames, a family of four costs about $3,970/month.

Therefore, living in the suburbs outside of London is cheaper than in the city itself – provided that you don’t commute!

Added Living Costs (in General)

When considering the cost of living in a particular area, it’s important to factor in housing costs and other necessities such as transportation, food, and leisure activities.

Gas and Transportation:

As of 2023, an average gallon of gasoline in the United States costs roughly $3.49.

Assuming a typical commute of 30 miles each way, five days a week, with an average fuel efficiency of 25 miles per gallon, the monthly cost of commuting by car would be around $213.5 (assuming gas prices remained constant at $2.19 per gallon).

According to globalpetrolprices.com, “The average value for London during that period was 1.57 U.K. Pound Sterling with a minimum of 1.48 U.K. Pound Sterling on 23-Jan-2023 and a maximum of 1.66 U.K. Pound Sterling on 31-Oct-2022.”

The actual cost could be higher or lower depending on various factors such as traffic and fuel efficiency. Remember, this estimate does not consider other costs associated with car ownership, such as insurance, maintenance, and repairs!

So, considering all the time and money it takes to drive into the city from the suburbs to work, you could be spending hundreds, if not more, on gas.

In contrast, city dwellers use buses, subways, or trains to get where they need to go. Most are paid for by the government or cost half that amount (roughly $150-$170) in bus and train fares.

Grocery and Restaurant Costs:

Even if you live in the city and don’t have to commute, buying groceries or stopping for a restaurant meal will cost more than in the suburbs.

The average monthly grocery bill in the United States is roughly $200 – $400 per person. That mostly includes your essentials (bread, milk, eggs, rice, produce, meat) and your non-essentials (cheeses, spices, specialty meats, sweets, supplements, canned and packaged goods, etc.).

The average cost of groceries in Amsterdam is around €200 – €350 per month. – Housinganywhere.com

If you decide to eat in town or at a fast food place, that price goes up.

For example, if you live in the suburbs, you are more likely to stop at a fast food place on your way home. Fast food chains such as McDonald’s and Subway offer meals starting at around $5. Five Guys and Shake Shack can have meal prices from around $8 to $10.

In the city, though, any lunch or quick meal can cost around $10 to $15 at the lower end. This could get you a sandwich or salad from a deli or fast food restaurant.

That doesn’t even include a drink or dessert, meaning $70+ per week spent on lunch during your work day!

Additionally, lunch prices in tourist areas and high-end restaurants can often be higher compared to other areas of the city. This is much more than in suburbia or surrounding neighborhoods, where fast food is more common.

After-Work Activities:

If you go out after work with coworkers or friends in the city, you can expect to spend anywhere from $5 to $15 or more for a single drink, such as a beer or mixed drink.

You can expect higher prices at a more upscale bar or nightclub for premium liquors, specialty cocktails, and other drinks. The drinks at these venues can range from $15 to $20 or more per drink.

Even when you take advantage of “Happy Hour” and get drink discounts, office workers looking to buy a drink in the city before driving or walking home can expect to pay quite a bit of money.

In smaller neighborhoods or in suburbia, you will reach that $5-$9 pint of beer price point. Even if you get a mixed drink at a chain restaurant, the cost will still be in the $7-$10 range.

That makes it cheaper overall to eat and drink in the suburbs than in the city.

Entertainment:

Even though the cost of entertainment in the suburbs is lower than in the city, the value of entertainment is much higher in the city.

For example, a movie ticket at your local mall theater in the suburbs might be about $10, but a cover charge into a bar or nightclub with live music, games, trivia, or karaoke might be $10, too!

That is not to say that a movie is less valuable than trivia night at a bar, but rather that there are more options in the city for roughly the same prices as in suburbia.

Also, there is a lot less to do in the suburbs – and far outside walking distance!

In the suburbs, you might attend a weekend farmer’s market, shop at a strip mall, or stroll on a walking trail, but you would almost always have to drive to your destination – and those events usually don’t change or get more interesting as time goes on.

In contrast, you can walk or take the bus anywhere in the city, and there is always something to do!

Cultural festivals, art exhibits, live music, museums, tours, comedy shows, theater performances, and more are available most of the time.

So while the cost of entertainment might pile up faster in the city, the overall value you are getting – as well as the wide variety of options – may make that cost worth it.