Stop Commuting…Buy a House Worth $74k More!
What if I told you that if you stopped commuting, you could afford a house that costs $74,000 more? You’d probably think I’m crazy. Then, you’d probably start thinking about how much you hate spending over an hour a day in traffic, and how you’d like to have nicer digs instead.
Let’s assume you’re the most average Columbusite out there. You live in Dublin, Powell, New Albany, or Pickerington and your commute downtown is about 15 miles each way. You can find a cheap parking lot downtown that only charges $50/month, and your car gets a respectable 25 miles per gallon. Finally, lets ignore that ugly picture up top and foolishly assume you get a bargain on gas at only $2.50/gal. Here’s what your average commuting costs are…
Using a tool from the St. Louis Metro website and AAA National Composite Estimates, you can see that between gas, tires, oil changes, regular maintenance, repairs, depreciation, insurance, and parking, you’ll spend over $461 per month!
By applying that $461/month to a 30 year fixed loan at 6% interest, you can afford a loan that is $74,000 more without changing a thing. All of the sudden, that downtown condo just became a little more attainable.
Granted, this plan might not work for everyone. You have to sell your commuter car to realize all of these benefits (ditch the insurance), but it’s possible to do that in many urban neighborhoods in Columbus. Add a streetcar into the mix, and it’s almost painless.
Paul, one of my regular readers, will surely counter that his parents in Westerville drive a Prius and do all of their maintenance, and that’s a great way to reduce that $5,359 annual tab a little bit. I tried to pick average (or even conservative) numbers, but as they say in the auto industry, “actual mileage may vary”.
Great…..what if you don’t work downtown or you do and your spouse doesn’t????
I suppose that you could use that $461/month to offset a decrease in take home pay at a new job. With payroll deductions being around 1/3 of your gross, that calculates to a gross salary decrease of around $8,300/year that you could handle.
This isn’t just specific to downtown either, it’s just easier to go carless there (or reduce the family fleet from 2 to 1). If you could find a way to live close to your suburban job, you could also realize these savings.
The spouse thing can throw a little wrench into things; but chances are, it still would be MUCH cheaper if one person is driving a bit further, while the other is walking to work.
Great post! Nice research!
The kid thing can throw a bigger wrench in the works. Shuttling these guys around and schools are the biggest impediment to the analysis you present. We didn’t go far (Clintonville) but private schools and/or daycare will run about 10-15K/year and you’d have no choice to go with private schools if you lived downtown. And that’s for 17 years.
My parents both drive Hondas (Civic and Accord), so good gas mileage, but not quite a Prius. However, they both work relatively close to home (one in Westerville, one in Worthington). So it would make absolutely no sense for them to ditch their cars, as they are also used for driving other places (trips to visit family, doctors appointments, etc.) My mom’s car getting close to 40mpg and being paid off, with low insurance rates, and the only maintenance being oil changes, does not cost very much annually to operate. So I think they’re doing pretty well, considering. Of course, neither one is as good as me at saving money in their commute. I bike to work. It was indeed killing me when I used to live in the suburbs and drive downtown. The cost for gas alone, plus miles on the car, plus the time spent wasted in traffic (not to mention the aggravation). For me it was a no-brainer to move downtown. However, that is not the case for everyone.
I think CSS’s point is well taken whether or not it’ll work for everyone. Let’s face it, if it’s happening in Columbus, it’s happening downtown, or maybe on campus (or maybe at Capitol or ODC). What everyone fails to consider is that downtown Columbus can mean more than the Central Business District and expensive condos. They’re practically giving homes away in Franklinton and there are still lots of good homes available for good prices in Olde Towne East and Bronzeville, Woodland and Franklin Parks.
Yes, I have kids and yes, they don’t go to the local public school. We talk the urban talk but when it comes to our kids school, it’s just not possible. It will all change eventually and it begins with density, home ownership and services that make urban neighborhoods walkable every day living environs.
Then, we can all buy Vespas.
joe peffer - ColumbusHomesBlog
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