Archive | December 2013

Which costs more: A single-family home or a condo?

Most of us tend to believe that downtown condo living is expensive—certainly more so than living in a suburban single-family home.  But what if I could shatter that preconceived notion that urban living is prohibitively expensive?

I decided to do a quick and dirty analysis of two equally priced properties for sale in Austin—one a typical Ranch-style home in the northwest part of town, the other a trendy condominium in the heart of downtown.  Naturally, I had to make some assumptions about the potential buyer to make the comparison fair.  I assumed that a couple would be making the purchase, and that both work somewhere in downtown.

Here’s what I started with:

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The biggest contrast here is that the downtown property is much smaller than the house out in the ‘burbs, thus making the per-square-foot cost for the condo much higher than for the house.  That should come as no surprise.  Assuming this couple is more concerned about location than square footage, we’ll soon see how this plays out in the calculations.  First, the comparison of monthly mortgage costs:

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Because the properties are the same price, the mortgage differs primarily in the required condo fee at the downtown condo (the property taxes vary as well, but not significantly).  The single-family home is in a neighborhood without a homeowners’ association, so there are no monthly dues in this example.

One area that buyers tend to ignore is utility costs.  When you consider square footage here, it seems obvious that electricity would cost less in the condo.  More than that, though, condos are usually insulated by their adjacency to other units, thereby helping keep heating and cooling costs lower than a home with four or more walls exposed to the elements.  One caveat in this example: I contacted Austin Energy for history of energy consumption in these two homes, but was denied.  Therefore, I had to establish averages based on internet research and assumptions about my own past electricity usage.  I believe that if real-world data were available for these properties the disparity between utility costs would be even greater than what I’ve shown below:

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Another major difference between the condo and single-family home is in predicted transportation costs.  For the condo example (left column) I assumed both people could commute without owning a car.  They would get around reasonably by walking, public transportation, Austin’s new bike share program, and occasional use of Car2Go.  In the suburban example (right column) I used Edmunds’ True Cost to Own to estimate expenses for two vehicles—a new 2013 Toyota Prius and a paid-off 2009 Toyota RAV4 in its fifth year of ownership:

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Maintenance is another factor influencing the overall cost of owning a condominium versus owning a single-family house.  As you’ll see in the chart below, certain responsibilities and their associated expenses fall on the condo association (left column), whereas suburban homeowners take on those costs directly (right column):

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Because the condominium property includes a well-equipped fitness center and 24-hour concierge, we can assume that the couple would not need gym memberships or a separate wired home security system, as might be typical expenses for a suburban homeowner:

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There are also other conveniences that come with living centrally versus living out in a suburban neighborhood.  Note that the nearest LStar Rail Station is a planned stop; the system has yet to be built:

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So what’s the grand total?

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In this hypothetical example it will cost the couple an average of 53 percent more to live in the single-family home than they’d pay for the downtown condo, even when their home values are equal.  Just imagine what you could do with an extra $1724 a month!

Another Reason Texans Don’t Vote for Rail

Anyone who has been following the news regarding rail transit planning in Texas probably knows that Austin and San Antonio are each inching toward the most hotly debated systems in the country.  A quick look through the commentaries on either Austin’s comprehensive transportation planning process—known as Project Connect—or the Alamo city’s VIA Streetcar system is enough to raise anyone’s blood pressure.  Having grown up in a mature transit city, I often scratch my head at why many Texans are so opposed to investing in rail transit.  As an outsider to the bitter fight, though, I began to realize something about Texas cities that makes growing rail systems here a problem: they’re huge.

San Antonio’s land area is a broad 461 square miles.  To put that in perspective, Washington, DC’s land area is just over 61 square miles—more than 7 times smaller.  Boston is even smaller, at 48 square miles.  And Miami would fit inside San Antonio nearly 13 times!

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So what?  We all know that everything’s bigger in Texas, but what does that have to do with transit?

In a word: voting.

San Antonio residents voted down a sales tax increase in 2000, which would have helped create a light rail line.  But now, the city’s transit authority is pursuing a streetcar spanning 5.9 miles of its downtown and Lower Broadway neighborhoods.  So why is VIA pushing forward with the streetcar after its citizens said nay to a similar proposal a decade ago?  The short answer is that the majority of voters are too far away to feel invested in a project many feel they’ll never use. 

With the exception of the portion that crosses I-35 to reach the Westside Multimodal Center, the entire streetcar project falls within City Council District 1, an area that houses just 8 percent of the city’s residents (and had fewer residents in 2010 than in 2000).  It should be no surprise to anyone who knows San Antonio that the city’s fastest growing voter districts (6, 8 and 9) are north and west of the core.  More than a third of the city—including the city’s wealthiest residents—lives in these three districts.  Making matters worse, the city’s largest employer (USAA) is an 11-mile drive from the closest proposed streetcar stop.  The Toyota manufacturing plant is 12 miles away.

In contrast, roughly 57 percent of Washington, DC’s land area is located within a half mile of a MetroRail station.  I would presume an even greater share of the population can walk to a Metro station.  This doesn’t even account for the increased access residents will have to the 37-mile streetcar system being constructed there right now.   Add in Capital Bikeshare and almost no resident is out of reach to rail. 

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(the image above shows areas in Washington, DC within a half-mile radius of existing Metrorail stations)

I realize that people’s opposition to rail is more complex than simply their proximity (or lack thereof) to the system.  But at least by understanding the geography of the voting problem Texas cities face in implementing rail transit investments, it provides a greater opportunity to educate the public on how transit can be a win-win, even if they never see a farebox.  With a telescope.