I grew up in a suburb of Atlanta. For years, my parents would drive almost 50 miles a day commuting to and from work. The value proposition of living in a suburb seemed to make sense for a lot of people. Back then you could get a lot more space for a fraction of the cost (real estate in the suburbs has gotten a LOT more expensive since then, especially in the last year).

I’ve always wondered though, was the drive worth it?

A personal finance blogger, Mr. Money Mustache (great blog name), wrote a pretty cool post back in 2011 detailing the actual cost of commuting both in terms of the monetary drain from your car (vehicles are really expensive) to the time you spend in your car. I’ll give you the spark notes…it’s not worth it…or at least it definitely wasn’t.

The work from home model that we have lived through (tolerated reluctantly) this past year is at least partially here to stay. Regardless of how you feel about it, many companies are likely to try out some hybrid work from home models going forward that give individuals the flexibility to work from home some days of the week. This should help meaningfully lower car ownership and childcare costs (and could have tons of spillover effects – be great for the environment, lower congestion on highways, etc.).

As a result, suburban real estate demand has gone through the roof as people look for more space in their home and access to the outdoor activities they want to do (a tennis court in my neighborhood would be great). Check out this article from the economist on housing prices in suburbs.

I wanted to understand how much more bearable a hybrid work from home set-up would make living far from your work.

First let’s look at the costs without a hybrid work from home set-up

Based on the IRS’s cost of driving estimates ($0.56 / mile – including things like fuel, depreciation, insurance, etc.) I came up with a hypothetical cost of a commute (leveraging Mr. Money Mustache’s model – gotta give credit where credit is due).

For someone driving 25 miles each way to work for 10 years, depending on the age of their car, it would cost them ~$66K over those 10 years (not including the value of reinvesting that money over time). To put that into context, the median household net worth of a 35-44 year old (CNBC) is ~$91K (that’s for the total household). So that is over 2/3rds of the median households net worth (just for the cost of one person driving). If you factor in 2 working people, that is ~$130K in costs over those 10 years.

Even more astoundingly it would take up ~1.6 years (of working time) per person. Think about adding an additional 16% of time lost to your job because of your commute.

You can see how the time lost scales with how far your commute to work is, costing you nearly 3-years in working time at a 50-mile commute:

How much does a hybrid work from home model help?

A hybrid work from home model would reduce this impact. 2 days a week working from home would reduce this impact by 40% (this model scales linearly). That being said, if living in the suburbs is the difference between owning a car or not, there are a good number of fixed costs (e.g., depreciation, insurance, etc.) that are associated with car ownership that don’t necessarily decline with your reduction in travel. The biggest thing you save is your time.

Not to mention ~$40K / person in cost over 10 years and an additional 10% of working time is quite a bit, especially since the cost of living has risen faster in suburbs than in cities. Remember, these costs directly impact your savings, and time is not something you can get back. You could have spent that 10% of time with your family, starting a new side hustle, watching Netflix…whatever makes you happy.

So where do I land with all of this?

While I think a hybrid work from home set-up and more efficient cars can reduce the direct financial impact after you net out all the puts and takes, I think the value of your time is still way too high to justify living far away from your work and the massive hike in suburban real estate prices has likely eroded much of the benefit of moving farther out of the city. The trick will be finding affordable real estate that is along public transit lines or is close enough that you can walk / bike to work.

You can always go to a public park if you want outdoor space.

If I do move out to the suburbs one day, it’ll be because I’ve moved to working completely online (I am enough of an extrovert that I doubt this will happen) or my place of work is outside the city.

Let me know your thoughts on the suburbia craze.

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