Urban Housing vs Suburbia Housing: Economics of Affordability & Efficiency.

Affordable housing within cities is scarce, pushing many people to the suburbs or city outskirts. However, this often means settling for what’s affordable at the expense of quality of life. This trend has driven rapid urban expansion into neighbouring towns and even encroachment on land reserved for future development.

Yet, suburban sprawl doesn’t necessarily equal affordability. Housing only becomes affordable when it’s made accessible, particularly in urban centres. This challenge lies at the heart of the long-standing “city vs suburb” debate in city planning.

Both sides of the argument present valid points:

• Urban density: Increasing urban housing supply risks inflating land prices and straining already insufficient infrastructure.
• Suburban sprawl: Expanding outward offers cheaper housing options but comes with long-term costs—environmental, infrastructural, and social.

The real question isn’t which side is better, but whether a balance can be struck. Let’s explore the economics of these two models and consider how PetitHaus might build 1,000 homes in a way that maximizes affordability and efficiency.

To get into it, first of all…

1.1 What goes into housing?

You can read the detailed post on What Goes Into Building a Home here. but for this post, we'll limit what the decision to own a home hinges on two overarching factors: location and costs of ownership.

      1.1 Location

Location is the foundation of every housing decision. It affects sustainability, quality of life, and long-term value. Key considerations include:

• Goals: Is the home for personal use or investment?
• Value: Lifestyle quality, convenience, resale value, and neighbourhood character.
• Costs: Upfront property costs and lifetime operational expenses.
• Planning Regulations: Zoning and legal limits on development.

      1.2 Costs of Ownership

Regardless of the ownership path—mortgage, outright purchase, or self-building—housing costs include:

• Land costs: The purchase price of the land.
• Documentation: Legal titles, permits, and approvals.
• Construction costs: Building materials and professional fees.

Understanding these dynamics is crucial for comparing urban and suburban housing models. But before getting into how we'll achieve housing for 1000 families, let's understand the issues around the city vs suburb debate.

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2. Opportunity Cost: Location vs Cost of Ownership

Cities and suburbs each face unique challenges in housing development:

• Cities: Rising migration, land scarcity, and soaring costs strain infrastructure and drive inequality. Some believe that a horizontal push —allowing housing developments to spread outwards to the suburbs (outskirts) which would lead to faster city expansion and possibly growth, is the answer.

The opposing view (that believes it's in doing more with scarce land, by keeping it compact and vertical at the centre), is, that if we stack the homes, they'd become more affordable. Mathematically, this would make sense, but in reality, this assumption could not be far from misleading. The complexity of going higher means spending more, making the idea of “affordable” rather impossible and exclusive to a limited few.

• Suburbs: Sprawling developments consume land, exacerbate car dependency, and often lack infrastructure.

Take Lagos, for example. Suburbs are growing rapidly as developers race to build “affordable” housing, but these homes often remain out of reach for many. At the same time, the idea of vertical urban development appears promising but is fraught with high construction costs, limiting affordability.

For policymakers, Thus, for city planners and policymakers—who grapple with the constant rise in population to keep the city from decay so that existing and future infrastructure are not overwhelmed, the challenge isn’t choosing between cities and suburbs but finding ways to integrate both sustainably. It’s about exploring smarter, more sustainable ways to grow without losing affordability or efficiency. This requires balancing present and future needs, modernity and culture, density and sprawl, and innovation with economic efficiency.

Let’s explore the peculiarities and challenges of urban and suburban environments. 

      2.1. A Compact City: Costs of Opportunity

While suburbs have seen a surge in popularity, cities remain centres of opportunity, creativity, and culture. Major ‘metropolitan’ areas like Lagos, Abuja, and Port Harcourt boast unparalleled diversity and economic energy, making them hubs for industries and innovation.

Cities offer unique advantages through the theory of agglomeration, where proximity to others in the same field boosts productivity, creativity, and opportunities. From tech to finance, being physically close to collaborators and competitors drives success. This is why even companies like banks and pharmaceuticals, despite enabling remote work, continue to invest in prime urban real estate (as offices or factories), some even invest in housing development.

However, urban living comes at a steep price. The cost of housing (primarily influenced by the cost of land, costs of construction and a few other factors) in cities like Lagos has skyrocketed, with two-bedroom apartments averaging nearly N45,000,000. Grocery prices and other living costs further strain even the most prudent city dwellers. This accounts for why city dwellers are ‘forced’ to explore the suburbs.

      2.2. Spread-Out Suburbs: The Alternatives Foregone

Suburban living appeals to those seeking calmness, affordability, and respite from the city’s fast-paced lifestyle. And the recent growth in suburban areas, which had been strongly influenced by skyrocketing property prices in city cores and major city expansion projects. 

However, suburban growth comes with significant trade-offs. The most affordable suburbs have relied on spread-out ‘cheap’, untouched farmland. Every day, vast plots of land are cleared to make way for new housing developments. While these developments offer fresh opportunities, they often pull residents away from the thrills and benefits of the urban lifestyle. 

Although this is positive for city expansion, it happens in the same monotonous way: rows of large single-family homes with driveways and yards, often lacking supporting infrastructure like roads, community interaction, waste management, power and water.

This approach keeps housing costs low but has impacts on land use. Because land seems to be more affordable, people tend to take more than they need. This indiscriminate horizontal spread (sprawling) is the reason for the blown-up expansion of the suburbs that sometimes encroach into rural areas or adjoining towns making the residents car-dependent. 

A large proportion of suburban residents rely on personal vehicles (the largest source of urban emissions), for daily commutes to/from the city core for work. Resulting in long traffic, which is exacerbated by poor road networks has an even more expensive toll on quality of life as residents spend long productive hours in daily commutes.

      2.3. If Sprawl Enables Affordability, Why’s It An Issue?

While suburban sprawl seems to offer affordability, it is economically deceptive…for IGR reasons and comes at a high long-term cost:

• Land inefficiency: Excessive land use consumes farmland and natural habitats.
• Infrastructural strain: Apart from the high churn on land, suburbs require costly utilities and road networks that often outstrip tax revenues. New homes require roads, water systems, and sewer lines, but the revenue generated by these homes often doesn’t cover the infrastructure's long-term maintenance.
• Car dependency: Long commutes harm productivity and increase emissions.

By contrast, urban areas generate more tax revenue per square foot due to their density and mixed land use. But we must address the following:

• Density challenges: High land costs and construction complexity make affordability elusive.
• Equity issues: Limited access to affordable housing worsens inequality.

Conversely, rural areas are less costly because they rely on fewer public services. The problem lies squarely in the middle: The suburban sprawl, and it demands that we find a better way to build.

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3.0 A Better Way to Build: 

Exploring smarter, more sustainable ways to grow without losing affordability or efficiency.

The good news is that we can design suburbs differently—balancing growth with affordability, efficiency, and preservation. By increasing density without compromising suburban charm, we can house more people on less land while maintaining financial sustainability. Here’s an illustration of how this approach works. Imagine we’re tasked with housing 1,000 families with an average household size of 5 people.

      3.1. Scenario: Building Homes for 1,000 People

A. The Traditional Approach

Following the conventional model, we'd propose to build large, single-family homes on sprawling lots. This would mean constructing 1000 units of 600sq.m plots of land, an alarming 600,000sq.m (148 Acres or 60 hectares) This type of layout, excluding supporting facilities, would quickly consume available land, leaving no room for essential amenities like parks, schools, or shops.

To accommodate these additional services, we’d need to clear additional land, increasing costs for infrastructure and maintenance. Traffic would rise as residents rely on cars to access distant amenities. This pattern repeats endlessly, consuming more land and straining development budgets.

For amusement purposes only, assuming that construction costs remain uniform, 600,000sq.m at a ‘dash price’ of N25,000 per sq.m (in an averagely ‘prime’ Lagos suburb) = N15 billion, for land only. 

Let's say for modesty, if we decide on a half plot for each family, that would require 300,000sq.m (74 Acres or 30 hectares) which would cost N7.5 billion for land in the same location.

B. The Smarter Alternative

 Instead of sprawling across large lots, let’s rethink the layout:

• Mixed Housing Types: Incorporating mixed-income, low-to-medium-rise housing prototypes that range from single-family homes, to duplexes, townhouses, apartments, and cottage courts.
• Compact Design: Reduce lot sizes, with garages behind homes accessed via alleys, and smaller backyards balanced by shared green spaces.
• Central Amenities: Dedicate space for a mixed-use town centre with shops, restaurants, schools, and parks.
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By optimizing land use, we can house all 1,000 residents without purchasing extra land. For example: 

• Detached homes (30%): 300 units @ 150sq.m footprint = 45,000sq.m (11Acre/4.5Ha)
• Terraced townhouses (30%): 300 units @ 75sq.m footprint = 22,500sq.m (6Acre/2.25Ha)
• Apartments (40%):  400 units: 20 buildings (4 units per floor x 5 floors per building) @ 500sq.m per building =  10,000sq.m (2.5Acre/1Ha)
• Total footprint for buildings = 45,000 + 22,500 + 10,000 = 77,500sq.m
• Circulation (setbacks, airspaces roads and walkways): 100% of total building footprint = 77,500sq.m
• Communal facilities: 50% of total building footprint = 38,750sq.m
• TOTAL LAND REQUIRED (including support facilities) = 193,750sq.m (48Acre/19Ha)
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For amusement purposes only, assuming that construction costs remain uniform, 193,750sq.m at a ‘dash price’ of N25,000 per sq.m (in an averagely ‘prime’ Lagos suburb) = N4.8 billion. 

NOTE: This layout also includes walkable paths, bike lanes, and a community centre, making the neighbourhood functional and appealing.

The Impact of Better Design

• Land Conservation: Our second alternative, the more efficient design leaves surrounding land untouched, preserving natural habitats or farmland or other/future development uses.
• Cost Efficiency: With fewer roads and utility lines to maintain, planning budgets remain stable and IGR is commensurate to the investment.
• Community Benefits: Residents enjoy walkable neighbourhoods with access to nearby amenities, reducing dependence on cars and fostering a sense of community.
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      3.2. Bringing Back the Small-Town Feel

This isn't a new concept. Historically, communities balanced growth with sustainability through compact town centres surrounded by open land. Most cities are planned for suburbs with mixed-use hubs and surrounding green spaces. However, most developers and even homeowners have largely ignored this vision, prioritizing profit or initial affordability over long-term sustainability.

It’s time to revive and modernize these ideas. With thoughtful planning and diverse housing options, we can meet the needs of a growing population without sacrificing affordability or the environment.

Here's more on how we Design City Neighbourhoods Like Villages.

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4. Balancing the Scales: Toward Sustainable Communities

Optimizing city suburbs isn’t just about housing—it’s about creating thriving, sustainable communities that work for everyone. It’s time to start building smarter. The choices made today in city-centre and suburban development will shape local (state's and national) economy and environment for decades. To strike a balance:

• Suburbs must embrace sustainability: Investments in public transit, walkable neighbourhoods, and zoning reforms are essential to reducing carbon emissions and improving quality of life.
• Cities must become more equitable: Addressing affordability and inequality can make urban living accessible to a broader range of residents, ensuring cities remain vibrant and diverse.
• Policymakers must act boldly: Strategic investments in infrastructure, housing, and transit are necessary to create resilient communities that thrive in the face of climate change and economic shifts.
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Ultimately, whether in a bustling urban core or a serene suburban enclave, the future of living lies in creating inclusive, sustainable environments that balance economic opportunity with environmental responsibility. A strong purpose behind PetitHaus' mission.

We believe that cities and suburbs each offer unique advantages and challenges, and the decision of where to live will always reflect individual priorities. But with thoughtful planning and innovative solutions, we can ensure that both spaces contribute to a thriving and sustainable future.

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