Classic urban theory suggests that living in highly urbanized areas of the city results in social isolation, social disorganization, and psychological problems. Living in the suburbs, however, is thought to be much more conducive to happiness, because suburban areas have a lower population density, lower crime, and a more stable population when compared to urban areas. Using data collected in 1974 from the Detroit Metropolitan Area, this study evaluates this “happy suburbanite” hypothesis. Results show that people living in the suburbs are no more likely to express greater satisfaction with their neighborhood, greater satisfaction with the quality of their lives, or stronger feelings of self‐efficacy than people living in the city. The analyses reveal that social integration and perceptions of the neighborhood are associated with neighborhood satisfaction, whereas employment status, age, housing satisfaction, and neighborhood satisfaction are associated with good psychological health. The results also show that length of residence has the strongest effect on neighborhood social ties and participation in local activities. The implication of these findings for a social psychological theory of community life is discussed.