The subway system in Toronto is not as extensive as New York or London but it is good and most people take the bus to the subway and then transfer (which is free). Because most of the subway stations are not in very nice areas which explain why people live a km or 2 away. Anyway, there are stations with nice houses nearby like High Park and in general I would tell you to avoid Scarborough at all costs. Since your budget is $500-700, downtown is not an option for you. Also, you said you want to live within 30 mins of the city by which I'm guessing you mean downtown Toronto. Check out housing in Etobicoke and North York. You could also check out housing near Pape (15-20mins to downtown) where it's a bit cheaper and nightlife is a bit vibrant. But yeah don't go any eastward looking for housing. You will end up in Scarborough which is not as nice and also more than 30 mins by subway to downtown.
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