We model morning traffic congestion at the entrance to a central business district of an open monocentric city with endogenous location choice. Cobb-Douglas utility maximizing homogenous drivers decide endogenously on the location and size of their houses, and on departure time to the workplace, so that both spatial and dynamic equilibria are fulfilled. Importantly, we assume that a marginal utility of being at home depends on the size of the house. This assumption means that the larger the house is, the larger an opportunity cost of being too early at workplace is. Thus, a driver with a larger house, ceteris paribus, prefers to come to work later. And vice verse – the later the departure time is, the greater the incentive to have a larger house. We show that introduction of the first-best time-varying road pricing, as well as an increase of capacity of the bottleneck, increases the size of the city.