Patrick SissonJun 24, 2019, 4:51pm EDT
What if I told you there was a way to develop U.S. cities that was better for social equity, created more jobs and economic activity, resulted in better transit access, and improved the environment, all while guaranteeing better economic returns for developers and investors?
According to “Foot Traffic Ahead,” a new report that provides an in-depth look at the impact of walkable urbanism on U.S. real estate, that method exists. On nearly every metric, walkable developments perform better for their citizens, especially economically, which makes it that much more disappointing that so many established policy decisions fly in the face of this data.
A joint project between The Center for Real Estate and Urban Analysis (CREUA) at the George Washington University School of Business, Smart Growth America/LOCUS, Cushman & Wakefield, and Yardi Matrix, the report found substantial growth in such areas—defined via a formula that looks at office and retail density as well as Walk Score—as well as substantial value increases and increased educational attainment and economic vitality.
Researchers examined real estate development and performance in the nation’s 30 largest metros, which contain 150 million people, or 47 percent of the total U.S. population
The bottom line? Walkable urban places, what the report calls WalkUPs, demand roughly 75 percent higher rent over the metro average, a gap that’s increasing, having grown 19 percent since 2010 alone (the report believed that growth will only continue). That includes 105 percent higher rent for office space and 121 percent higher rent for retail.
This may all seem obvious; space in dense superstar cities costs more than land in spread-out exurbs. But researchers found this type of development is becoming the preferred and prevalent model across nearly all categories.
It’s not a trend confined to coastal cities; it’s on the rise in the Rust Belt, the Sun Belt, tech metropolises, government centers, innovation centers, and millennial magnets. According to “Foot Traffic Ahead,” 72 percent of office and rental multifamily absorption between 2010 and 2018 could be categorized as walkable urban development.
In Dallas, a poster child for sprawl, the 38 WalkUPs comprise 0.10 percent of metro land area, but 12 percent of metro GDP. Between 2010 and 2017, net absorption of WalkUPs was 2.6 times the metro average, meaning drivable suburban development actually lost market share. This suggests that those who aren’t developing in this way, or haven’t updated municipal policy to encourage such development, may miss out on investment opportunities, thus widening existing economic gaps.
Why so much of the country is still sprawlWhy do WalkUps—which, as the report notes, “punch far above their weight economically,” offer improved transit options, and create the kind of density that can cut down carbon emissions and make cities infinitely more sustainable—only make up less than 1 percent of the land mass in the top 30 U.S. metros (0.17 percent to be exact)? Why do we fail to plan for, and build more, of these neighborhoods?
Perhaps its because we invented, and then exported, the opposite development pattern. “Drivable sub-urban development,” the report’s more scientific definition of sprawl—historically low density, segregated building types, standardized development, and car-centric transit infrastructure—was a U.S. creation that has inhibited development patterns in cities and suburbs alike for the last century. While it’s hard to break a habit, “Foot Traffic Ahead” has harsh words for cities (and states, such as California) that aren’t adapting to the market demand for walkable urbanism.
“These low-ranking metros have also demonstrated an inability to change by continuing to promote drivable sub-urban development patterns in public policy and infrastructure investments, such as voting against transit investment or maintaining outdated zoning codes that mandate a certain type of development less preferred by today’s market,” the report notes. “These metros demonstrate that focusing on sprawling, drivable sub-urban development patterns reduce economic performance and social equity outcomes.”
These arguments formed the core of Minneapolis’s decision to upzone the entire city, a plan that backers said would help rectify decades of segregation and unequal opportunities while creating more housing, improving transit, and encouraging more economic development. What’s not to like?
“U.S. metros where the public and private sectors work together to adapt and deliver increased supply of walkable urban places will be the economic and social justice winners of the next generation,” the report notes.
Walkable urbanism, a pathway to dynamic growth
On nearly every level, the analysis shows the benefits of denser, human-scale development. High walkability often correlates to improved social mobility. Six of the top 10 cities, in terms of social equity rankings, are also the ones with the highest percentage of WalkUPs. While they also have the highest demand and most expensive housing—because density brings more affordable transit options and easier connection to more jobs—they partially offset higher costs of living. Of course, without concerted effort to densify housing and build it close to jobs, this advantage is quickly erased.
Other cities have also seen big developments boosts from prioritizing walkable urbanism. Atlanta, another post child for sprawl, has seen expansive development due to new projects near the Beltline, the expanding, city-wide pedestrian and bike corridor. Detroit and Pittsburgh, former industrials cities with reviving and emerging reputations as centers of design and technology, have seen walkable urban areas grown substantially.
The 2019 report found the top six cities for walkable urbanism, in descending order, include New York, Denver, Boston, Washington D.C., San Francisco, and Chicago. Denver may seem out of place for those not familiar with recent developments, but, since 2003, it has been “on a walkable urban infrastructure investment boom” due to the expansion of and investment in rail transit, which has sparked a “renaissance of walkable urbanism.”
Future development trends
As the report notes, it’s important to understand that old ways to define where we live, such as suburban versus downtown, aren’t always as useful in current economic discussions and debate. “We need categories driven by measures of urban form and economic activity,” including singling out, studying, and replicating walkable neighborhoods, which can be downtown or in the center of an exurban development, because they’re responsible for so much economic development and wealth creation.
The report suggests there’s a lot of room to grow: The population of the 30 largest metros could support an additional 472 WalkUPs, an increase of 62 percent. There’s large, unmet demand for affordable pedestrian and transit-accessible multifamily apartments in the suburbs, which the report pegs as a major equity challenge.
Sprawl has dominated development for at least the last 60 years, and only in this last cycle has there been a sustained shift back towards dense urban development. A better understanding of building such neighborhoods and developments, while keeping housing affordable and accessible, will be a deciding factor in how sustained this shift will be.
Why building walkable cities is the key to economic success – Curbed
Patrick SissonJun 24, 2019, 4:51pm EDT What if I told you there was a way to develop U.S. cities that was better for social equity, created more jobs and economic activity, resulted in better transit access, and improved the environment, all while guaranteeing better economic returns for developers and investors? According to “Foot Traffic Ahead,”… [Read More]