An economic analysis of a sample of neighborhoods in the Washington, D.C. metropolitan area using walkability measures finds that:
- More walkable places perform better economically. For neighborhoods within metropolitan Washington, as the number of environmental features that facilitate walkability and attract pedestrians increase, so do office, residential, and retail rents, retail revenues, and for-sale residential values.
- Walkable places benefit from being near other walkable places. On average, walkable neighborhoods in metropolitan Washington that cluster and form walkable districts exhibit higher rents and home values than stand-alone walkable places.
- Residents of more walkable places have lower transportation costs and higher transit access, but also higher housing costs. Residents of more walkable neighborhoods in metropolitan Washington generally spend around 12 percent of their income on transportation and 30 percent on housing. In comparison, residents of places with fewer environmental features that encourage walkability spend around 15 percent on transportation and 18 percent on housing.
- Residents of places with poor walkability are generally less affluent and have lower educational attainment than places with good walkability. Places with more walkability features have also become more gentrified over the past decade. However, there is no significant difference in terms of transit access to jobs between poor and good walkable places.
The findings of this study offer useful insights for a diverse set of
interests. Lenders, for example, should find cause to integrate
walkability into their underwriting standards. Developers and investors
should consider walkability when assessing prospects for the region and
acquiring property. Local and regional planning agencies should
incorporate assessments of walkability into their strategic economic
development plans and eliminate barriers to walkable development.
Finally, private foundations and government agencies that provide
funding to further sustainability practices should consider walkability
(especially as it relates to social equity) when allocating funds and
incorporate such measures into their accountability standards.
The Great Recession highlighted the need to change the prevailing
real estate development paradigm, particularly in housing. High-risk
financial products and practices, “teaser” underwriting terms, steadily
low-interest rates, and speculation in housing were some of the most
significant contributors to the housing bubble and burst that catalyzed
the recession. But an oversupply of residential housing also fueled the
economic crisis.
However, a closer look at the post-recession housing numbers paints a
more nuanced picture. While U.S. home values dropped steadily between
2008 and 2011, distant suburbs experienced the starkest price decreases
while more close-in neighborhoods either held steady or in some cases
saw price increases. This distinction in housing proximity is
particularly important since it appears that the United States may be at
the beginning of a structural real estate market shift. Emerging
evidence points to a preference for mixed-use, compact, amenity-rich,
transit-accessible neighborhoods or walkable places.
...
Based on [the] sample of places within metropolitan Washington, a neighborhood’s walkability score relates positively to several key economic indicators.36 Higher walkability, as measured by a place’s IMI score, is related to higher economic performance, controlling for a place’s household income. Specifically, considering the magnitude of influence that walkability has on economic performance, a one-level (or approximately 20 pt) increase in walkability (out of a range of 94 points) translates into a $8.88 value premium in office rents, a $6.92 premium in retail rents, an 80 percent increase in retail sales, a $301.76/square foot premium in residential rents, and a $81.54/square foot premium in residential housing values.
The full report is available free of charge at http://www.brookings.edu/research/papers/2012/05/25-walkable-places-leinberger.
Brookings www.brookings.edu
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