Walking to Prosperity: New Study Demonstrates Growing Value of Walkable Places
Noted real estate researcher, writer, and developer Christopher Leinberger has co-authored a new Brookings Institution study clearly measuring the significant value of walkability in commercial and residential real estate.
The study’s conclusions are clear: walkability is more than just an amenity: it’s a significant contributor to the value of homes and businesses, and its contribution is growing.
“Until the 1990s, exclusive suburban homes that were accessible only by car cost more, per square foot, than other kinds of American housing,” Leinberger writes in a New York Times piece describing the report’s findings. “Now, however, these suburbs have become overbuilt, and housing values have fallen. Today, the most valuable real estate lies in walkable urban locations.”
In the report, Leinberger and co-author Mariela Alfonzo highlight a five-step ladder of walkability in the Washington, DC metro area, in which each “step” up the ladder “adds $9 per square foot to office rents, $7 per square foot to retail rents, more than $300 per month to apartment rents and nearly $82 per square foot to home values.”
Further evidence shared in Leinberger’s New York Times piece demonstrates that this boost in value appears common to many other metro areas, as the chart below demonstrates. And as Leinberger noted when he spoke to our McCall Society Speaker Series in February 2012, walkability can be found all over a metro region; in fact, some of the DC metro’s most walkable areas are in suburban towns like Reston and Ballston, Virginia, and Silver Spring, Maryland.
Leinberger argues that the high demand for walkable neighborhoods, on the part of everyone from boomers to young families to college students, still outpaces demand in many metro areas. According to one study, walkable housing units are under-supplied by as much as 25 million units nationwide. Naturally, this is causing an affordability problem for many.
Meanwhile, falling demand for auto-dependent neighborhoods is creating an inverse problem for homeowners there: average home values are falling in these neighborhoods, and they have suffered more throughout the recession. According to the same study cited above, large-lot housing is now over supplied by roughly 28 million units nationwide. These neighborhoods are now characterized by poorer, less educated populations than ever before, and their local commercial economies suffer as well.
How do we address the affordability problem? “It’s important that developers and their investors learn how to build places that integrate many different uses within walking distance,” Leinberger writes:
“Building walkable urban places is more complex and riskier than following decades-long patterns of suburban construction. But the market gets what it wants, and the market signals are flashing pretty brightly: build more walkable, and bikable, places.”
Oregon communities should take close note of what current trends in housing are indicating, and ensure that their plans are reflecting what consumers want today. Walkable neighborhoods aren’t limited to large cities like Portland or Eugene, but are possible in suburban centers and small towns throughout the state.
As talented workers, young families, and retirees look for places to live in the coming years, the communities with more walkable places to live and work will find themselves at an advantage. Smart land use planning will help more communities meet the demand, improve local economies, and prevent unnecessary sprawl. 1000 Friends works for these outcomes across the state. Learn more at friends.org/LandUseIs.
>>Download the full Brookings Institution report, entitled Walk This Way: The Economic Prosperity of Walkable Places in Metropolitan Washington, D.C.