Thursday, October 8, 2015

The Economics of Walkability

By Stephanie Allen, Project Assistant

In the past decade, urban planners have touted neighborhood walkability as a tool to promote public health and smart growth goals and to reduce carbon-intensive travel. In the last couple of years, economic developers have taken notice in a big way. Walkability has become key to economic competitiveness. 

Many recent polls and studies suggest that millennials prefer walkable communities: 

  • The 2015 National Community and Transportation Preference Survey found that millennials prefer walking as a mode of transportation. More than eighty percent of millennials said it was important for their city to offer opportunities to live and work without a car. And, nearly half of those who own a car said they would consider giving it up if they could rely on other modes of transportation (including walking). 

As a millennial, I have to say I prefer a walkable community too. I live in Los Angeles so I’m not considering giving up my car any time soon, but when my partner and I bought a house last year we bought in a neighborhood where we could walk to Trader Joe’s (and we always do), the local hardware store, the post office, a health food store, a weekly farmer’s market, coffee shops, restaurants, a great neighborhood bar, the public library, the meditation center, yoga, schools, etc. Walkability was a HUGE factor in our decision. I wouldn’t even consider looking at houses that weren’t within walking distance to at least a grocery store and in the end we bought a smaller house in order to be in the walkable neighborhood. 

And, it’s not just millennials: 

  • The American Planning Association polled millennials and baby boomers and found that both groups want many of the same things, including walkable communities that will allow aging in place. Over seventy-five percent noted the importance of affordable and convenient transportation options in deciding where to live. Sixty-eight percent said the path to prosperity lies in building up local communities by concentrating on creating desirable places to live (as opposed to recruiting companies). 
  • An AARP survey found that sixty percent of boomers over fifty want to live within one mile of daily goods and services. 
  • Start-ups and other tech players are also favoring walkability. According to Richard Florida, the majority of venture capital is going to city centers and walkable suburbs. 

Talent and start-ups are sort of the holy grail of economic development. We think that if you can attract those two things, you are well on your way to economic prosperity. It stands to reason then, that walkability will positively affect economic prosperity. 

A handful of data backs this up: 

  • This study, published in the Journal of Planning Education and Research earlier this year, found that an increase in neighborhood walkability corresponded to an increase in the property values of single-family homes within the neighborhood. 
  • This study, published in Real Estate Economics in 2011, found that a 10 point increase in Walk Score corresponded to a five to eight percent increase in commercial real estate property values. 
  • This study, commissioned by the American Public Transportation Association, found a premium of more than forty percent for property values within walking distance of a transit station. 
  • This study, from The Brookings Institute, suggests that walkability positively impacts price resilience in residential neighborhoods. 
  • This analysis, based on a Moody’s and Real Capital Analytics’ dataset, shows that since the recession commercial real estate prices have risen most sharply in highly walkable central business districts, followed by walkable suburbs, while car-dependent suburbs are still struggling to get back to peak prices. 

Economic developers have promoted walkability because it contributes to quality of place and quality of place matters for attracting talent as well as start-ups (who are also concerned with attracting talent). This data suggests that walkability also contributes more directly to economic prosperity by boosting real estate prices and tax revenues.