Walkability was a major topic of discussion at the 2014 NMHC Research Forum, as demand for dense urban, transit-oriented and suburban town center development has grown. Academic Chris Leinberger, senior fellow at the Brookings Institution and research professor at George Washington University School of Business, shared insights on the walkable urban future of U.S. cities.
According to research, the built environment-for-sale housing, multifamily and commercial properties, civic properties and infrastructure-makes up 35 percent of U.S. assets. Since the 1960s, the automobile industry and culture drove-no pun intended-where that built environment manifested, largely the suburbs and then exurbs. However, certain demographic and economic factors are swinging the pendulum back the other way toward walkable urban development.
Millennials and their strong desire for walkable urban areas is one major influencing factor. However, there are others. Beginning in 2012, droves of baby boomers have started becoming empty nesters and retirees. Moreover, fewer households are having children; whereas in 1950, 50 percent of households had children, today just 25 percent do, leaving three-quarters of households without kids needing backyards and cul-de-sacs. And it’s projected that only 14 percent of new households over the next 20 years will have children.
Another influencing factor is that expenses related to owning, operating and maintaining cars has increased. The average household spends 19 percent of their housing and disposable income on transportation; for households in drivable suburban locations, that percentage rises to 25 percent while for those in walkable urban locations, it drops to 9 percent.
However, the shift from a more manufacturing-based economy to a knowledge economy also has resulted in households travelling fewer miles. In fact, vehicle miles traveled trends showed a slow decline of 6 percent from a 2004 peak. More noteworthy is that the miles traveled by young people (16- to 34-year-olds) peaked earlier (2001) and has since dropped 23 percent.
The confluence of these factors is driving demand for what Leinberger called WalkUps, walkable urban places. (Walkable he defined as about a quarter mile radius.) He pointed to the Washington, D.C., metro area as one region with significant WalkUPs; beyond downtown neighborhood development, areas such as Arlington, Bethesda, Reston and Silver Spring provide strong examples of WalkUPs within a suburban setting. But Leinberger said that this preference for walkable urban was starting to manifest in traditionally sprawl-friendly metros like Atlanta and even Orlando and Houston to some degree.
Beyond consumer preference for this type of development, Leinberger also argued that there’s a good business case for WalkUP development. Compared with drivable suburban development, there’s a significant rent per square foot premium for walkable urban places-across all asset classes. For rental housing, that perk translates to about 12 percent higher rent per square foot; in contrast, for retail, that premium is 144 percent. Higher rents support higher property values and more tax revenue for local jurisdictions.
Given these trends, Leinberger concluded that local jurisdictions would be wise to plan for and promote walkable urban development. Research shows that areas with a Walk Score above 70 can increase their economic performance by more than 65 percent. Coupled with job density and workforce education opportunities, jurisdictions can exhibit nearly 90 percent jumps in economic performance.
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