Walkable is Profitable
In the future, 80% of commercial development will target 10% of the land. (It'll be the most intense game of musical chairs ever.) For our special report, Bisnow dove into some of the top walkable markets where real estate is being transformed.
That stat comes from Chris Leinberger, director of the George Washington University Center for Real Estate and Urban Analysis (left, whom we snapped with Wulfe & Co’s Ed Wulfe and Central Houston prez Bob Eury). He says offices in WalkUPs—regionally significant walkable urban places—command 74% more rent than the US market as a whole and lease 20% faster. (Is it possible the people walking are just sweaty and are renting for the shower?) Chris is also prez of LOCUS, a national network of real estate developers and investors advocating for sustainable, walkable urban development.
Here are the top five walkable cities, according to Walk Score, which ranks areas to assist folks choosing where to live. (Miami comes in first in terms of Running-on-the-Beachability.)
The GWU School of Business and LOCUS took rankings a step farther in their Foot Traffic Ahead report, rating cities based on their WalkUPS (again, walkable urban places) and the share of office and retail space located throughout those areas through Q1 '14. It found Washington, DC, as the most walkable urban area, followed by New York, Boston, San Francisco, and Chicago. Why DC ranked higher than NYC: It has the most balanced distribution of WalkUPs (51% urban, 49% surburban), while New York's walkability is mainly centered around NYC proper, particularly Manhattan, which only accounts for 8% of the region's 22 million residents and only 0.3% of its land area.
Walkable and Livable Communities Institute co-founder Dan Burden lays out the benefits of communities that are safe and easy to walk. First, cars cost money: as much as 60% for a low-income earner, and that’s money that person could be spending on housing and healthcare. Both Millennials and retirees are demanding walkability, too, and he tells us people’s social lives are more active in walkable areas. (You don't see a lot of walks of shame through rural areas.)
Dan, who sits on the advisory board of Walk Score, says it finds that for every point higher on a home's score (determined by proximity to parks, schools, civic centers, and jobs), real estate value rises $500 to $3,000. And the higher an area’s walkability score, the less impact from recessions. After Dan did a walkability audit for La Jolla Boulevard of La Jolla, Calif.’s Bird Rock area, the community got rid of three excess lanes then created a median—effectively reducing cars’ speed from 40 mph to 20 mph and enabling the community to remove all traffic signals. People actually get home sooner, and the commercial district is blossoming, he tells us; for every 5 mph reduction in speed, retail sales and rents go up, in many cases as much as 30%.