On Common Ground - Winter 2017: Walkable Neighborhoods

This analysis of the 30 largest metropolitan areas in the country found that walkable urban locations within each metro have outperformed sprawling suburban locations over the last five years in the office, retail and multi-family rental housing sectors.

In most cases, the gains in market share made by walkable urban development — using their relative percentage of occupied square footage as a yardstick — match the gains in market share made by non-walkable suburban development when it was dominant, but in reverse.

Walkable urban places aren’t just gaining market share. They command rent premiums of 66 percent higher for multi-family, 71 percent higher for retail and 90 percent higher for office properties, as compared to drivable suburban locations, according to “Foot Traffic Ahead.” They also correlate to higher GDP per capita and a more highly educated workforce as measured by the number of college graduates 25 and older.

Although “Foot Traffic Ahead” doesn’t address sales prices, a related study, “DC: The WalkUp Wake-Up Call,” found that homes in walkable urban neighborhoods in metropolitan Washington, D.C., sell for 70 percent more per square foot than those in car-dependent areas.

Sales prices for commercial properties are up 125 percent in central business districts and 43 percent in highly walkable suburban places versus just 21-22 percent for properties in places considered only somewhat walkable or car-dependent, according to nationwide findings from Real Capital Analytics and Walk Score.

It all points to a structural shift in metropolitan development patterns, according to “Foot Traffic Ahead” co-authors Christopher Leinberger and Michael Rodriguez, who label the current real estate cycle a “watershed moment” in a gradual, but definite shift to walkable urban development.

Walkable urban locations within each metro have outperformed
sprawling suburban locations over the last five years in the
office, retail and multi-family rental housing sectors.

“The paradox of transportation in
the late 20th Century is that while it
became possible to travel to the moon,
it also became impossible, in many
cases, to walk across the street.”