“Study: Shift to walkable urban places is good news for economy
Posted by Robert Steuteville on 10 Sep 2012
In the first regional, comprehensive study of mixed-use urban centers, Christopher Leinberger coins a clever term, WalkUPs (walkable, urban places). Leinberger examines 43 WalkUPs in the Washington, DC, region, most of which have been created in the last two decades.
Although they only occupy 1-2 percent of the DC land area, they account for 29 percent of the income-producing property and they generate tax revenues far out of proportion to the land they consume. Since 1990, WalkUPs have steadily gained a larger share of commercial development in the region, and Leinberger, research professor of urban real estate at the George Washington University School of Business, argues DC is a model for how the nation will develop in the coming decades.
"This shift is extremely good news for the beleaguered real estate industry and the economy as a whole," he says. "It will put a foundation under the economy as well as government tax revenues, much like drivable sub-urban development benefited the economy and selected jurisdictions in the second half of the 20th century." Better! Cities & Towns will feature a more extensive report on The WalkUP Wake-Up Call in the coming October-November issue. Here are some highlights from the report:
• There’s a pent-up demand for WalkUPs. “Up until the 1980s, drivable suburban office space commanded a premium rent over WalkUPs, but this position has reversed. There is currently a 75 percent premium for WalkUP office rent, giving such places a market advantage.”
• The shift toward WalkUPs has refocused development toward the center. The vast majority are in the city core and first-ring suburbs.
• Walkable urban development used to be a niche market, Leinberger says. “Today and in the future, it will be considered the market.” One reason is overbuilding of sprawl in the last five or six decades. Another is the highly educated, creative workforce that is increasingly made up of 1- and 2-person households. DC is ahead of the nation in education level, but other metro areas are heading in the same direction. This workforce prefers WalkUPs, he says, and metro areas without them will be left behind.
• The new real estate paradigm is no longer city versus suburbia, it is walkable versus drivable (drivable only — walkable places are also drivable, but not the reverse). Many of the new WalkUPs are in the suburbs, including suburban town centers like Rockville and Silver Spring that have been revitalized, and commercial strip corridors that are being redeveloped.
• Three factors explain the increased economic performance of WalkUPs: greater walkability, job density, and higher workforce education.
• Land values are much higher in WalkUPs, which impacts housing costs. Residents compensate by renting and occupying smaller spaces.
• Transportation costs are low in WalkUPs. Looking at housing and transportation costs combined, WalkUPs are relatively affordable, even in DC. About 78 percent of WalkUPs have housing and transportation costs below 45 percent of the area median income, and below the regional average.
• Racial diversity is much higher in WalkUPs, with more than three-quarters having a diversity index higher than the region as a whole.”
Via: Better! Cities & Towns