Commercial development centred around ‘walkable’ urban environments has been linked to higher office rents along with more prosperous urban economies and higher levels of education, according to a recent study in the United States.
Published by the George Washington University School of Business, the Foot Traffic Ahead study ranks America’s top 30 metropolitan areas based on the amount of commercial development which occurs in ‘walkable urban places’ (WalkUPs) – urban areas which are considered to be friendly to pedestrian commuters and are characterised by high density development, a mix of diverse real estate types, and good transport links and options such as rail, bus and bicycle.
Excluding New York, which skews the results due to its abnormally high premiums (206 per cent), the study found that WalkUP office rents deliver a 44 per cent price premium compared with their ‘driveable’ counterparts (low density developments connected primarily by car or truck), with the former attracting average rents of $US29.99 per square foot compared with $20.81 per square foot for the latter.
Walkable areas are also conducive to higher levels of gross domestic product and educational achievement: on a per person basis, gross domestic product in the six most walkable areas in the study was 38 per cent higher than the average GDP per capita.
The study acknowledges that the question surrounding whether or not walkable urbanism actually causes the higher rents or causes highly educated persons to move to such areas (58 per cent of which are located in central city areas which may attract higher rents and smarter people irrespective of their pedestrian friendliness or otherwise) cannot be answered for certain through its data. It does note, however, that notions regarding walkability attracting more educated people are supported by other research.
A recent study by independent research group Wisconsin PIRG, for example, found that more than 80 per cent of college students felt having transportation options other than driving was either somewhat or very important in where they chose to live.
In terms of where walkable areas lie, meanwhile, the report found that whilst the likes of Washington DC, New York City, Boston, the San Francisco Bay Area and Chicago ranked among the top current areas, other cities including Miami, Atlanta and Detroit are well positioned for future growth of walkable places given current efforts in those the communities.
Chris Leinberger, metropolitan land use strategist and author of the report, says the impact of walkability cannot be understated.
Leinberger says in the past, driveable suburban formulas have been reinforced by real estate finance, which he says has turned “what for thousands of years was a 40-year asset class into a product with a 7-10 year life.”
He feels there is pent-up market demand for walkable urban development as recent years have seen consumers seek alternative options to the ‘one size fits all’ drivable suburbanism, and is encouraging policy makers as well as the property industry to proactively respond to demand in terms of design, planning, regulation and finance.
“As economic engines, as talent attractors, and as highly productive real estate, these WalkUPs are a crucial component in building and sustaining a thriving urban economy,” Leinberger said. “Cities with more WalkUPs are positioned for success, now and in the future.”
Forest City Real Estate Services and Development President Emerick Corsi agrees.
“Creating new Walkable Urban Places is a goal that elected officials and developers alike can get behind,” he said. “Based on the trends in Foot Traffic Ahead, there is the potential for market demand for tens of millions more square feet of walkable urban development—and hundreds of new WalkUPs—in America’s cities.”
“Meeting that demand is an opportunity to create huge value for these communities.”