Walkable Urban Places Gaining Market Share
We may be starting to see a significant shift in the way that metro areas in large US cities are planned and developed, as a recent report found that walkable urban places (WalkUPs) have been gaining market share over the traditional ‘drivable suburban’ areas that have drawn much of the development over the last half-century or so.
According to the recently released Foot Traffic Ahead: 2016 report, from Smart Growth America, in the top 30 US metro areas, representing 46% of the nation’s population, there are 619 “regionally significant” walkable urban places, and these WalkUPs are not only growing in popularity and market share, but are also commanding premium rental rates.
The Foot Traffic Ahead: 2016 report, which comes out of research from the LOCUS coalition (consisting of real estate developers and investors “who advocate for sustainable, walkable urban development” in metro areas), found that these WalkUPs account for a “very small” portion of the total land in the metro areas (0.55% to 1.2%), yet attract a large percentage of the metro-areas’ office and multi-family rental square
The report ranks the top 30 metro areas on their current percentage of “occupied walkable urban office, retail, and multi-family rental square feet” within their WalkUPs, compared with the balance of the occupied square footage in those metro areas. The US metro areas with the most walkable urban space are New York City, Washington, DC, Boston, Chicago, San Francisco, and Seattle, and while these WalkUPS are showing “substantially higher rental premiums” than their drivable suburban counterparts, they are also, surprisingly, ranked highest on measures of social equity.
“What we’re seeing two years later with Foot Traffic Ahead 2016 is a continuous growth and expansion of walkable urban places across the country. In fact, the WalkUPs in each of the 30 metros examined were found to have gained office, retail and rental multi-family market share against drivable sub-urban competition in the current real estate cycle, the first time we have seen this in almost 60 years.” – Chris Leinberger, Charles Bendit Distinguished Scholar and Research Professor of Urban Real Estate and chair of the Center for Real Estate and Urban Analysis at the GWSB, and co-author of the report.
According to the report, the rental rate premiums range from 90% for urban office spaces, to 71% for retail spaces, to 66% for multi-family rental units (when compared with drivable suburban real estate), and although higher rental rates have traditionally been associated with gentrification, these higher housing costs are said to be offset by lower transportation costs and better access to employment, which seems to balance out the areas in terms of social equity.
The Foot Traffic Ahead: 2016 report also found that there is a “significant positive correlation” between the metro areas’ current state of walkable urbanism and the education levels of the workforce there, as well as a link between “walkable urbanism and metropolitan GDP per capita.”
The report also sought to identify which metro areas will “accelerate their evolution in a walkable urban manner,” and predicts that Detroit, Phoenix, LA, St. Louis, Miami, Atlanta, and Cleveland will lead the “low-to-middle ranked metros.”
“Development trends suggest a future urbanization of the suburbs that’s possible in every metro area. WalkUPs are a crucial component to building and sustaining a thriving economy and the demand we’re seeing would create a new economic foundation for our country, an opportunity we must take advantage of.” – Christopher Coes, director of LOCUS.
The report concludes with the following statement, which emphasizes the need for the continued development of the framework necessary for supporting further WalkUPs:
“With their histories of drivable sub-urban development, and reliance on automobiles and trucks, metros with low walkable urbanism generally resist walkable urban development. These metros, however, display indications of movement towards walkable urbanism based on the data in this analysis and because of local support for walkable urbanism, including developers, neighborhood activists, and elected leaders. Nonetheless, dominant infrastructure, zoning, and land-use subsidies for many metros will continue to favor drivable sub-urban development in lower-ranked metros. It is possible for them to catch on to what we see as a national trend towards walkable urbanism, and to do so requires the advocacy, place management, policy tools, and transportation infrastructure necessary to support the future form of American urban development.”
Download the full report at Smart Growth America.