Demand for real estate in walkable neighborhoods is growing, according to new research.
A new report
from the George Washington University School of Business finds compelling evidence that demand for real estate in pedestrian-friendly urban neighborhoods significantly exceeds supply. “DC: The WalkUP Wake-Up Call” introduces the term “WalkUP” as shorthand for “walkable urban places,” and concludes: “This research has found that WalkUPs, a niche market 20 years ago, are becoming the market of the future, both in the metro D.C. area and, likely, in the rest of the nation’s metropolitan areas.”
The implications of these findings are significant, as real estate and its supporting infrastructure comprise 35% of all assets in the U.S. Conventional sprawl development consumes land at 6–8 times the rate of population growth, according Chris Leinberger, senior fellow at the Brookings Institution and author of the report, and numerous studies link low-density development to higher greenhouse gas emissions.
The study builds on a Brookings Institution report
by Leinberger and Mariela Alfonzo, Ph.D., of New York University, which defines a ten-point scoring system for rating an area’s walkability. Analyzing six different types of WalkUPs in the D.C. metro area, the report finds that for each 6% improvement in a neighborhood’s walkability score, rent prices for office and retail space increase 7%, apartment rents increase 6%, and home sale prices go up $133/ft2.
The six types of WalkUPs defined in the report are:
1. Downtown: densely developed, primarily comprising office space, with visitor destinations and small but increasing amounts of housing
2. Downtown Adjacent: less density, with more residential and retail than downtown
3. Urban Commercial: primarily residential areas with retail and entertainment establishments, along with some office space
4. Suburban Town Center: old towns absorbed by urban sprawl into metropolitan areas
5. Strip Mall Redevelopment: mix of uses; huge potential for this type of development as older malls are abandoned
6. Greenfield: new towns developed from scratch on previously undeveloped land; relatively rare, and unlikely to be replicated widely because they are also very expensive
While the study is based entirely on one region, Leinberger makes the case that metro D.C. is a trendsetter in real estate nationwide, largely due to its highly educated population. The percentage of adults with a college education is increasing nationally, but DC is 20 years ahead of other walkable metro areas in that measure, and 40 years ahead of the nation as a whole.
Leinberger’s research has focused to date on what he calls “regionally significant” WalkUPs—those with at least 1.4 million square feet of office space and/or 340,000 square feet of retail. He is working to extend the research to include smaller WalkUPs that are more local in nature.
For more information:
DC: The WalkUP Wake-Up Call
George Washington University School of Business
Center for Real Estate and Urban Analysis
September 11, 2012
There are no comments for this page yet.