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A $500 Premium? The Value of Walkability

by Shilpi Paul

A $500 Premium? The Value of Walkability: Figure 1
Downtown DC by Shay Thomason

Expanding on the finding that more walkable neighborhoods have higher home prices, a new study released by the Brookings Institution takes a look at exactly how the numbers break down.

Brookings ranked neighborhoods around DC using a scoring system that took into account features like connectivity, density, proximity of uses and traffic measures. It then separated the neighborhoods into five levels of walkability. According to the report, a jump up to the next level of walkability (from Wheaton to Adams Morgan, for example) can yield significant increases in housing prices and rents. It concluded that the most walkable neighborhoods in the area are Georgetown and Courthouse and the least are along sections of New York Avenue and Naylor Road.

From the report:

A one-level (or approximately 20 pt) increase in walkability translates into a $8.88 value premium in office rents, a $6.92 premium in retail rents, an 80 percent increase in retail sales, a $301.76/square foot premium in residential rents, and a $81.54/square foot premium in residential housing values.

A $500 Premium? The Value of Walkability: Figure 2
Courtesy of Brookings.

The report concluded that it’s also valuable to be clustered near other walkable neighborhoods. Compared to standalone walkable areas, the clustered neighborhoods commanded nearly 41 percent more in office rents, 47 percent more in retail rents, and nearly 31 percent more in residential rents. The chart above shows that there is about a $500 difference in the average rents between standalone walkable areas and those that are clustered.

All of this points to a shift in preferences that UrbanTurf has been seeing for some time: suburbs are out, and walkable urban centers are in. Also, prices are high because of a supply/demand problem: more people want to live in walkable neighborhoods than the current housing inventory allows.

People talk about this shift all the time, but the authors of this report are hoping that by attaching real numbers to the economic benefits of living and setting up shop in a walkable neighborhood, policy makers and developers will be able to move quickly to create the kinds of neighborhoods people want to live in.

See other articles related to: walkable, walkability, brookings institution

This article originally published at https://dc.urbanturf.com/articles/blog/the_value_of_walkability/5587

2 Comments

  1. JP said at 1:12 pm on Wednesday May 30, 2012:
    I read this report a few days ago and was amazed that somebody spent time researching anything this obvious. Also, I found it odd that the study was attributing the income and educational attainment of certain neighborhoods to be a result of proximity to a number of desirable amenities. The problem is the report leads you to conclude that amenities drive up the value of a neighborhood which is a totally false pretense. The evolution of a neighborhood begins with demographics, and amenities follow. Not the other way around. Businesses and other amenities tend to follow the path of money. When you have a neighborhood with a high concentration of wealthy residents, a wide variety of businesses will relocate to capitalize. Businesses don't usually move to high crime, low income neighborhoods in hopes of attracting the right demographics. The study was a complete waste of time and somehow arrived at incorrect conclusions
  1. mmmmmmmark said at 6:59 pm on Wednesday May 30, 2012:
    I have to disagree completely. I read this report as well and to call it a "complete waste of time" is awfully shortsighted. It is a useful economic exercise that provides insight into how neighborhoods work and why development goals have been changing recently to offer more walkable, mixed use environments. To say that the report finds that proximity to amenities causes income and educational attainment is a grossly incorrect interpretation. The income, educational, etc attributes of a neighborhood's residents is not a result of the amenities, the amenities happen to draw people with these specific attributes. I also don't understand how you can argue that amenities don't drive up the value of a neighborhood. If they don't, then what does? I argue that business don't follow the path of money, but opportunity, which should lead directly to 'money' if the right opportunities are chosen. Businesses don't ONLY sprout up in areas with wealthy residents, they also appear in areas expected to grow, or where they can more effectively target the right customers. Take H Street. Do you think the businesses there started because of "a high concentration of wealthy residents"? I sure don't. They moved there because of opportunity and the prospect that the area would grow into a hip neighborhood where customers with disposable income would want to visit and live. So to say that "businesses don’t usually move to high crime, low income neighborhoods in hopes of attracting the right demographics." is false.

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