The past 20 years has witnessed the expansive growth of walkable urban and mixed-use development, which has steadily pulled market share from traditional drivable suburban product. This evolution began in the 1990’s with what this writer calls “the Friends phenomenon,” building off the popularity of TV shows such as Friends or Seinfeld, both located in NYC, or ER, situated in Chicago – which highlighted urban lifestyles. These depictions of aspirational living were in clear contrast to the decades prior, which highlighted suburban living – think the nighttime soap Dallas, or further back, The Brady Bunch and CHiPs.
Today, the trend toward downtown living that began with the resurgence of tier one cities and their urban cores, has extended to communities of all shapes and sizes in the form of “Walkable Urban Places” or “WalkUps.” No longer limited to city centers, many of these WalkUps are being built in traditionally suburban regions.
Renowned land use strategies and author, Chris Leinberger, has conducted a series of reports that have detailed this seismic shift in market preference. His WalkUp Wake Up series has studied a half dozen metropolitan areas, including Washington D.C., Atlanta, New York and, most recently, Dallas.
While you can read each of these reports here, the findings are clear:
- Walkable Urban places command higher rent premiums, result in greater property values, demonstrate increased worker productivity and provide better overall economic performance as compared with their Drivable Suburban peers
- WalkUps represent a significant portion (if not a majority) of a region’s economic output, but are compact in nature, representing between 1-5% of a region’s overall land mass.
- While housing (both for rent and to own) is more expensive within WalkUps, these locations actually provide for greater social equity, as they result in lower overall cost of living when both housing and transportation are taken into consideration, while offering greater access to jobs and economic opportunity, especially for those WalkUps located at or near transit.
The market’s pent up demand for both residential and commercial uses that are located within walkable, mixed-use and transit served environments is clear. As is demonstrated in the chart above, Walkable Urban development has not only increased its market share at the expense of drivable suburban development, but it has done so at a pace not seen since the 1980’s, when the opposite was the case (in that era, drivable suburban production was eating into the market share of walkable urban locations, and continued to dominate new development for decades).
In fact, in Atlanta, the former “poster child of suburban sprawl”, net absorption for Walkable Urban development reached nearly 50% from 2010-2015, and in D.C. hit an astounding 91% for net absorption in this cycle. Even in Dallas, which is lagging other metros in walkable urban development, the trend line is consistent with those markets which have had a head start, and it is expected that an acceleration of walkable urban development is expected to occur into the future. This presents a tremendous opportunity for the real estate industry and communities across the nation to attract this market by inviting such development to occur and investing time and efforts accordingly.
These findings have significant repercussions for the real estate industry and for municipal leadership. The benefits of walkable urban development are both significant and demonstrable, and there is pent up demand looking to snap up new commercial and residential product located within these WalkUps. The obvious question is then: Where and how do investors, developers and municipal agencies focus their resources to capitalize on this latent demand?
Chris Leinberger’s findings included the following recommendations for their most recent report in the DFW region:
- Legalize WalkUPs in zoning (allow for greater densities and a mix of uses)
- Plan strategically for success (be intentional through infrastructure planning and land use policy)
- Be proactive about social equity; inequality is not a natural, inevitable, permanent, or desirable state (concerns about gentrification are legitimate, but can be countered by strategic approaches that result in new, additive investment and new residents without displacement of historic communities)
- Invest in transit, walking, and bicycling (not every place can be transit-served, but it is essential to maximize development where transit exists and to invest in a wide array of mobility choices)
In terms of private sector developers (and investors), walkable urban development outside of the urban core is very much a new mousetrap, especially in traditionally suburban regions where much of this new growth is to occur. To successfully overcome the hurdles associated with mixed-use development, it is essential to take a cross-disciplinary approach to the planning and development of new projects. This entails a facilitated effort that incorporates new methodologies to integrate land use strategies, infrastructure design, urban planning and public/private financing.
Economic Development Strategies (EDS) is at the forefront of the resurgence of walkable urban development. Our team is steeped in both public and private sector planning and development strategies, led by Brandon Palanker, who played a key role in both the New York Metro and, most recently, DFW Metro Walkup Wake Up research.