“Walkable Urbanism” Has Strong Market Potential

Here’s a thoughtful book review written by Newton resident Jim O’Connell, who served on the team that created Newton’s Comprehensive Plan.  Even if you don’t get Leinberger’s book, which sounds like it’s worth a read, the review itself has a lot to say about the direction development ought to take in Newton.  I urge you to read this.

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“Walkable Urbanism” Has Strong Market Potential

Review of Christopher B. Leinberger, The Option of Urbanism: Investing in a New American Dream (Washington, DC: Island Press, 2007); $25.95.

Originally Published in New England Planning (American Planning Association Chapter Newsletter), January, 2009

Jim O’Connell

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There have been a large number of books and reports in recent years discussing the environmental benefits and design principles of building compact, mixed-use developments near transit stations. One part of the discussion that has been missing is the economic feasibility of building such projects.

Christopher Leinberger has addressed this question in a valuable new book—The Option of Urbanism: Investing in a New American Dream (2008). Leinberger, with a lifetime of experience in real estate and a position at the University of Michigan, argues that “walkable urbanism” has tremendous upside. There is an enormous demand for it that is not being met.

Before World War II, most development in America was “walkable urbanism,” but after the war, development patterns became almost entirely oriented to “drivable sub-urbanism.” Over the past decade, however, the pendulum has been swinging back to include more walkable neighborhoods. America’s knowledge economy and evolving demographics are producing the desire for more varied housing and job location choices, as opposed to the one-size-fits-all drivable suburbanism of the latter half of the 20^th century. For a metropolitan area to be economically competitive, it needs a variety of housing choices, especially to accommodate the “creative class,” which has been identified by urbanist Richard Florida.

Leinberger analyzes polls that find one-third of the American public would prefer to live in compact, mixed-use neighborhoods that are easily walkable and can access public transit. One-third of Americans would prefer to live in low-density, large-lot, single-family homes, and the remainder of the public could accept either type of development. The book cites a survey showing that 40% of those surveyed in Greater Boston desired walkable urbanism, while 30% favored drivable suburbanism and 30% would accept either. Leinberger estimates that 10% of housing in Sunbelt cities like Atlanta and Phoenix is in walkable urban places, while 25% of housing in Boston and Chicago is in this category. This indicates pent-up demand for walkable urbanism. Meanwhile, the housing industry has been building mainly McMansions in drivable suburbs, though this may change with the economic meltdown.

Leinberger demonstrates the large demand for walkable urbanism by citing the high real estate prices in attractive walkable neighborhoods, primarily located in central cities. He points out that the housing units that have best held their value during the current economic downturn have been in walkable neighborhoods and the houses that have lost the most value have been located on the suburban periphery. Gentrification is a problem because there are not enough walkable urban neighborhoods to meet demand, and the less affluent get squeezed out.

Some of the most persuasive information in The Option of Urbanism relates to the per foot cost differential between urban and suburban housing. The book argues that walkable urbanism can be worth 40-200% more than comparable single-family homes in far-flung suburbs. In Denver, a luxury unit in downtown costs about $487 per square foot as opposed to $195 per square foot for a $750,000-$1,500,000 home in the master-planned community of Highland Ranch, amounting to a 150% premium. In New York’s Westchester County, comparable units cost twice as much in downtown White Plains as in a drivable subdivision. And a comparable unit in Manhattan costs 200% more. It was not like this 20 or 30 years ago.

Christopher Leinberger identified five types of “regional-serving walkable urban places” that can fulfill market demand—traditional downtowns, downtown-adjacent neighborhoods, suburban towns, “greenfield” towns, and redeveloped regional and strip malls (the country has 10,000 abandoned or declining malls). According to Leinberger, 60-70% of all demand for walkable urbanism will be met in suburbs.

Each walkable area should have between 200 and 500 acres located around a fixed-rail transit station. The walking radius from the transit station is 1,500-2,000 feet. Where fixed-rail transit is not available, especially on the commercial strip, walkable urban places can still be created. Besides housing, these neighborhoods should have a mix of work opportunities, shopping, culture, and educational and community facilities.

Leinberger estimates that each metropolitan region should have one “regional-serving walkable urban place” for every 300,000 people. That means that a metropolitan area of five million people such as Washington, DC, or Boston should have at least 16 such places. He figures there are approximately 400 such walkable places like this in United States, while there is a current demand for 800 walkable urban places. And he argues that most of the existing walkable areas can accommodate significant additional development. In addition to the regional urban places, there is a need for thousands of smaller “neighborhood-serving walkable places,” which are primarily residential enclaves and may not have fixed-rail connections.

Leinberger’s book is suggestive about the future of “walkable urbanism” in Massachusetts. With a spate of pre-World War II communities and an extensive public transit system in the eastern part of the state, Massachusetts seems to be in good shape for providing the “option of urbanism.” It would be useful to determine how many “regional-serving walkable urban places” this state already offers and strategize how they can be strengthened and new ones can be developed. The Metropolitan Area Planning Council’s MetroFuture Regional Plan provides a foundation for such a planning exercise in metropolitan Boston.

To be effective at developing walkable urban places, communities need to rezone their centers and areas near transit stations to allow greater density and a mix of uses. Some municipalities have made a start under the state’s 40R subsidy program, but more concerted efforts are needed. Leinberger argues that financial institutions also must take a more patient long-term approach when investing in transit-oriented mixed-use development, instead of strip shopping centers and “greenfield” subdivisions.

Besides, his persuasive argument about the growing market for walkable urbanism, Christopher Leinberger also provides a snappy synopsis of the development of drivable sub-urbanism in the post-World War II era. He concludes his book with a fundamental question: “The only question is whether the market will just take its course over many decades or whether walkable urbanism will be part of a new American domestic policy to speed up the process.” Leinberger urges us to recognize that more compact development patterns may be as important in preserving the environment as carbon taxes, alternative energy sources, and more efficient vehicles.