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Walking into the Future

February 8, 2013

The market shows home owners are interested in smart growth living

 

The oldest mode of travel — walking — is suddenly one of the hottest as more and more home buyers want to live where they can park their cars and use their feet.

“In the last eight years, there’s been a profound shift in the home-buying habits of America,” said Dan Burden, founder of Walkable Communities, a nonprofit organization that promotes walkability. “The trend isn’t just significant — it’s mind-boggling.”

In 2000, when participants in a housing study were shown pictures of traditional neighborhoods, 25 percent said that was what they wanted, Burden said. “As of 2008, a new study showed the numbers have flipped with 75 percent wanting the traditional neighborhood — traditional meaning walkable,” he said.

The prices commanded by homes in walkable neighborhoods reflect the demand. A study released in August by CEOs for Cities, a national network of public and private urban leaders, analyzed home sales in 15 markets nationwide. In 13 of those markets, there was a direct connection between home values and higher levels of walkability. The study used walkability scores from Walk Score, a Web site that calculates the walkability of any address in the country based on proximity to the closet amenities — stores, parks, restaurants, etc.  

In some ways, Walk Score itself is a reflection of the demand for walkability. “I see a lot of consumers using Walk Score,” said Michael Kiefer, a REALTOR® and broker-owner of Green DC Realty in Washington, D.C. “They ask me all the time about it.”

Kiefer specializes in D.C.’s urban core. Rejected during the great exodus to the auto-oriented suburbs that began 50 years ago, city living is making a comeback across the country as people tire of long drives to jobs and entertainment. In D.C., a wave of condo and town home construction is being accompanied by new stores, restaurants and other businesses — all ingredients of walkable neighborhoods.

“I can’t tell you how many clients I’ve had who don’t have cars,” Kiefer said. “They want to be able to walk different places and not use a car. It’s like a whole new matrix for evaluating [residential value].”

The majority of his clients are either young professionals in their 20s or empty nesters in their 50s, Kiefer said. They are members of the two largest generations in the history of America — the 78 million millennials born between 1977 and 1996 and the 82 million baby boomers born between 1946 and 1964.

By 2015, the rising tide of both generations will peak at 44 million each — an unprecedented convergence, said Todd Zimmerman, managing director at Zimmerman/ Volk Associates, a real estate consulting firm. But size is not the only similarity. The two generations also share an appetite for walkable living — and the amenities that go with it — that fits their childless lifestyles.

“That’s not to say all households without kids don’t want a single-family home on a large lot, but a lot of them don’t,” said Ellen Dunham-Jones, director of the architecture program at Georgia Tech University and co-author of “Retrofitting Suburbia: Urban Design Solutions for Redesigning Suburbs.”

In some cases, the quest for a walkable way of life leads toward the urban core. In others, it leads to places like Orenco Station outside Portland, Ore. Orenco Station is a walkable community built from scratch around a light-rail station and a town center. About two-thirds of the residents are empty nesters and most of the rest are young professionals, said Jim Rostel, a REALTOR® and broker-owner at Orenco Station Realty. “It’s really a self-contained community,” Rostel said. “I’ve had clients who moved in and sold one of their cars because you can walk to the grocery store, walk to Starbucks and you have light rail to go downtown.”

Walkability was at the top of Mark and Anna Stickel’s list when they moved to Orenco Station two years ago. The semi-retired couple own just one car and put only about 3,000 miles a year on the odometer.

“We try to do most of our travel by walking,” Mark said. “It’s easier on the environment and good exercise, too. If we need to go to downtown Portland or shopping malls or the airport, we always take the train.”

While not immune to the housing slump, Orenco Station’s town homes, condos, row homes, lofts and cottages still fetch the area’s highest price per square foot, Rostel said. “The smart builders will recognize that the demographics have changed significantly and will build … more places like Orenco Station,” he said.

After decades of developing auto-dependent suburbs, it’s past time to get started, said Christopher Leinberger, land-use strategist, developer and author of “The Option of Urbanism: Investing in the American Dream.”

In most metropolitan areas, just 5 to 10 percent of the housing stock is located in walkable neighborhoods, yet recent consumer research by Jonathan Levine at the University of Michigan suggests that roughly one in three home owners would prefer to live in such places, Leinberger said. Since the total housing stock in the United States is growing by only 2 or 3 percent or so per year, “it’s going to take us a generation to catch up with the pent-up demand,” he said.

A close look at the current housing crisis underscores the relative strength of the demand, said Leinberger. The steepest declines in value and the greatest number of foreclosures are occurring in auto-oriented suburbs. Meanwhile, walkable neighborhoods are retaining more of their value.

“The biggest problem we have in real estate is overbuilding,” Leinberger said. “The most important thing is to stop building [auto-oriented suburbs].”

That doesn’t mean the suburbs have no future. “The pent-up demand for [walkable] neighborhoods is going to be satisfied only partially in … downtowns and places adjacent to downtowns,” Leinberger said. “Two-thirds of the demand is going to be satisfied in the suburbs.”

Smart growth can help make that happen. Creating walkable neighborhoods is both a principle of smart growth and an outcome. By emphasizing compact development with a mix of uses and a range of transportation options beyond the automobile, smart growth provides a basic framework for encouraging walkability.

The appetite for walkability isn’t just the result of millennials and baby boomers craving a different lifestyle. Rising energy costs provide everyone with a reason to take their cars out of the garage less often.

In a walkable neighborhood, a family spends 9 percent of its income on its cars, Leinberger said. In an auto-oriented suburb, it spends 25 percent.

Yet that may be worth it for families with children who want a big house and big yard no matter what. “There’s still a lot of people willing to make that trade-off,” Leinberger said. “It’s not a matter of what’s right and what’s wrong. It’s a matter of choice.”

Sandra Keith is a REALTOR® and broker-owner of Lighthouse Realty in Sarasota, Fla. The predominant development pattern there is “classic suburban sprawl,” Keith said, but the county is encouraging the creation of walkable neighborhoods.

Keith said home buyers sometimes give mixed signals about walkability. “It’s a Catch-22,” Keith said. “Although people like [walkable neighborhoods], we are very attached to our cars, and we’ve become used to driving places.”

Nevertheless, Keith said, the pendulum is clearly swinging away from continued development of auto-oriented suburbs and toward walkable development. “It’s not just a trendy thing,” she said. “I believe it is, in fact, a new way of life.”

So does Dunham-Jones. And not just for the childless millennials and baby boomers. Members of the child-rearing generation in between — generation X — might be joining them. “The idea that a single-family home with a large lot is the best thing for families is coming under more and more scrutiny,” Dunham-Jones said.

In an auto-oriented suburb, parents must drive children everywhere, but in a walkable neighborhood, kids can use their feet. Given the nation’s alarming rates of childhood obesity and type 2 diabetes, that’s food for thought, Dunham-Jones said. So is the fact that walkable neighborhoods give teens without driver’s licenses the mobility they desperately desire.

Regardless of the generation involved, price premiums of 40 to 200 percent per square foot are proof that demand for walkable neighborhoods is exceeding supply, Leinberger said.

Example: Carillon Point, a mixed-use development near downtown Kirkland, Wash., a suburb of Seattle. “The housing there gets an 80 percent price premium over housing still in Kirkland but where you have to drive downtown,” Leinberger said.

Although the housing slump has slowed progress, demand for walkability is fueling efforts to make suburbia more walkable. “Eighty percent of built America is now suburban, so if we can’t use 80 percent of America, we’re in trouble,” Burden said.

Dunham-Jones pointed to MetroWest, a high-density, mixed-use community being built within walking distance of a rail station in the D.C. suburb of Fairfax County, Va. The developer, Pulte Homes, purchased 69 single-family homes at double their value to make way for the project, she said.

Projects like that show just how powerful the economic drive is for walkable living, Zimmerman said. “America will be much more walkable 20 years from now at every scale,” he said.