A neighbourhood’s ‘walkability’ score has a direct impact on housing values and rents, and the link is set to intensify as more people seek properties in these areas, a new study has found.
An analysis of a sample of neighbourhoods in the Washington, D.C. metropolitan area, undertaken by the US-based Brookings Institution, quantified the link between an area’s walkability and a property's value and/or rent.
According to the report, each increase on a five-step ‘walkability’ measure equated to a $300 rise in residential monthly rents, a $9 per square foot increase in office rents, a $7 per square foot boost in retail rents, and a $81.54 per square foot premium for residential housing values.
The report also found that, post-GFC, while home values dropped steadily between 2008 and 2011, “distant suburbs experienced the starkest price decreases while more close-in neighborhoods either held steady or in some cases saw price increases”.
“This distinction in housing proximity is particularly important since it appears that the United States may be at the beginning of a structural real estate market shift. Emerging evidence points to a preference for mixed-use, compact, amenity-rich, transit-accessible neighborhoods or walkable places.”
The study also pointed to a survey by the National Association of Realtors (NAR), which found 58 per cent of home buyers preferred mixed-use neighborhoods where one can easily walk to stores and other businesses.
“The trend is swinging away from neighborhoods that contain primarily large-lot single-family housing, few sidewalks, ample parking, and where driving is the primary means of transportation,” the report continued.
“We consider walkability to be a mechanism by which to increase a place’s triple bottom line: profit (economics), people (equity), and planet (environment). On economics, recent studies show that both residential and commercial properties in neighborhoods with greater walkability have greater resale value.”