There is such pent-up demand for walkable urban development that staggering price premiums have occurred. Places as far flung as Seattle; Denver; Atlanta; Columbus, Ohio; as well as metro D.C. neighborhoods adjacent to downtown considered slums 20 to 30 years ago had for-sale prices per square foot far below ritzy, drivable, suburban neighborhoods served by luxury shopping, private golf clubs, and high-achieving public and private schools. Today, these neighborhoods, like Short North in Columbus and Highlands in Denver, are far more expensive than their suburban competition. In metro D.C., walkable, urban, for-sale housing sells for a 71% price premium on a price per square foot basis. The lines have crossed as walkable urban neighborhoods have gentrified. The same crossing of lines has occurred with office, hotel, and apartment rents in many metros.
The market is telling the real estate industry to build more walkable urban product, the most environmentally benign form of the built environment. Arlington, Va., across the Potomac River from the District of Columbia, has been a model of compact urban development over the past 30 years. From 1980 to 2009, nearly 23 million square feet of commercial space and more than 28,000 new housing units were built around seven of Arlington’s Metrorail stations, though occupying only 10% of the county’s land mass. According to “Growing Wealthier,” households in these WalkUPs drive an average of 11 to 17 miles per day. In contrast, nearby suburban counties’ households averaged 35 to 65 miles per day. In addition, the new residential development in Arlington is comprised of townhouses and multifamily buildings, resulting in significantly less energy consumed per household for heating and cooling.
Calthorpe estimates in Urbanism in the Age of Climate Change that households living in energy-efficient homes in urban areas produce 74% less GHG than those living in an average single-family home in a suburban area. However, this number only includes the impact of residential location.
Though poorly studied at present, as businesses increasingly choose offices and retail spaces in WalkUPs, there may be an even greater impact, with employees taking transit at a greater rate or being able to walk or bike to work. Google has substantial office locations in downtown San Francisco, Chicago, and New York. Even Detroit, the poster child of industrial decline, has seen a rush of new employment moving to downtown, such as Rock Financial, parent of Quicken Loans.
Arlington County experienced the substantial growth described above but also had an absolute reduction in vehicle miles traveled on its major arterials over the same time period. The products of the emerging knowledge economy, such as the software used to write this article, arrived on this computer via the Internet, not a truck.
There is such a high price premium in these WalkUPs that they are out of the financial reach of many of those who would like to locate there. It is incumbent upon policymakers to ensure the removal of barriers that push up land prices for developers trying to meet this demand. In addition, public programs need to encourage and subsidize affordable housing in these locations.
The production of new walkable places, the intensification of those that already exist, and the expansion of transit and nonmotorized transportation infrastructure will expand the walkable urban options available to consumers. The United States will literally build its way out of the environmental conundrum Owen says we are in.
Giving the market what it is demanding—more affordable and walkable urban development—is one of the best ways, if not the best, of reducing GHG emissions. Following Mr. Miyagi’s advice, combined with supply efficiency and a carbon tax, is the most effective path toward addressing climate change.
Christopher B. Leinberger is president of LOCUS, a walkable urban developer organization affiliated with Smart Growth America, and Vision 2020 chair for Sustainable Communities. He is a professor at George Washington University School of Business, a director of the Center for Real Estate and Urban Analysis, a nonresident senior fellow at the Brookings Institution, and a partner in Arcadia Land Co. (Mason Austin, research associate at the GW Center for Real Estate and Urban Analysis, assisted with this article.)