Within Walking Distance: Green realtor Kathy Maguire discusses how a neighborhood's walkability factor can help preserve property values
Oct 01, 2014 07:50PM
By Kathy Maguire
For decades, metropolitan Phoenix epitomized urban sprawl. Prior to the housing crash, builders were putting up 60,000 new homes annually at the desert’s city limits. However, when the housing market plummeted and some of those new neighborhoods were all but abandoned, Phoenix became committed to moving in the opposite direction—toward walkable neighborhoods connected by public transit. The makeover started with a new light rail line that connects remote communities, and the areas around each rail stop have been developed into denser, urban places where people actually want to spend time outside.
Looking at walkability from a property value standpoint, pedestrian-friendly walkways that connect to the places people want to go, such as shopping, services, public transportation and jobs not only foster a sense of community, but also improve property values. Check out WalkScore.com and see the data to prove it. This site uses Google maps to rate neighborhood walkability on a scale of 1 to 100 and provides information about distance to stores, restaurants, post offices, libraries and other community services.
Joe Cortright, of CEOs for Cities, analyzed data from 94,000 real estate transactions in 15 major markets and found that higher levels of walkability, as measured by Walk Score, were directly linked to higher home values. The key finding was that houses with above-average levels of walkability command a premium of about $4,000 to $34,000 over houses with just average levels of walkability.
After the housing slump and foreclosure crisis that began in 2008, it’s interesting to note that the steepest declines in value and the highest rates of foreclosure occurred in auto-dependent areas. Areas with transportation choices, including walkability, held their value.
It may come as a surprise to some that homebuyers that move to far-flung suburbs in search of affordable homes might be giving up what they save on mortgage payments to fill up their cars' gas tanks. In fact, a study by the Center for Housing Policy estimated that for every dollar saved on housing, the homeowner spent 77 cents on transportation. That calculation doesn't include commuting time or the environmental impact of carbon emissions from auto exhaust.
We are experiencing a shift to communities that are more conducive to walking and utilizing public transportation, and financial and real estate sectors are playing their part by building communities that are more environmentally, socially and financially sustainable. According to the Science Applications International Corporation, one person commuting alone by car that switches a 20-mile round trip commute for public transportation saves 4,800 pounds of carbon per year.
To rank local neighborhoods in terms of walkability and housing/transportation, an online, interactive mapping tool (htaindex.cnt.org) developed by the Center for Transit-Oriented Development and the Center for Neighborhood Technology shows average percentage of income spent on housing plus transportation for cities, towns and neighborhoods across the country. The index sets a benchmark of 47 percent of income as the amount a household should spend on housing plus transportation.
Kathy Maguire is a residential real estate agent with DPR Realty, LLC. She is EcoBroker certified and holds the National Association of Realtor’s GREEN designation, as well as GRI and ABR designations. For more information, visit KathyMaguire.com.