Guest post by Joan Campbell
More and more communities are making investments in pedestrian infrastructure and amenities. What is the economic payback of these investments, and what do the data show about the financial or tax returns from programs and policies that prioritize investments in the pedestrian realm?
The ULI Library receives many inquiries on this topic. Below are a few studies that investigate these questions. In general, the studies show positive economic returns resulting after pedestrian infrastructure is upgraded.
The newly released publication, Bicycling and Walking in the United States: 2014 Benchmarking Report, explores the economic impact of investments in infrastructure that supports walking and biking. Produced jointly by the Alliance for Biking and Walking and the Center for Disease Control’s Healthy Community Design Initiative, indicators such as job creation, retail sales, property prices, and tourism rates were evaluated on national, state, and city levels.
The findings are strong. Among the positive results reported was a 49 percent dip in commercial vacancy rates following the placement of a protected bike lane in New York’s Union Square North. The United States saw a roughly 20 percent boost in housing prices for properties located next to streets that curbed speeds by five to ten miles per hour. And Austin’s downtown bicycle boulevard is expected to add $1.2 million—and possibly up to $5.6 million—in financial returns over a ten-year period.
Business Performance in Walkable Shopping Areas, a 2013 report by Active Living Research, analyzed the correlation between active walking districts and the economic success of businesses located in those areas. Although an evaluation of existing literature revealed there was a limited amount of research on the topic, some studies point to positive economic impacts in areas where traffic-calming methods were employed and pedestrian amenities enhanced.
For example, when the town of Lodi, California, made improvements to School Street and offered economic incentives, 60 new stores opened, the vacancy rate dropped from 18 percent to 6 percent, and sales tax revenues shot up 30 percent. On Clematis Street in the city of West Palm Beach, Florida, property values increased twofold and average retail rental rates rose to $30 per square foot—up from $6. As in the case of Lodi, other factors contributed to the results, including improvements made to nearby neighborhoods and the development of the CityPlace mixed-use project.
Good for Busine$$: The Benefits of Making Streets More Walking and Cycling-Friendly is a 2011 report by the National Heart Foundation of South Australia. The study’s author, Dr. Rodney Tolley, conducted a review of the literature and evaluated 15 case studies in an effort to understand the value of walkability and pedestrian amenities.
What did he conclude? Rising retail rents, appreciation of neighboring home values, increased outside activities, and health benefits were all associated with a more active community. In one case study—Valencia Street in San Francisco’s Mission District—close to 40 percent of retailers said they saw increased sales after traffic lanes were calmed; 60 percent found more locally based people shopping in their stores. As Washington, D.C.’s Barracks Row’s commercial vibrancy continued to suffer, plans were put in place to slow traffic, redesign sidewalks, and improve visitor parking. Since the streetscape project was completed, 44 new businesses have come on board and 200 jobs were created. Furthermore, economic vitality—measured by pedestrian traffic, sales, and jobs—tripled.
Living Streets, a U.K.-based organization, tasked the University of West England along with Cavill Associates with examining the effects of investing in pedestrian-friendly spaces. Results were released in a report titled The Pedestrian Pound: The Business Case for Better Streets and Places. As in the studies referenced above, a review of the existing literature plus case studies were key research tools used to investigate the impacts on existing businesses, consumers, and urban regeneration. To get at the regeneration impacts from pedestrian investments, data such as the number of new businesses, tourism rates, labor force numbers, and changes in property values and rent levels were examined.
Some of the findings included a whopping 300 percent increase in employment after the redevelopment of the Temple Bar district in Dublin, Ireland. Hong Kong saw rental rates grow by 17 percent following pedestrian investments. And, the study noted, that overall commercial rates rose up to 30 percent for walkable projects.
As cities plan for more pedestrian-friendly projects, walk score and walkability—a measurement which the Brookings Institution defines as a mechanism by which to increase a place’s triple bottom line: profit (economics), people (equity), and planet (environment)—are common terms. The 2012 paper Walk This Way: The Economic Promise of Walkable Places in Metropolitan Washington, D.C., by Christopher Leinberger and Mariela Alfonzo, looked at neighborhoods in D.C. and nearby suburbs in Maryland and Virginia. Walkable places were found to be more economically prosperous, with “walkable districts”—walkable places close to similar pedestrian-friendly environments—experiencing higher rents and property prices.