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In the decades since CNU was founded, market demand for mixed-use walkable places has skyrocketed, presenting new opportunities and raising the stakes for CNU’s work and the efforts of its members.
For example, one coalition of officials in Northwest Arkansas, led by the Walton Family Foundation, has committed to walkable urban solutions for future economic growth. The region, unimaginable as a New Urbanist frontier just a few years ago, nevertheless hosts Fortune 500 employers in need of talent, consisting mainly of people with a college degree, that demands a high quality of life.
The same factors are at play in Michigan, where state government has made a similar commitment. “We are trying to take advantage of new market demand that has been created,” says Gary Heidel, chief of placemaking at Michigan State Housing Development Authority. “It’s a combination of the millennial generation and baby boomers who want a specific type of lifestyle and are willing to live in that lifestyle” whether or not they have a job at first. Businesses locate where they can find talent, Heidel says. “It’s no longer the case that businesses locate just to get tax breaks or things like that. They have to be able to know they can attract talent for their industries.”
This point of view is backed up by serious research. Today, prospective office tenants prefer amenity-rich mixed-use centers (also known as “live-work-play” locations) over single-use office parks by a margin of 83 to 17 percent, according to a 2014 study by the NAIOP Research Foundation, which represents the commercial real estate industry in the US.
The report's bottom line: "… any company wanting to attract and retain young educated workers who prefer live, work, play locations needs to locate in a compact, mixed-use, walkable place, either downtown or in the suburbs."
In the last 20 years—largely in the last decade—jobs in and around downtowns have risen from less than 16 percent to 23 percent of the US total, a 44 percent increase. "Businesses are also moving to walkable transit-oriented suburban locations—or are spurring suburban areas to become denser and more walkable," according to Core Values, a 2015 study by Smart Growth America.
Demand for walkable urban neighborhoods is strong and growing, says Christopher Leinberger, president of LOCUS and chair of the Center for Real Estate and Urban Analysis at The George Washington University. A 2015 report co-authored by Leinberger called The WalkUP Wake-Up Call: Boston found that real estate in regionally significant walkable urban places (WalkUPs) was valued at a significant premium across all types—office, hotel, rental apartment, retail, and for-sale residential.
Much of the commercial real estate development in the recent real estate cycle is built in these areas, despite their accounting for just 1.2 percent of the total metro land area. “This analysis validates the shift towards walkable urban development that we’ve seen across the country,” says Leinberger.
Meanwhile, the biggest unmet desire in the housing market, according to a nationwide report called Who’s On Board 2014, is to live in a mixed-use neighborhood. The New York City-based nonprofit TransitCenter surveyed more than 11,000 people in 46 metropolitan statistical areas spanning the US geographically. Thirty-nine percent of respondents currently live in mixed-use neighborhoods, but 58 percent would like to do so. Nationally, the gap in unmet demand approaches 60 million people.
Academic researcher Richard Florida summarized a raft of new research in 2015 showing that walkable places “not only raise housing prices but reduce crime, improve health, spur creativity, and encourage more civic engagement in our communities.” Much of this research is made possible by WalkScore, a real estate analysis tool that assigns a walkability score to every address in the US.
A 2014 report called The Young and the Restless captured the extent and depth well-educated adults moving to urban centers. This demographic group is:
Choosing bigger cities.
- Well-educated young adults are disproportionately found in a few metropolitan areas. Two-thirds of the nation’s 25 to 34-year-olds with a Bachelor’s degree live in the nation’s 51 largest metropolitan areas, (those with a million or more population). This trend grew by 19 percent from 2000 to 2010.
Moving to the center.
- Young college-educated adults are much more likely to choose close-in urban neighborhoods, within 3 miles of downtown. In the aggregate, they are more than twice as likely to live in these neighborhoods, and 49 of the nation’s 51 largest metro areas saw increases in 25- to 34-year-olds with college degrees in these close-in neighborhoods. This trend grew by 37 percent from 2000 to 2010.
As a result, businesses are following. Businesses are increasingly locating in or near urban centers to better tap into the growing pool of well-educated young workers, and because these locations enable firms to better compete for talent locally and recruit talent from elsewhere.