REALTORS®from across the country gathered last week to learn about the importance and benefits of walkable urban communities in real estate development during a panel organized by the REALTOR®University Richard J. Rosenthal Center for Real Estate Studies during the REALTORS®Legislative Meetings & Trade Expo.
“Creating walkability with restaurants and stores can help transition an edgy part of town into one that is hip and hopping with pedestrians,” says National Association of Realtors® Chief Economist Lawrence Yun. “This type of real estate development transforms the community for the better.”
Residential walkable communities generate four times the tax revenue compared to regional and business malls, bringing more value to the area, according to panelists.
“Walkable urban regions in the U.S. have a 41percent higher Gross Domestic Product over non-walkable regions,” says Christopher Leinberger, professor at George Washington University School of Business and president of Locus, a national coalition of real estate developers and investors who advocate for sustainable, walkable urban development in metropolitan areas. “That’s the difference between countries like Germany and Romania.”
Walkable areas provide financial benefits not only to the community but also to the individuals living there. Despite the rising prices commonly frequently seen in walkable areas, those communities are inherently more affordable since individuals living in walkable areas usually spend about 43 percent of their income on housing and transportation, as opposed to those living in non-walkable areas, who spend about 48 percent.
“If a family can get rid of one car, they can increase their mortgage capacity by as much as $150,000,” says Leinberger.
The panelists also discussed the importance of looking at current zoning regulations in major cities and how those regulations could be slowing down the development of walkable places. The panelists all agreed that the lack of development could be holding back economic growth.
“We’ve been bumping along at 2 percent GDP growth, and we should be at 3.5 percent, and obsolete zoning is what is holding us back,” says Leinberger. “Less than 10 percent of land would need to be rezoned, and that is where 80 percent of the development is going to go.”
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