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WALKING, THE URBAN ADVANTAGE

The walking generation; A demographic perfect storm; The walkability dividend

Many of my client cities ask me the same question: “How can we attract corporations, citizens, and especially young, entrepreneurial talent?” In Grand Rapids, Michigan, where I am employed by the city’s leading philanthropists, they ask it differently: “How can we keep our children from leaving? How can we keep our grandchildren from leaving?”

The obvious answer is that cities need to provide the sort of environment that these people want. Surveys—as if we needed them—show how creative-class citizens, especially millennials, vastly favor communities with street life, the pedestrian culture that can only come from walkability.

A lack of street life was one reason why the leadership at Wolverine World Wide, the manufacturers of Merrell and Patagonia Footwear, was having trouble keeping new creative workers from jumping ship from their suburban West Michigan headquarters. The problem was not the company, but the impression among newly arrived spouses that they had no way to break into the social scene … even though West Michiganders are known for their openness and hospitality. So what was going on? It turns out that this social scene could only be accessed by car and thus by invitation. With no pedestrian culture, there were no opportunities for the chance encounters that turn into friendships.

When it came time to launch a new apparel division, they decided to base it in Portland, Oregon.

Since that time, Wolverine has set up a new innovation center along with three other top West Michigan companies in downtown Grand Rapids. According to Blake Krueger, Wolverine’s president and CEO, the company needed “an urban hub that attracts and retains the millennial creative class. You need a vibrant city heartbeat for these people. Downtown, they’re in a more creative live/work/play environment than if they are stuck out here in suburbia.” This facility now includes designers and product developers across a dozen different brands.

For many companies, an urban satellite is not enough. Brand Muscle, formerly of leafy Beachwood, Ohio, recently relocated all of its 150 employees to downtown Cleveland, thanks in part to the desires of a largely twentysomething workforce. Now staffer Kristen Babjack brags about her urban lifestyle: “We can leave our apartment and walk five feet to a restaurant to get something to eat, or to go shopping. We have all of our arenas and sporting areas and concerts all in one pretty much walkable area.” Similar stories are making the news in Saint Louis, Buffalo, and even in beleaguered Detroit.

The economic advantage that has already begun to accrue to walkable places can be attributed to three key factors. First, for certain segments of the population, chief among them young “creatives,” urban living is simply more appealing; many wouldn’t be caught dead anywhere else. Second, massive demographic shifts occurring right now mean that these pro-urban segments of the population are becoming dominant, creating a spike in demand that is expected to last for decades. Third, the choice to live the walkable life generates considerable savings for these households, and much of these savings are spent locally. I will address each of these factors in turn.

THE WALKING GENERATION

When I worked for the town planning firm DPZ in Miami in the nineties, everyone drove to the office, without exception. Taking transit or bicycling made no sense at all, as the buses took forever and the biking was worse than perilous. In more recent visits, I learned that a significant segment of the young designer workforce now bikes or rides the bus, even though the conditions for either are hardly better.

These are the same folks who have put a composting bin in the office kitchen … so are they just the exceptions to the rule?

It turns out that since the late nineties, the share of automobile miles driven by Americans in their twenties has dropped from 20.8 percent to just 13.7 percent. And if one looks at teens, future shifts seem likely to be greater. The number of nineteen-year-olds who have opted out of earning driver’s licenses has almost tripled since the late seventies, from 8 percent to 23 percent.1 This statistic is particularly meaningful when one considers how the American landscape has changed since the seventies, when most American teens could walk to school, to the store, and to the soccer field, in stark contrast to the realities of today’s autocentric sprawl.

This trend began well before the recession of 2008 and subsequent fuel spikes, and is seen as cultural, not economic. Market researchers J. D. Power—hardly part of the anticar lobby—report that “online discussions by teens indicate shifts in perceptions regarding the necessity of and desire to have cars.”2 In “The Great Car Reset,” Richard Florida observes: “Younger people today … no longer see the car as a necessary expense or a source of personal freedom. In fact, it is increasingly just the opposite: not owning a car and not owning a house are seen by more and more as a path to greater flexibility, choice, and personal autonomy.”3 These driving trends are only a small part of a larger picture that has less to do with cars and more to do with cities, and specifically with how young professionals today view themselves in relation to the city, especially in comparison to previous generations.

Born as the baby boom ended, I grew up watching three television shows almost daily: Gilligan’s Island, The Brady Bunch, and The Partridge Family. While Gilligan’s Island may have had little to say about urbanism, the other two were extremely instructive. They idealized the mid-twentieth-century suburban standard of low-slung houses on leafy lots, surrounded by more of the same. This was normal and good. As a would-be architect, I was particularly susceptible to the charms of Mike Brady’s self-built split-level. This is not to say that there were no urban shows on my television set. I saw a good amount of four: Dragnet, Mannix, The Streets of San Francisco, and Hawaii 5-0—all focused on one subject: crime.

Now, contrast my experience growing up in the seventies with that of a child growing up in or around the nineties, watching Seinfeld, Friends, and, eventually, Sex and the City. In these shows, the big city (in all cases New York) was lovingly portrayed as a largely benevolent and always interesting force, often a character and coconspirator in its own right. The most urban of American cities was the new normal, and certainly good.

The first thing that I take away from this comparison is that I watched far too much television as a child. But the real point here is that today’s young professionals grew up in a mass culture—of which TV was only one part—that has predisposed them to look favorably upon cities; indeed, to aspire to live in them. I grew up in the suburbs watching shows about the suburbs. They grew up in the suburbs watching shows about the city. My complacency has been replaced by their longing.

This group, the millennials, represent the biggest population bubble in fifty years. Sixty-four percent of college-educated millennials choose first where they want to live, and only then do they look for a job.4 Fully 77 percent of them plan to live in America’s urban cores.5

A DEMOGRAPHIC PERFECT STORM

Meanwhile, the generation raised on Friends is not the only major cohort looking for new places to live. There’s a larger one: the millennials’ parents, the front-end boomers. They are citizens that every city wants—significant personal savings, no schoolkids.

And according to Christopher Leinberger, the Brookings Institution economist who first brought my attention to the Brady Bunch/Friends phenomenon, empty nesters want walkability:

At approximately 77 million Americans, they are fully one-quarter of the population. With the leading edge of the boomers now approaching sixty-five years old, the group is finding that their suburban houses are too big. Their child-rearing days are ending, and all those empty rooms have to be heated, cooled, and cleaned, and the unused backyard maintained. Suburban houses can be socially isolating, especially as aging eyes and slower reflexes make driving everywhere less comfortable. Freedom for many in this generation means living in walkable, accessible communities with convenient transit linkages and good public services like libraries, cultural activities, and health care.6

In the 1980s, my city-planning colleagues and I began hearing from sociologists about something called a NORC, a naturally occurring retirement community. Over the past decade, I have watched a growing number of my parents’ generation abandon their large-lot houses to resettle in mixed-use urban centers. My own parents finally jumped ship last year, moving from leafy Belmont Hill, Massachusetts, to only-slightly-less-leafy but much more walkable Lexington Center. For them, that increased walkability means all the difference between an essentially housebound existence and what we all hope will be several decades of continued independence.

On the cusp of their eighties, my parents could be considered late adopters. But as pre-boomers, they represent a trickle of what is to become a torrent. Leinberger notes how, starting now, an average of 1.5 million Americans will be turning sixty-five every year, quadruple the rate of a decade ago.7 This rate will not begin to plateau until 2020 and we will not see it return to current levels until 2033.

In combination with their independent children, these retiring boomers will numerically overwhelm those families of child-rearing age who typically prefer the suburbs. This upcoming convergence represents “the biggest demographic event since the baby boom itself.”8 Of the 101 million new households expected to take shape between now and 2025, fully 88 percent are projected to be childless. This is a dramatic change from 1970, when almost half of all households included children. These new adults-only households won’t give a hoot about the quality of local schools or the size of their backyards. “This fact will open up many possibilities,” Leinberger observes.9

As that current statistical oddity, a parent of young children, I often advocate for stronger public schools and neighborhood parks to benefit families. I remind people that a community cannot fully thrive in the absence of any generational cohort, since we all support one another. I like to quote David Byrne: “If we can build a successful city for children, we can build a successful city for all people.”10 This is true enough, but I am often reminded that I lived comfortably for a full decade in one of the most extreme exceptions to that rule, Miami’s South Beach, where I could easily go for a month at a time without a stroller sighting. Not one adult in my neighborhood appeared to be between thirty-five and fifty-five, and none seemed (productively) fertile. Yet South Beach was and remains a great place physically, socially, and economically. Demographically speaking, South Beach is the future of many American cities.

That seems to be the case in walkable Washington, D.C., where the past decade has seen a 23 percent uptick in the number of residents between twenty and thirty-four, simultaneous with an increased number of adults in their fifties and early sixties. Meanwhile, the number of children under fifteen has dropped by 20 percent.11

Clearly, Leinberger is optimistic about the larger impact of these population trends on cities. Writing in Grist, he concludes that “meeting the pent-up demand for walkable urban development will take a generation. It will be a boon to the real estate industry and put a foundation under the American economy for decades, just as the construction of low-density suburbs did during the last half of the 20th century.”12 Whether or not it can salvage our struggling economy, he makes a convincing case that people will be moving back to the city.

The question that remains is: Will they be moving back to your city, or to someone else’s? The answer may well lie in its walkability.

Christopher Leinberger was once the owner of Robert Charles Lesser & Co., the largest real estate advisory firm in the United States, which means that he helped to build a lot of sprawl. He is now convinced that much of suburbia is poised to become “The Next Slum.”13

In order to study real estate performance, Leinberger divides the American built environment into two categories: walkable urbanism and drivable sub-urbanism. In the Detroit region, he finds that housing in walkable urbanism fetches a 40 percent price premium over similar housing in drivable sub-urbanism; in the Seattle region, that premium is 51 percent; in Denver, it’s 150 percent. New York City, unsurprisingly, tops the list at 200 percent—that is to say, people are paying three times as much per square foot for apartments in walkable neighborhoods as for comparable suburban houses. In most markets, the demand for walkable urbanism dramatically outpaces the supply: in Atlanta, only 35 percent of poll respondents who want to live in a walkable urban place are able to find and afford it.14

A similar dynamic can be found at work for commercial properties. In Washington, D.C., walkable office space recently leased at a 27 percent premium over drivable suburban office space and had single-digit rather than double-digit vacancy rates. The Wall Street Journal has confirmed similar trends nationwide: while the suburban office vacancy rate has jumped 2.3 points since 2005, occupancy in America’s downtowns has held steady.15

Looking at these numbers, Leinberger concludes:

The metropolitan area that does not offer walkable urbanism is probably destined to lose economic development opportunities; the creative class will gravitate to those metro areas that offer multiple choices in living arrangements.… As consumer surveys in downtown Philadelphia and Detroit in 2006 have shown, this seems to be particularly true for the well-educated, who seem to have a predilection for living in walkable urban places.16

This growing demand for pedestrian-friendly places is reflected in the runaway success of Walk Score, the website that calculates neighborhood walkability. It was started on a lark in 2007 by Matt Lerner, Mike Mathieu, and Jesse Kocher, three partners in a software company with the incongruously automotive name of Front Seat. “I had heard a story on NPR about food miles in England—labeling food with how far it had to travel to get to you,” Lerner told me recently, “and I thought, why not instead measure house miles: how many miles from your house you had to go for daily errands.”

Addresses are ranked in five categories, with a score of 50 needed to cross the threshold from car dependent to somewhat walkable. Seventy points earns a very walkable ranking, and anything above 90 qualifies as a walker’s paradise. San Francisco’s Chinatown earns a 100, as does NYC’s Tribeca, while Los Angeles’s Mulholland Drive rates a 9. South Beach in Miami gets a 92. Nike’s headquarters in Beaverton, Oregon, comes in at a car dependent 42, while the street address of the nationally acclaimed “Walking Guru” Leslie Sansone, of New Castle, Pennsylvania, has a Walk Score of 37.¦

Tellingly, Walk Score has become a big hit with real estate agents. Driven by their demand, the Front Seat team has recently developed Walk Score Professional, a subscription site that already boasts links from more than ten thousand other websites, most of them belonging to realtors.

I spoke with one of these agents, Eva Otto, whose face adorns a testimonial on the Walk Score homepage. She is confident that “in a place like Seattle, walkability is the make or break for some buyers. It can add 5 to 10 percent to a person’s willingness to pay for a house.” For each property she handles, she places the Walk Score website amenity map inside the house in an obvious place. She comments that her buyers are increasingly aware of “how surprising and delightful your quality of life can be when you don’t have to get into a car to go every place in your life besides home.”

If Walk Score is so useful in helping people decide where to live, then it can also help us determine how much they value walkability. Now that it has been around for a few years, some resourceful economists have had the opportunity to study the relationship between Walk Score and real estate value, and they have put a price on it: five hundred to three thousand dollars per point.

In his white paper for CEOs for Cities, “Walking the Walk: How Walkability Raises Home Values in U.S. Cities,” Joe Cortright looked at data for ninety thousand distinct home sales in fifteen markets nationwide, places like Chicago, Dallas, and Jacksonville. After controlling for all other factors that are known to impact house price, he found a clear positive correlation in all but two of those markets. In a typical example, Charlotte, North Carolina, Cortright found that an increase in Walk Score from the metropolitan average of 54 (somewhat walkable) to 71 (very walkable) correlated with an increase in average house price from $280,000 to $314,000.17 That’s two thousand dollars per point, or two hundred thousand dollars across the full scale. Interestingly, two hundred thousand dollars is about the minimum price you can pay for an empty buildable lot in the more walkable parts of Washington, D.C.

Of course, it’s generally useful to back up the data by asking real humans what they want. The market-research firm Belden Russonello & Stewart polled several thousand American adults for the National Association of Realtors, and found the following: “When selecting a community, nearly half of the public (47 percent) would prefer to live in a city or a suburban neighborhood with a mix of houses, shops, and businesses.… Only one in ten say they would prefer a suburban neighborhood with houses only.”18 Given that the vast majority of the American built environment is currently the latter, it is no surprise that the demand for walkable urbanism already outpaces the supply. This disparity is only going to get bigger.

THE WALKABILITY DIVIDEND

In 2007, Joe Cortright, the fellow responsible for the Walk Score value study cited above, published a report called “Portland’s Green Dividend,” in which he asked the question: What does Portland get for being walkable? Quite a lot, it turns out.

To set the stage, we should describe what makes Portland different. Clearly, it is not Manhattan. It is not particularly big or particularly small and its residential density, by American standards, is pretty normal. It has attracted a good amount of industry lately, but has shown no great historical predisposition to do so, nor is it gifted with mineral wealth. It rains a lot in Portland and, interestingly, locals pride themselves on not using umbrellas. Perhaps most fascinating is the way that Portlanders refuse to disobey DON’T WALK signs, even if it’s 1:00 a.m. on a tiny two-lane street swathed in utter silence … and even if a blithe east-coaster is striding happily into the intersection (I’m not naming names here).

But what really makes Portland unusual is how it has chosen to grow. While most American cities were building more highways, Portland invested in transit and biking. While most cities were reaming out their roadways to speed traffic, Portland implemented a Skinny Streets program. While most American cities were amassing a spare tire of undifferentiated sprawl, Portland instituted an urban growth boundary. These efforts and others like them, over several decades—a blink of the eye in planner time—have changed the way that Portlanders live.

This change is not dramatic—were it not for the roving hordes of bicyclists, it might be invisible—but it is significant. While almost every other American city has seen its residents drive farther and farther every year and spend more and more of their time stuck in traffic, Portland’s vehicle miles traveled per person peaked in 1996. Now, compared to other major metropolitan areas, Portlanders on average drive 20 percent less.19

Small change? Not really: according to Cortright, this 20 percent (four miles per citizen per day) adds up to $1.1 billion of savings each year, which equals fully 1.5 percent of all personal income earned in the region. And that number ignores time not wasted in traffic: peak travel times have actually fallen from 54 minutes per day to 43 minutes per day.20 Cortright calculates this improvement at another $1.5 billion. Add those two dollar amounts together and you’re talking real money.

What happens to these savings? Portland is reputed to have the most independent bookstores per capita and the most roof racks per capita. The city is also said to have the most strip clubs per capita. These claims are all exaggerations, but they reflect a documented above-average consumption of recreation of all kinds. Portland has more restaurants per capita than all other large cities except Seattle and San Francisco. Oregonians also spend considerably more than most Americans on alcohol,21 which could be a good thing or a bad thing, but in any case makes you glad they are driving less.

More significantly, whatever they are used for, these savings are more likely to stay local than if spent on driving. Almost 85 percent of money expended on cars and gas leaves the local economy22—much of it, of course, bound for the pockets of Middle Eastern princes. A significant amount of the money saved probably goes into housing, since that is a national tendency: families that spend less on transportation spend more on their homes,23 which is, of course, about as local as it gets.

The housing and driving connection is an important one, and has been the subject of much recent study, especially since transportation costs have skyrocketed. While transportation used to absorb only one-tenth of a typical family’s budget (1960), it now consumes more than one in five dollars spent. All told, the average American family now spends about $14,000 per year driving multiple cars.24 By this measure, this family works from January 1 until April 13 just to pay for its cars. Remarkably, the typical “working” family, with an income of $20,000 to $50,000, pays more for transportation than for housing.25

This circumstance exists because the typical American working family now lives in suburbia, where the practice of drive-’til-you-qualify reigns supreme. Families of limited means move farther and farther away from city centers in order to find housing that is cheap enough to meet bank lending requirements. Unfortunately, in doing so, they often find that driving costs outweigh any housing savings.26 This phenomenon was documented in 2006, when gasoline averaged $2.86 per gallon. At that time, households in the auto zone were devoting roughly a quarter of their income to transportation, while those in walkable neighborhoods spent well under half that amount.27

No surprise, then, that as gasoline broke $4.00 per gallon and the housing bubble burst, the epicenter of foreclosures occurred at the urban periphery, “places that required families to have a fleet of cars in order to participate in society, draining their mortgage carrying capacity,” as Chris Leinberger notes. “Housing prices on the fringe tended to drop at twice the metropolitan average while walkable urban housing tended to maintain [its] value and [is] coming back nicely in selected markets today.”28 Not only have city centers fared better than suburbs, but walkable cities have fared better than drivable ones. Catherine Lutz and Anne Lutz Fernandez note that “the cities with the largest drops in housing value (such as Las Vegas, down 37 percent) have been the most car-dependent, and the few cities with housing prices gains … have good transit alternatives.”29

This is bad news for Orlando and Reno, but it’s good news for Portland … and also for Washington, D.C., which continues to benefit from earlier investments in transit. From 2005 to 2009, as the District’s population grew by 15,862 people, car registrations fell by almost 15,000 vehicles. The National Building Museum, in its Intelligent Cities Initiative, notes that this reduction in auto use results in as much as $127,275,000 being retained in the local economy each year.¦

Those are the economic benefits of not driving. Are there additional economic benefits of walking, biking, and taking transit instead? The evidence here is a little more scarce, but the indications are positive. Ignoring the health benefits, there is a clear distinction to be made in the category of job creation. Road and highway work, with its big machines and small crews, is notoriously bad at increasing employment. In contrast, the construction of transit, bikeways, and sidewalks performs 60 percent to 100 percent better. A study of President Obama’s American Recovery and Reinvestment Act documented a 70 percent employment premium for transit over highways. By this measure, that job-creation program would have created fifty-eight thousand more jobs if its road-building funds had gone to transit instead.

How does this translate at the local level? Portland has spent roughly $65 million on bicycle facilities over the past several decades. That is not a lot of money by infrastructure standards—it cost more than $140 million to rebuild just one of the city’s freeway interchanges.30 Yet, in addition to helping to boost the number of bicyclists from near normal to fifteen times the national average, this investment can be expected to have created close to nine hundred jobs, about four hundred more than would have come from spending it on road building.

But the real Portland story is neither its transportation savings nor its bikeway employment, but something else: young, smart people are moving to Portland in droves. According to Cortright and coauthor Carol Coletta, “Over the decade of the 1990s, the number of college-educated 25 to 34 year-olds increased 50 percent in the Portland metropolitan area—five times faster than in the nation as a whole, with the fastest increase in this age group being recorded in the city’s close-in neighborhoods.”¦ There is another kind of walkability dividend, aside from resources saved and resources reinvested: resources attracted by being a place where people want to live. This has certainly been the case in San Francisco, where headhunters for companies like Yelp and Zynga (the social-gaming developers who created FarmVille) actively use urbanism as a recruiting tool. “We’re able to attract creative and tech talent because we are in the city,” acknowledges Colleen McCreary, Zynga’s head of human resources.31

Ultimately, though, it would seem that urban productivity has even deeper causes. There is mounting evidence that dense, walkable cities generate wealth by sheer virtue of the propinquity that they offer. This is a concept that is both stunningly obvious—cities exist, after all, because people benefit from coming together—and tantalizingly challenging to prove. This hasn’t kept it from the lips of some of our leading thinkers, including Stewart Brand, Edward Glaeser, David Brooks, and Malcolm Gladwell.

Speaking at the Aspen Institute, David Brooks pointed out how most U.S. patent applications, when they list similar patents that influenced them, point to other innovators located less than twenty-five miles away. He also mentioned a recent experiment at the University of Michigan, where “researchers brought groups of people together face to face and asked them to play a difficult cooperation game. Then they organized other groups and had them communicate electronically. The face-to-face groups thrived. The electronic groups fractured and struggled.”32

Face-to-face collaboration is, of course, possible in any setting. But it is easier in a walkable city. Susan Zeilinski, managing director of the University of Michigan’s SMART Center, puts it this way: “In Europe you can get five good meetings done in a day. In Australia, maybe three, and in Atlanta, maybe two, because you’ve gone way, way farther and way, way faster but you haven’t been in an accessible place that allows a lot to happen. You’ve spent a lot of time sitting in traffic.”33 This discussion raises a larger theoretical question that scientists have just begun to take on: are there underlying universal rules that govern the success of a place?

The theoretical physicists Geoffrey West and Luis Bettencourt believe so. They do not believe in urban theory—“a field without principles”—they are interested only in math. “What the data clearly shows,” West notes, “is that when people come together they become much more productive.”34 Do the same physical laws work in reverse? Writing about West’s research in The New York Times Magazine, Jonah Lehrer notes:

In recent decades, though, many of the fastest-growing cities in America, like Phoenix and Riverside, Calif., have given us a very different urban model. These places have traded away public spaces for affordable single-family homes, attracting working-class families who want their own white picket fences. West and Bettencourt point out, however, that cheap suburban comforts are associated with poor performance on a variety of urban metrics. Phoenix, for instance, has been characterized by below-average levels of income and innovation (as measured by the production of patents) for the last 40 years.35

These findings align with a recent Environmental Protection Agency study that found, state by state, an inverse relationship between vehicle travel and productivity: the more miles that people in a given state drive, the weaker it performs economically. Apparently, the data are beginning to support the city planners’ bold contention that time wasted in traffic is unproductive.

In contrast, the Portland metro area is now home to more than twelve hundred technology companies. Like Seattle and San Francisco, it is one of the places where educated millennials are heading in disproportionate numbers. This phenomenon is what the demographer William Frey has in mind when he says: “A new image of urban America is in the making. What used to be white flight to the suburbs is turning into ‘bright flight’ to cities that have become magnets for aspiring young adults who see access to knowledge-based jobs, public transportation and a new city ambiance as an attraction.”36

The conventional wisdom used to be that creating a strong economy came first, and that increased population and a higher quality of life would follow. The converse now seems more likely: creating a higher quality of life is the first step to attracting new residents and jobs. This is why Chris Leinberger believes that “all the fancy economic development strategies, such as developing a biomedical cluster, an aerospace cluster, or whatever the current economic development ‘flavor of the month’ might be, do not hold a candle to the power of a great walkable urban place.”37

Copyright © 2012 by Jeff Speck