Washington, DC and Boston – Metropolitan Boston is poised to be one of the most walkable metro areas in the country, according to a new report released by the Center for Real Estate and Urban Analysis at the George Washington University School of Business, and the Northeastern University Dukakis Center for Urban and Regional Policy, with the assistance of the Metropolitan Area Planning Council (MAPC). This research was done in conjunction with LOCUS: Responsible Real Estate Developers and Investors, a program of Smart Growth America, and Cushman and Wakefield, a Leading Global Real Estate Advisor.
As shown by substantial and increasing real estate valuation premiums in all real estate product types (office, hotel, rental apartment, retail, and for-sale residential), the report found strong and growing signs of pent-up demand for walkable urban neighborhoods in the Boston area. This marks a reversal in real estate development that has long followed the drivable suburban model.
The report, The WalkUP Wake-Up Call: Boston, which is the first of its kind, analyzes and defines the different forms and economic use of all land use across Metro Boston. The study identifies 57 regionally significant walkable urban places (or “WalkUPs”) in metro Boston. Much of the commercial real estate development in the recent real estate cycle was built in these WalkUPs, which account for just 6% of the total land area in the Boston metro region. The report ranks WalkUPs by economic performance, measured by the real estate valuations for each product type and the fiscal revenues generated for local governments, and by social equity performance, measured by accessibility, opportunity, and affordability for residents. Lastly, the report identifies emerging and potential WalkUPs where new development could go.
“This analysis validates the shift towards walkable urban development that we’ve seen across the country,” said Chris Leinberger, president of LOCUS, the Charles Bendit Distinguished Scholar and Research Professor at GW, chair of the Center for Real Estate and Urban Analysis, and a co-author of the report. “This change will reshape the way we approach urban design and planning, regulation, financing, and construction nationwide. The findings will play a critical role in the guessing game of where developers and investors should be looking in the future.”
“It’s clear from this research that reliable and efficient transit service is vital to the success of walkable urban places, which are largely clustered around MBTA stations both in the rapid-transit served core and on the outer reaches of the commuter rail,” said Barry Bluestone, director of the Dukakis Center at Northeastern University. “In order to realize the private market investment in these walkable urban places, we are going to have to improve capacity and resiliency of the MBTA.”
“This research demonstrates there is growing interest in the type of walkable, mixed-use development called for in our regional plan MetroFuture,” said Marc Draisen, executive director of MAPC, “but as property values increase, we face the critical challenge of preserving and expanding the supply of housing affordable to working class households, so that they too can benefit from all the amenities and opportunities these neighborhoods have to offer.”
The 57 WalkUPs are ranked with platinum, gold, silver, or copper ratings on both economic and social equity metrics. On the economic side, high-ranking places were found to be mostly located inside Route 128 and have access to rail transit service, with low-ranking WalkUPs located in outlying areas. Platinum-level WalkUPs include Back Bay, MIT/Kendall Square, Beacon Hill, and Downtown Boston. At the other end of the spectrum, on the copper level, are Downtown Beverly, Framingham, Haverhill, and Norwood.
Real estate values in WalkUPs are 37% higher across all product types than drivable sub-urban development. Walkable urban office and hotel have 134% and 120% valuation premiums, respectively, over drivable sub-urban development. Plus, walkable urban office absorption has over a 50% market share in this real estate cycle and over 80% of new hotel absorption has been in walkable urban places in this cycle.
Public revenues from walkable urban development are substantially higher than drivable sub-urban development. On a per acre basis, walkable urban development generates 12 times the tax revenues as drivable sub-urban.
The WalkUPs are also ranked on a unique social equity performance metric, measured by accessibility/opportunity and affordability. Places such as Arlington, Charlestown, and Northeastern/Huntington, rose to the top with platinum social equity ratings indicating they offer a mix of both moderately priced housing and easy access to employment and labor. Areas such as Downtown Gloucester, Dudley Square, Brockton, and Lowell received copper rankings. High rankings on the social equity scale were found to be areas that offer high levels of accessibility, lower transportation costs, and great opportunities in terms of proximity to employment.
The report calls for a conscious social equity/affordable housing strategy for WalkUPs to address the short- and mid-term issue of displacement and need for mixed-income neighborhoods. In the long term, increased supply of walkable urban development, especially housing, is required to address the large price premiums of walkable urban places.
To see the full list of land use types, as well as the list of WalkUP economic and social equity rankings, download the report at http://www.locusdevelopers.org/walkup-boston.
The WalkUP Wake-Up Call: Boston was to be unveiled in Boston at LOCUS’s first-ever New England Leadership Summit: Closing the Next [Smart Growth] Deal on March 11. At the Summit, Regional Leadership Awards were presented to HYM Investment Group, LLC, and Alex Twining, CEO of Twining Properties, two real estate developers or investors who have demonstrated exemplary commitment to public leadership and development for walkable, sustainable development. To find out more information about the 2015 LOCUS New England Leadership Summit and the Regional Leadership Award recipients, visit www.locusdevelopers.org/leadership-summit.