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The economic value of walkable neighborhoods

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Abstract

This study investigated how the benefits of a walkable neighborhood were reflected in the American real estate market by examining the economic values of urban environmental factors supporting walking activities. Property values were used as a proxy measure for economic value and analyzed in relation to land use characteristics that have been known to correlate with walking at the neighborhood scale. Four aspects of the built environment supporting walking were included in the analyses: development density, land use mix, public open space and pedestrian infrastructure. Hedonic models were employed where the property value was regressed on the measures of the four sets of correlates of walking in a neighborhood. Models were estimated for four land use types – single-family residential, rental multi-family residential, commercial and office. The findings did not support previous arguments that increasing density weakens the quality of a neighborhood. To the contrary, the positive association of higher development density with the value of single-family residential properties detected in King County suggested that high development density might increase surrounding property values. The pedestrian infrastructure and land use mix significantly contributed to increases in rental multi-family residential property values. Higher development density with higher street and sidewalk coverage were also favored by retail service uses. In relation to land use mix, mixing retail service uses and rental multi-family residential uses helped make rental housings more attractive.

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Notes

  1. Hedonic model is a regression analysis used to estimate economic values of components that directly affect market prices of an item. It is commonly applied to variations in housing prices that reflect the value of local environmental attributes.

  2. GIS data consist of shape files defining the boundaries of parcels and tables containing information on the land uses and building attributes in the parcels.

  3. The MAUP is a potential source of error that can affect spatial studies, which utilize aggregate data sources (Unwin, 1996).

  4. Spatial autocorrelation refers to the pattern in which observations from nearby locations are more likely to have similar magnitude than by chance alone (Legendre and Fortin, 1989), which introduces deviation from the independent observation assumption of classical statistics.

  5. Moran’s Index is a measure of spatial autocorrelation developed by Patrick A.P. Moran. The values can be transformed to z-scores in which values greater than 1.96 or smaller than −1.96 indicate spatial autocorrelation significant at 0.05 level.

  6. Urban centers, designated by Puget Sound Regional Council (PSRC) as the region’s core of current and future development in Vision 2020, are locations that include a dense mix of business, commercial, residential and cultural activity within a compact area of up to 1.5 square miles.

  7. the cutoff for potential multicollinearity (Myers, 1990).

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Acknowledgements

This work was supported by the Hongik University new faculty research support fund.

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Authors and Affiliations

  1. Department of Urban Design & Planning, Hongik University, Seoul, Korea

    Dong Wook Sohn

  2. Department of Urban Design & Planning, University of Washington, Seattle, USA

    Anne Vernez Moudon

  3. Department of Urban Planning & Engineering, Yonsei University, Seoul, Korea

    Jeasun Lee

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  1. Dong Wook Sohn
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  2. Anne Vernez Moudon
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Correspondence to Dong Wook Sohn.

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Sohn, D., Moudon, A. & Lee, J. The economic value of walkable neighborhoods. Urban Des Int 17, 115–128 (2012). https://doi.org/10.1057/udi.2012.1

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