Walkable neighborhoods could be hedge against next housing bubble

December 4, 2013

 

Last month, the popular website Walkscore released its 2014 walkability rankings, with Central Valley cities garnering mixed results. Overall, Stockton and Modesto both scored less than 50, placing them in the “car-dependent” category.

That is not entirely surprising, given the region’s development patterns over the last 20 years. If you live in the newer subdivisions of either city, you already know that nearly all everyday activities require a car. However, surrounded by these low-scoring subdivisions are older, urban cores with strong Walkscores, indicating that these areas are ripe for revitalization as pedestrian-friendly neighborhoods.

Walkscore measures how walkable any particular address is by measuring its proximity to amenities such as schools, entertainment venues, and restaurants. These points are then extrapolated to entire neighborhoods and cities to determine the best places for walkable living.

This relatively new rating system has become an integral part of the housing market thanks to a shift in consumer demand. Instead of asking about square footage, parking and swimming pools, home buyers and apartment hunters are increasingly more interested in proximity to things like parks and grocery stores. A three-car garage is nice, but can I walk to a coffee shop, or safely bike with my kids to school? As a result, many real estate agents now include a property’s Walkscore in their listings.

Walkscore is not only handy for real estate agents and home buyers, but also has practical (and quantifiable) implications for cities and neighborhoods as a whole. It turns out that higher Walkscores are positively correlated with housing prices—even in the sprawling Central Valley. For example, research released by the organization CEOs for Cities found that a one-point increase in a Stockton property’s Walk score, all else being equal, translated to $795 increase in sales price. That makes a big difference for a house sold in Spanos East (Walkscore: 11) as compared to the same home sold in the neighborhood near University of the Pacific (Walkscore: 64).

In addition to increased property values, walkable neighborhoods are also more resilient from fluctuations in the housing market. Several analyses conducted on housing values of different homes during the recession have found that homes in walkable neighborhoods closer to city cores and transportation hubs were not nearly as hard-hit as their suburban counterparts, and they also experienced quicker rebounds in property values. If Central Valley cities want to increase property values and hedge against future housing bubbles, encouraging revitalization of existing walkable areas is a smart strategy.

It should come as no surprise that the best opportunities for walkability in our region lay in the cores of Stockton and Modesto. The downtowns for both rate very well, even though these areas have yet to reach their full potential. For example, Stockton’s historic but neglected Magnolia neighborhood rates as the city’s most walkable, despite being underdeveloped. While older and beset with crime, that area has a very walkable street grid design with easy access to commercial areas, parks and schools.

As Central Valley cities realize the positive economic benefits of bringing more people into these older, better-planned areas, more businesses will follow, driving up Walkscores and property values in the process.

Walkscore is clearly quite helpful, but it certainly isn’t perfect. While the site measures proximity to amenities, it does not take into account street-level conditions that dictate the actual distance people are willing to walk (e.g.: street composition, building setbacks, parking lots, etc). Moreover, the site’s algorithms do not differentiate between big box stores that are almost universally accessed by car and smaller neighborhood stores that are supported by neighborhood residents.

But despite these issues, Walkscore gives us a good picture of where the best opportunities to create walkable communities exist. While most Central Valley communities will always be car-dependent, we shouldn’t ignore the latent potential of our older, urban areas that can be transformed into desirable, pedestrian-friendly neighborhoods. Thanks to Walkscore, we can easily identify these areas and work to encourage their revitalization.

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