Tag: Suburban Retrofit

The Great Recession of 2007-2009 triggered the Depression that we appear to be exiting this summer. And it was triggered by the collapse of the Great Turn of the Century Suburban Housing Bubble.

In coming out of the recent Depression, one driver of residential property values, the Cul de Sac, seems to be in conflict with a new driver: walkability. In October 2013, the Realtor(R) Magazine Online, of the National Association of Realtors, wrote, in Neighborhoods: More Walkable, More Desirable that:

Neighborhoods that boast greater walkability tend to have higher resale values in both residential and commercial properties, finds a recent study published in Real Estate Economics. In fact, a 2009 report by CEOs for Cities found that just a one-point increase in a city’s walk score could potentially increase homes’ values by $700 to $3,000.

And Ken Harney, writing for NewHomeSource.com, observes in that:

The core concept – connecting people with where they want to work, play and own a home by creating attractive neighborhood environments that make maximum use of existing transit infrastructure – fits many post-recession households’ needs, regardless of age. Older owners of suburban homes are downsizing into townhouses and condo units close to or in the central city, often in locations near transit lines. Younger buyers, fed up with long commutes to work, want to move to places where they can jump onto mass transit and get off the road.

Many of these buyers also have an eye on economics. For example, Bill Locke, a federal contracts consultant in northern Virginia, said that although owning a LEED-certified townhome near a Metro transit stop “is a really big deal” for himself and his wife, he sees the unit they recently purchased in the Old Town Commons development in Alexandria, Va., as a long-term investment that will grow in value “because it makes so much more sense” than competing, traditional subdivisions farther out from the city.

So, what does this mean for the sustainable transport and for the future of the deadly American Suburban Cul de Sac? Let’s have a chat about it, below the fold.

cross-posted from Voices on the Square

As a member of the WorldWide Transit Cabal (not to be confused with the Secret Worldwide Transit Cabal, since of course their membership is secret, though at times my blogging is as active as there’s), I have long argued that development of sustainable transport will be good for the economy as well as other growing things (to paraphrase the National Lampoon).

Recently, a study by Professor Gary Pivo has been released that demonstrates that this is not just a forward looking statement. Sustainable Transit-Oriented Development is presently good for home values and are associated with lower risk of foreclosure. How good? To quote Ped Shed’s summary of the research results:

The second hypothesis was that default risk was reduced by sustainability features (or conversely, risk was increased by unsustainable features). This also turned out to be true. The effect of the variables was substantial:

1. Commute time: Every 10-minute increase in average commute time increased the risk of default by 45%.
2. Rail commute: Where at least 30% of the residents took a subway or elevated train to work, the risk of default decreased by 64.4%. New York City was omitted from this calculation because it skewed the results.
3. Walk commute: Every increase of 5 percentage points in the percent of residents who walk to work decreased the risk of default by 15%.
4. Retail presence: Where there were at least 16 retail establishments nearby, the risk of default decreased by 34.4%.
5. Affordability: For properties with some units required to be affordable, the risk of default decreased by 61.9%.
6. Freeway presence: Where properties were located within 1,000 feet of a freeway, the risk of default increased by 59%.
7. Park presence: Where properties were located within 1 mile of a protected area, the risk of default decreased by 32.5%.

And this does not seem to be just “fishing for results”: adding these factors to a model used by other researchers, including “characteristics of the loan, property, neighborhood and location, and regional and national economies” improved the accuracy of the model on four measures of goodness of fit.