Walkability Increases Property Values

July 06, 2011

This will probably not come as a big shock to Chicago residents, but our fare city has been ranked as one of the most walkable in the country.

What might come as a bit of a surprise, however, is that our “walkability” can increase Chicago real estate values.

According to a recent study, “The Walkability Premium in Commercial Real Estate Investments,” the value of apartment buildings, office space and retail stores in a walkable city are higher than those in cities that are not walkable.

people walking around downtown chicagoChicago was among the most walkable cities in the country, along with New York, Boston, San Francisco, Washington D.C. and Philadelphia.

The least walkable were Jacksonville, Nashville, Charlotte, Indianapolis, Oklahoma City, Memphis, Fort Worth, Kansas City, San Antonio, El Paso, Austin and Phoenix.

The report examined the effects of walkability and investment returns on more than 4,200 apartment, office, retail and industrial properties over the past decade.

The study defines walkability as “the degree to which an area with walking distance of a property encourages walking trips from the property to other destinations.”

Gary Pivo and Jeffrey D. Fisher compiled the report using real estate performance information from the National Council of Real Estate Investment Fiduciaries and walkability data from Front Seat.

The data created a Walk Score: On a 100-point scale, a 10-point increase in walkability increases property values by 1 to 9 percent, depending on the property.

Chicago had an overall Walk Score of 74.

The Loop and the Near North Side were the most walkable Chicago neighborhoods with Walk Scores of 96 each; the city’s Riverdale area was the least with a score of 33.

Other local findings:

*62 percent of Chicago residents have a Walk Score of 70 or above.

*95 percent of Chicago neighborhoods have a Walk Score of at least 50.

*Only 5 percent of Chicagoans live in car-dependent neighborhoods.

When looking at the 194 largest cities in Illinois, the average Walk Score came out to 48.

Illinois’ most walkable city is Forest Park with a Walk Score of 82; its least walkable city is Godfrey with a score of 20.

The study’s conclusion: “We hypothesized that walkable properties had incomes and values that were as much or more and produced investment returns as good as or better than less walkable investments.”

Want to see the whole report? Click here.

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