Communities that invest in mixed-use, walkable downtowns, centers, and neighborhoods provide economic advantages for individuals and businesses, and strengthen their tax base.
Individuals benefit because jobs are created when neighborhoods revitalize and household budgets are improved by rising walkability. Households in drivable suburban neighborhoods spend on average 24 percent of their income on transportation; those in walkable neighborhoods spend half that amount. The difference amounts to $700 billion a year in total, according to Scott Bernstein of the Center for Neighborhood Technology.
Businesses benefit because placemaking is a primary driver of investment, according to Urban Land Institute scholar Edward McMahon. In today's economy, the quality of place is paramount, he says. "Decisions such as where to invest, where to work, where to retire, and where to vacation are all made based on what a community looks like," he explains. "In a world where capital is footloose, if you can't differentiate [your town] from any other, you have no competitive advantage.”
Evidence of “place” value can be found in Walk Score, where real estate broker Redfin found that a one point increase translates to an average $3,000 rise in house value nationwide. Neighborhoods with high Walk Scores correlate with unique character and high quality of life, and feature appealing streets and public spaces.
In studies of large metro areas, “walkable urban places” (WalkUPs) account for a growing percentage of commercial development, according to research by Christopher Leinberger. In DC, WalkUPs attract 48 percent of the area's new office, hotel, and rental apartment square footage. In Atlanta, 27 WalkUPs account for 50 percent of recent commercial development. Increasingly, businesses and jobs are moving to downtowns and mixed-use, walkable centers—both in cities and suburbs.
Compact central business district properties yield 10 times more tax revenue per acre than conventional suburban development, according to Building Better Budgets: A National Examination of the Fiscal Benefits of Smart Growth Development. “When you do the math, it is easy to see that dense downtown development returns a greater investment to the community than putting tax dollars towards sprawl,” says Joe Minicozzi of Urban3, a firm that has analyzed patterns of tax return in metro areas nationwide.