Stewart Nelson

Ann Arbor, October 10, 2008.  Speaking at the Global Urban Symposium, GUS, on the topic of “Macro-Sustainability and Walkable Urbanism,” Christopher B. Leinberger, University of Michigan professor and noted author of “The Option of Urbanism, Investing in  a New American Dream”  declared that urban sprawl caused by unsustainable real estate practices (“Drive till You Qualify”) and government subsidies through agencies such as Fannie Mae, FHA and the gasoline taxes have been a major factor in the collapse in home prices, the sub-prime crisis and ultimately the global financial meltdown.

Leinberger identified two types of urban environments; Drivable Suburbanism and Walkable Urbanism.  As transportation systems drive development, Drivable Suburbanism (Think Brady Bunch) is automobile centric while Walkable Urbanism (Think Seinfeld and Sex in the City) demands a more balanced transportation plan including readily available public transit and non-motorized transportation.  Consequently, Walkable Urbanism is a much more complex (time and money translate to expensive) problem for cities to solve as the infrastructure and neighborhoods are already established. Making space for increased density creates a need for change which many communities are not ready to accept.  Brian Swett of Boston Properties a development firm in Boston, MA offered a good example when he stated that the newly opened Mandarin Hotel in Boston took 13 years to get through the permit and building process.

Leinberger elaborates on just how bad the housing market can get in an article he authored for Atlantic magazine, entitled “The Next Slum”, March 2008.   Most of the loss of property values will occur in the fringe areas in overdeveloped Drivable Suburban markets such as Las Vegas, Los Angeles, Sacramento and parts of Florida.  Ground Zero in the property value decline will be fringe areas without rail transit and no functional city core. 

The news is not all bad however. As smart cities successfully make the shift to more balanced transportation systems and increased population densities, property values can rapidly increase as buyers are willing to pay a premium for Walkable Urban real estate.  Washington D.C. for instance has transformed a former Low Cost Housing Project into a planned walkable community.  Remarkably, in just five years land values per square foot increased from $10 per square foot in the former rundown crack cocaine neighborhood fraught with all the social decay that is endemic in blighted neighborhoods to a thriving walkable neighborhood with a new major league baseball stadium and a new expanded Metro station.  The entire 97,000 sq foot development (two football fields) was just sold for a $69 million profit for the Metro Authority at land prices that were approaching $712 per sq foot 70 times the original values.   

Conclusion: Walkable Urbanism equal Sustainability equal Profit!