The big picture in transportation and real estate trends is the growth of multiple transportation modes, shared use of bikes and cars, and enormous expansions of bike infrastructure that are driving real estate investments and urban growth, according to experts who spoke at a session of the Spring Meeting in Philadelphia.
“High-quality infrastructure is a key driver of real estate investment,” said moderator Edward T. McMahon, a ULI senior resident fellow. Improving the quality of public transit, roads and bridges, and bike and pedestrian infrastructure is the highest priority for addressing the nation’s estimated $2 trillion transportation infrastructure deficit. “The public’s willingness to pay for infrastructure is a top factor that will shape cities,” he said. “Funding and financing are seen as resting on cooperation.”
McMahon reeled off recent progress in multimodal systems: 14 cities now have heavy rail or subways, and 28 have light rail, which is growing fastest in southwestern cities such as Denver and Dallas. Bus rapid transit has been embraced in 36 cities. All the major car manufacturers are investing in autonomous vehicles. But there is no consensus, said McMahon, on implications for land use planning, roadway design, and mobility response.
“The big change is that cities investing in bike infrastructure are seeing huge increases in bike use,” he said. In 2014, Americans bought more bikes than cars and trucks. America now boasts 1,700 rails-to-trails projects totaling more than 22,000 miles (35,400 km), and the federal government has funded 2,500 bike infrastructure projects. More than 900 cities have Complete Streets policies benefitting all users. Bike-friendly buildings that feature bike amenities such as repair stations, showers and lockers, and community gathering spaces are attracting millennials and others interested in active lifestyles. And now trail-oriented development, such as that along the Midtown Greenway in Minneapolis, is drawing thousands of daily riders and many millions in real estate investments. This is echoed by a recent ULI report, Active Transportation and Real Estate: The Next Frontier.
“Cities investing in bike infrastructure are seeing explosions in bike use” and urban growth, said Roswell “RJ” Eldridge, chief operating officer of Toole Design Group in Silver Spring, Maryland, which specializes in walking and biking infrastructure planning, engineering, and landscape architecture. “Cities are competing regionally for young intelligent people who are very mobile and can move to any community depending on the package of high-quality places with transportation options.”
A third of all Americans now live in the nation’s top-ten-population cities, and 52 percent want to live in a place where they don’t have to rely on cars, Eldridge noted. Fewer vehicle trips are happening, and millennials, in particular, are choosing transportation modes besides driving, affecting how cities are being built. He said mode shift will increase as bike infrastructure advances and more people get out of cars to walk, bike, or take transit for the 43 percent of all trips that are less than three miles (5 km).
Bike parking is “almost an imperative with urban development,” said Eldridge. Cyclists also need convenient access, shelter, and security for their bikes, he said. Development considerations such as rights-of-way, intersection design, protected bike lanes, sidewalks, and vehicle parking should be addressed before starting the project, because “retrofits don’t always work.”
Tim Frisbie, communications and policy director for the Shared-Use Mobility Center in Chicago, said cities are changing from an ownership base to shared mobility that fosters collaboration and extends benefits to all.
“Public transit is the granddaddy,” and other modes—such as shuttles; ride, car, and bike sharing; taxis; micro-transit; and dynamically routed buses—feed into it, said Frisbie. “Integrated mobility hubs for car, bike, transit, car parking, and dropoff are half the battle” in smooth transitions between modes, he added. Other trends include ride-sourcing services for kids and seniors; first/last mile partnerships with transit agencies; electric bike shares for hills, heat, wind, and sprawl; and payment integration of one card and one app for all transportation needs. Cities such as Chicago and Los Angeles are piloting peer-to-peer car rentals to provide more mobility options in low-income communities.
“Uber and Lyft are the gateway drug in mobility sharing,” noted Frisbie. He said mobility sharing reduces reliance on private automobiles, complements public transit, connects jobs and housing, can be accessed quickly, and serves nonwork trips, which constitute 80 percent of all trips. Citing a study he recently completed for the American Public Transportation Association, Frisbie said “supersharers” of transit and shared modes report greater transportation cost savings and own half as many cars as people who use transit alone. The more people use shared mobility, the more likely they are to use transit, spend less on transportation, and not own car.
Driverless cars could unfold in one of two ways, said Frisbie. The utopian scenario of shared vehicles would result in fewer cars, reduced congestion, cleaner air, and better land use. The dystopian scenario of privately owned autonomous vehicles could result in “zero-occupancy cars,” more cars and traffic, and more pollution and sprawl.
In Indianapolis, Milhaus is developing over $1 billion in six mixed-use multifamily projects on or adjacent to trails and bike- and car-share facilities, said Tadd Miller, chief executive officer. A new trail system, which Milhaus helped construct and maintains adjacent to its projects, connects every major neighborhood and part of the city. All the bus lines from Indianapolis’s new transit center connect to the trail. People can walk or bike within minutes to anywhere from downtown, which provides a “competitive advantage” over other cities in a city he described as previously having no transportation options except driving. Miller said he’s an example of a millennial who, even with a wife and two children, lives in the city, does not own a car, and uses shared mobility options like bike and car share and Uber or Lyft “because it makes financial sense and saves time.”
Milhaus’s dense development, averaging 100 units per acre, embodies adjacency and connectivity, said Miller, but “what it comes down to is, what is the financial benefit for developers? I have to convince Goldman Sachs, AIG, and others” that bike racks or shared mobility amenities are affordable and will produce return on investment for the project. What’s new, he said, are “the financial tools you can take to the bank to justify amenities you want to put in your development.” Plus, he said, “There’s nothing better than forcing investment bankers from New York to get on a bike share. By the end of the ride, they’re asking, ‘How do I get bike share where I live and work?’”
“The financial benefit is there, infrastructure is catching up, and incentives for projects are increasing,” he said. “Shared mobility will continue, and in the future we’ll design parking lots and garages that can be converted or built upon.” As an urban-core infill developer, he said, Milhaus builds podium parking to accommodate future loads and conversion and still builds surface parking where possible to provide options. “As developers and planners, we need to be careful in our plans,” he said, “because much of what we do today will be totally demolished or transformed” in the future.
