Active open spaces, including pedestrian and bike routes that link to jobs, homes, and community destinations, play a key role in the creation of sustainable, healthy places. By integrating aesthetics, recreation, and green infrastructure, these multifunctional landscapes produce economic efficiencies and boost consumer appeal, especially for the rising demographic of empty nesters, generation Y, and people who value physical activity as part of a healthy lifestyle.
According to a July 2013 survey of a cross section of ULI members, active open space also represents a top priority for real estate. Survey respondents ranked “active transportation” highest among ways to link health and the built environment. “Active parks, trails, and complete streets that serve pedestrians, bicycles, and transit riders as well as motorists also figure in numerous recommendations in ULI’s recent report, Intersections: Health and the Built Environment.
In the trend toward building healthy places, however, how can real estate decision makers assess the value of open-space elements or measure their effects on health? A review of research and case studies, including communities, urban districts, and workplaces, provides a more robust understanding of the return on investment (ROI) for developers, city officials, planners, and designers.
Last May, the National Academy of Sciences’ Institute of Medicine released recommendations designed to curb soaring obesity rates. Its first recommendation: “Make physical activity an integral and routine part of life.” Deborah Lou, a PhD in sociology and a program analyst with Active Living Research, a San Diego–based organization devoted to evidence-based advocacy to prevent childhood obesity and create active communities, points out how a lack of sidewalks and other barriers to walking contribute to low activity levels. “Only one in five American adults meets overall physical activity guidelines,” she says. “We need to make walking the easiest, most desirable option in our daily lives.”
Dr. Richard J. Jackson reinforced this message at ULI’s 2013 Spring Meeting in San Diego. “We now know that developers can be more effective in achieving public health than the doctors in white coats,” said Jackson, who is the Joan H. Tisch distinguished fellow in public health at the Hunter College CUNY Roosevelt House Public Policy Institute. “Too often, especially since World War II, we’ve put the car in the middle of the equation for everything we’ve built,” he said. “We need to ask: What makes people happy and healthy?”
What better way is there to achieve this than by putting active transportation options right outside consumers’ front door? In December 2012, the American Institute of Architects (AIA) assessed 12 studies that compared the behavior of residents in car-centric areas with that of residents in urban mixed-use communities. Those in livable urban communities were found to be, on average, 160 percent more physically active than those reliant on cars. It was further revealed that a man of average height weighed ten pounds (4.5 kg) less if he lived in a walkable community, while a woman in that same community weighed an average of six pounds (2.7 kg) less. “Designing communities for positive health outcomes pays dividends across the spectrum for individuals, business, and society at large,” the AIA report concluded.
The American Journal of Preventive Medicine similarly reports that people who live in neighborhoods with trails, greenways, and parks are twice as healthy as those who live in neighborhoods without such facilities. And according to the Centers for Disease Control and Prevention, people living in walkable neighborhoods get about 35 to 45 more minutes of moderate-intensity physical activity per week and are substantially less likely to be overweight or obese than people of similar socioeconomic status living in neighborhoods that are not walkable.
The Bottom Line
These statistics and others prove that thoughtful urban planning and community design can improve public health—but what about the economic health of developers who build these projects?
Consider that in the 2013 Community Preference Survey, released last October by the Chicago-based National Association of Realtors, 60 percent of respondents said they favored a neighborhood with a mix of houses, stores, and other businesses that could be accessed via walking, compared with 35 percent who said they preferred to drive to such places. In addition, 69 percent of respondents said that being within an easy walk of “other places and things in the community” was “very or somewhat important.”
In October, researchers at the Mercatus Center at George Mason University found that Americans are willing to pay an additional $850 for a house per one additional point on WalkScore.com, a website that ranks the walkability of neighborhoods on a scale of one to 100. According to the AIA, investments in a community’s walkability typically increase land value by 70 to 300 percent. Furthermore, studies of 15 major metropolitan markets cited by the AIA revealed that neighborhoods with an above-average walk score command a premium ranging from about $4,000 to $34,000 in real estate transactions.
From the standpoint of infrastructure investment, active open spaces are statistically proven to deliver an excellent ROI, often supplying far more in benefits than they cost to construct. These benefits accrue to public investments as well as to private development. According to a study from the University of Texas at Arlington, the $15 million redevelopment of Houston’s Buffalo Bayou Promenade led to a fourfold increase in the number of businesses in the area and boosted retail sales from $10.46 million to $57.28 million. Designed by my landscape architecture and urban planning firm SWA Group and completed in 2006, the project transformed a trash-littered drainage area into a multipurpose greenway with hiking and bike trails, public art, lighting, and flood control. The 2013 study revealed that the bayou’s restoration increased outdoor activity for 88 percent of the survey respondents by providing space for cycling, jogging/running, and other activities. For 66 percent of respondents, the park creates a feeling of safety and security primarily through the lighting design, visibility, and the planting scheme. The Buffalo Bayou Promenade has won several honors, including a ULI Award for Excellence–Americas finalist in 2007 and an American Planning Association Great Places award in 2012.
Research by North Carolina’s department of transportation found that the state’s cycling infrastructure cost only $6.7 million, but had an economic impact of $60 million. And a study of Maryland’s Northern Central Railroad Trail showed that the state received $303,000 a year in trail-related tax income, compared with management and maintenance costs of just $192,000 a year.
Contributing to this ROI is the fact that these spaces serve multiple purposes. Trail systems not only provide opportunities for recreation but also support multipurpose green infrastructure for transportation, stormwater, utility corridors, and natural habitat that enhances a project’s appeal.
Designing for Activity
New communities provide useful case studies for assessing these long-term benefits. At the Pinehills in Plymouth, Massachusetts, designed by Sasaki Associates of Watertown, Massachusetts, more than ten miles (16 km) of walking trails link clustered neighborhoods to a village center with a fresh food market, shops, a post office, and restaurants, including one with a farm-to-table menu. “Our trails are by far the most popular activity,” says Tony Green, the Pinehills’ managing partner. “They appeal to all ages, with commuters, families, and empty nesters whose kids and grandkids love walking to the Village Green for ice cream or to kick a soccer ball around.” In 2008, the developer invested in a 14,000-square-foot (1,300 sq m), $6 million market offering local farm produce, a full-service butcher, and restaurant-quality prepared food. “We attracted new builders during the worst of the recession, and our home sales remained steady,” he says. “This year, home sales are up by 40 percent, and average home prices are now 50 percent higher than elsewhere in Plymouth.”
In south Orange County, California, SWA is working at the master-planned community of Rancho Mission Viejo, where a comprehensive emphasis on walkable neighborhoods, active and passive park areas, pools, community gardens, local retail and business areas, and hiking trails has distinguished each phase of development. Paul Johnson, senior vice president of Rancho Mission Viejo, says a qualitative assessment of such elements showed that they were worth a 6 percent increase in the value of the homes. “Rancho Mission Viejo’s multiuse active open spaces provided a nice alternative to constructing a single-use golf course,” he says. (Read more about Rancho Mission Viejo in the May/June 2013 issue of Urban Land, page 92.)
Rancho Mission Viejo also has embarked on an ambitious RanchLife initiative, or “lifestyle programming” to engage residents with a broad array of fitness options from the more commonplace jogging, swimming, and tennis facilities to horseback riding, bird watching, paddle boarding, or camping at nearby wilderness parks. Programming is integral to upcoming plans for 14,000 homes and up to 5 million square feet (460,000 sq m) of nonresidential uses, including shops, restaurants, and employment. The project’s first village, Sendero (which means “path” in Spanish), opened in June 2013 with a host of spaces geared toward physical activity. The project’s 1,000-acre (405 ha) second village, currently in planning by SWA, will feature an extensive trail system linking retail uses, a school, a daycare center, parks, a community center, an interpretive center, and a vast network of surrounding canyons and regional trails.
In the international arena, the new urban community of Miasteczko Wilanów in Warsaw, Poland, designed by APA Kurylowicz & Associates and Grupa 5, has received numerous awards, including ULI’s 2010 Global Award for Excellence, for its innovative approach including multifunctional streets that incorporate transportation, social space, drainage canals, equestrian and bicycle trails, and exercise stations. “People dress up to walk in the great European tradition,” says Guy Perry, president of Switzerland-based IN-VI Investment Vision + Environments, a design and development services company. “We are the densest place in Warsaw with the lowest crime rate, because everyone is watching the street.” Perry points out that the project, which he says is Europe’s largest new development this century, is realizing quick sales and 25 percent higher values than elsewhere in the city. “We’re also tracking low incidence of cancer and childhood obesity among our residents,” Perry points out. “And we’re seeing more babies, which is something to celebrate given Poland’s low fertility rate. We believe it’s because our residents are healthy and relaxed.”
Access to active open spaces also bolsters the bottom line within developed urban areas. One compelling example is the SWA-designed Katy Trail in Dallas, a 3.5-mile (5.6 km) pedestrian and bicycle trail system that links about 20 neighborhood areas to the edge of the city’s central business district, the American Airlines Center events complex, and neighborhoods near Southern Methodist University.
“Dallas is becoming so densely populated that people are craving green spaces that are easily accessible and safe,” says Robin Baldock, executive director at the nonprofit Friends of the Katy Trail. “The trail is located in one of the most urbanized areas in Dallas, and we have found that people have chosen to move to the area specifically to be near it.” Access to the trail, which serves some 15,000 people each week, is so coveted that Matt Segrest, president of Dallas apartment developer Alamo Manhattan, was quoted in the Dallas Morning News as saying that homes along the trail are like “oceanfront property for Dallas.” The numbers bear this out: Between 2001 and 2011, about $750 million in development was completed within a quarter-mile (0.4 km) of the trail, while homes in the same area saw a 20 percent increase in value.
In 2011, two University of Cincinnati researchers found that homeowners were willing to pay a $9,000 premium to be located 1,000 feet (305 m) closer to Cleveland’s Little Miami Scenic Trail. The 78-mile (126 km) project of the Ohio Department of Natural Resources incorporates 12 communities and links homes to nearby shops and restaurants. In Indianapolis, a 2004 study of the Monon Trail—a converted rail corridor designed by DLZ Architects linking urban commercial districts, schools, parks, state fairgrounds, and residential neighborhoods—similarly tied trail proximity to higher property values. Homes located within a half-mile (0.8 km) of the trail commanded a sales premium of $13,059; when applied to all 8,862 homes located near the trail, that translated to a total increase of $115.7 million in property values. Greg Lindsey, a professor at the University of Minnesota’s Humphrey School of Public Affairs who studied the Monon Trail, says that the trail also passed the benefit-cost test. “Its value was much higher than the cost,” he says.
Increasingly, workplaces are focusing on consumer health and happiness. As square footage per employee decreases, shared space becomes more critical. In Seattle, Vulcan Real Estate’s South Lake Union campus incorporates outdoor seating and public art to entice people into active transportation and breaks during the workday. At the Hercules Campus at Playa Vista, California, the Ratkovich Company is attracting creative industries to a campus offering outdoor showers, barbecue pits, and trail connections to adjacent parks. “It’s all about the open space,” says Clare De Briere, chief executive officer of the firm, who cites 20 percent higher rental rates and 33 percent faster leasing than projected.
Google has been instrumental in this move to healthier workspaces. “We want to create the healthiest work environments possible where Googlers can thrive and innovate,” says Anthony Ravitz, green team leader in Google’s Real Estate & Workplace Services group. “From concept through design, construction, and operations, we create buildings that function like living and breathing systems by optimizing access to nature, clean air, and daylight.”
Google can be cited as one of the earliest companies to encourage active open space, walkability, and bike-friendliness through the example of its world headquarters, the Googleplex in Mountain View, California. Starting with the former SGI headquarters it purchased in part for its indoor/outdoor building design, Google has continued expanding its campus within the lower-density framework of local zoning while also supporting the trend toward mixed-use urban-style environments that eschew autos. Now spread across dozens of buildings connected by paths and green space, Google employees walk and bike to meetings and to and from home, if they live nearby.
Just as urban parks have proved to provide powerful economic benefits, it’s clear that accessible, well-designed active open spaces are boosting property values and delivering a sound return on investment. Increasingly, the landscapes of communities, cities, and workplaces will need to address multiple goals for transportation, community gatherings, urban agriculture, habitat, aesthetics, and respite from an increasingly digital world.
These initiatives and others not only influence physical and economic health, but also provide intangible but powerful social benefits. “If you go out on a trail, you will see an amazing cross section of people,” says Eric Oberg, manager of trail development for the Rails-to-Trails Conservancy, a nonprofit advocacy group based in Washington, D.C. “On trails, you have that human interaction, and it makes people realize we’re not that different. Trails help create community. And that’s something we’ve lost over the past 50-plus years.”
It’s easy to imagine a more interconnected system of activity, exercise, and transportation that helps people lead healthier, happier lives—all while providing a powerful economic upside.
Elizabeth Shreeve is a principal in SWA’s Sausalito, California, office. She is the program chair for ULI’s Sustainable Development Council and served as a member of the Institute’s Advisory Services panel in Denver’s Westwood neighborhood for the Colorado Health Foundation.