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I tweeted the above photo on Saturday morning with the following text: "No sidewalks. Towers in the distance. Welcome to the inner suburbs of Toronto." What I, of course, wanted to highlight is the contrast between the rural-like street with no sidewalks in the foreground, and the high-density towers built on top of Kipling subway station in the background. It is a perfect example of the kind of Toronto we are building, by design, all across the city. And it also exemplifies one of our great philosophical divides.
If you look at the responses on Twitter, you'll see that there are a few opinions. Generally speaking, though, there are probably two main ways to think about this scene. One way is to look at the transit-oriented housing and think of it as urban progress. We are adding new housing and we are doing it in a way that hopefully results in more walkable communities. With this in mind, you might now see the three humans on the street (one of which is in a stroller) and think it's a shame that they have been forced to walk on the road.
The other main way to look at this is that not having sidewalks is actually a feature and not a bug (indeed, a lack of sidewalks can be a pretty good indicator for rich people/wealthy households). From this lens, not having sidewalks means uninterrupted driveways (more parking), less through foot traffic, and a more quaint small-town feel. Also with this lens might be a view that the rural-like street was there first, before the transit-oriented towers. And it was doing just fine before people like me drove through their neighborhood and pointed out the lack of sidewalks.
How do you see this scene?
We have spoken before about how walkable urban communities punch above their weight. In the US, only about 1.2% of land is, on average, designed and built for walkability. And yet, walkable neighborhoods in the top 35 metro areas account for about 19.1% of total US real GDP.
At the same time, because walkable communities are a rarified commodity, they usually come at a premium. According to some sources, it's to the tune of 30-40% when you look at home prices and rental rates. This again suggests that humans actually like and want this type of urbanism.
Which is probably why there's a growing interest in building more of it. Here's a recent article from Bloomberg CityLab and here's a photo of Culdesac's new completely car-free community under construction in Tempe, Arizona (this doesn't look like the Arizona I know):
According to this RedFin data from 2019 -- which looked at normalized sale prices and Walk Scores above 50 -- it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.
It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.
But as a whole there is an economic trend here that makes intuitive sense to me. Though it's not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.
When you factor all of these things, maybe "premium" isn't the right way to look at this.
I tweeted the above photo on Saturday morning with the following text: "No sidewalks. Towers in the distance. Welcome to the inner suburbs of Toronto." What I, of course, wanted to highlight is the contrast between the rural-like street with no sidewalks in the foreground, and the high-density towers built on top of Kipling subway station in the background. It is a perfect example of the kind of Toronto we are building, by design, all across the city. And it also exemplifies one of our great philosophical divides.
If you look at the responses on Twitter, you'll see that there are a few opinions. Generally speaking, though, there are probably two main ways to think about this scene. One way is to look at the transit-oriented housing and think of it as urban progress. We are adding new housing and we are doing it in a way that hopefully results in more walkable communities. With this in mind, you might now see the three humans on the street (one of which is in a stroller) and think it's a shame that they have been forced to walk on the road.
The other main way to look at this is that not having sidewalks is actually a feature and not a bug (indeed, a lack of sidewalks can be a pretty good indicator for rich people/wealthy households). From this lens, not having sidewalks means uninterrupted driveways (more parking), less through foot traffic, and a more quaint small-town feel. Also with this lens might be a view that the rural-like street was there first, before the transit-oriented towers. And it was doing just fine before people like me drove through their neighborhood and pointed out the lack of sidewalks.
How do you see this scene?
We have spoken before about how walkable urban communities punch above their weight. In the US, only about 1.2% of land is, on average, designed and built for walkability. And yet, walkable neighborhoods in the top 35 metro areas account for about 19.1% of total US real GDP.
At the same time, because walkable communities are a rarified commodity, they usually come at a premium. According to some sources, it's to the tune of 30-40% when you look at home prices and rental rates. This again suggests that humans actually like and want this type of urbanism.
Which is probably why there's a growing interest in building more of it. Here's a recent article from Bloomberg CityLab and here's a photo of Culdesac's new completely car-free community under construction in Tempe, Arizona (this doesn't look like the Arizona I know):
According to this RedFin data from 2019 -- which looked at normalized sale prices and Walk Scores above 50 -- it is about 23.5% or $77,668 for 16 major US metro areas. Again, this is 2019 data and so things may have changed a bit, especially with the whole COVID thing.
It also varies by metro area in this data set. The premium in Boston, for example, is almost 30%. Whereas the premium in Oakland is actually a slight discount (-1.3%). There are going to be local conditions that play a role.
But as a whole there is an economic trend here that makes intuitive sense to me. Though it's not just a question of how pricey your home is. You also need to consider your transportation costs, the value of your time, and the health benefits of living in an environment that promotes consistent and moderate activity.
When you factor all of these things, maybe "premium" isn't the right way to look at this.
But in addition to just giving people more of what they want, there are also real economic benefits to stripping out parking and to overall more compact development. Charlotte-based Space Craft is another developer focused on car-light and transit-oriented apartments, and they have seemingly managed to make their projects more affordable as a result:
“Our product offered lower rents to residents, $100 to $200 below our competitors, and was the best product in the market because we were able to reinvest some of the savings from parking,” said [Harrison] Tucker, who sees walkable urban neighborhoods becoming their own real estate investment class. “The economic case was just very strong.”
This also flies in the face of the common argument that developers will always profit maximize and charge whatever the market will bear for their spaces. So why even bother trying to make it easier and cheaper to build? But this is not true! Lower development costs, as we see here, can and will translate into lower rents and higher quality buildings.
I also agree with Tucker that we will see walkable urban neighborhoods, and their associated building typologies, become an important real estate asset class. For all of the reasons that we talk about on this blog, this is where our cities are headed.
However, it's going to take some time. I like the metaphor (mentioned in the above article) that, right now, we are creating "walkable archipelagos" or walkable islands in seas of cars. With the right connectivity (transit, micromobility, and so on), these islands can do just fine. But over time, I suspect we'll see a lot more land reclamation. Good.
But in addition to just giving people more of what they want, there are also real economic benefits to stripping out parking and to overall more compact development. Charlotte-based Space Craft is another developer focused on car-light and transit-oriented apartments, and they have seemingly managed to make their projects more affordable as a result:
“Our product offered lower rents to residents, $100 to $200 below our competitors, and was the best product in the market because we were able to reinvest some of the savings from parking,” said [Harrison] Tucker, who sees walkable urban neighborhoods becoming their own real estate investment class. “The economic case was just very strong.”
This also flies in the face of the common argument that developers will always profit maximize and charge whatever the market will bear for their spaces. So why even bother trying to make it easier and cheaper to build? But this is not true! Lower development costs, as we see here, can and will translate into lower rents and higher quality buildings.
I also agree with Tucker that we will see walkable urban neighborhoods, and their associated building typologies, become an important real estate asset class. For all of the reasons that we talk about on this blog, this is where our cities are headed.
However, it's going to take some time. I like the metaphor (mentioned in the above article) that, right now, we are creating "walkable archipelagos" or walkable islands in seas of cars. With the right connectivity (transit, micromobility, and so on), these islands can do just fine. But over time, I suspect we'll see a lot more land reclamation. Good.
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