Current data shows properties with higher walkability translate to:
- Higher home value
- Higher rent for residential and commercial real estate
- Increased value per-square-foot of up to $81.54
Clearly, real estate investors need to understand walkability, both in terms of what it means for individual investments and how it may affect future investment performance.
Here are a few basics to get you started:
Walkability is the measure of how friendly an area is to walking. In discussions about walkability, you will often encounter associated scores for friendliness to biking, transit access, and overall environmental friendliness and sustainability, but walkability deals just with walking.
How is walkability measured?
There are many walk-scoring systems out there. Probably the most common is Walk Score (probably most familiar to investors who use Redfin listings), which has associated Transit and Bike Scores as well. For this scoring system, Walk Score’s team of advisory members developed a system that analyzes hundreds of walking routes to nearby amenities. Points are assigned based on an equation that evaluates:
- Time of the walk
- Distance of the walk
- Pedestrian friendliness of the routes, including road blocks, safety, and traffic patterns.
Note: Other research organizations have developed their own methodologies for scoring walkability.
What do the scores mean?
Walkability is generally assigned a numeric value. The higher the score, the more walkable the area. For example, sticking with the Walk Score model, a score between 90 and 100 would indicate a resident in this area might not even need a car for daily use. Scores in the middle ranges, such as the 50s and 60s, indicate an area is somewhat walkable but some “daily errands” might require a car. Scores below 50 indicate an area is largely car-dependent.
How should I use these scores?
Walkability is increasingly important to today’s homeowner and renter because of the many advantages of living in a walkable area. However, do not rule out a locale simply because it is not a walker’s paradise. Many people will find high bike scores or transit scores an acceptable substitute or even preferable to a high walk score.
Consider the needs of your target market. For example:
- Older residents may need transit options because walking and driving are limited
- Environmentally conscious residents may need good transit or easily walkable employers to avoid driving
- Younger first-time homebuyers tend to place a high value on being able to walk to entertainment, recreation, and dining options
As with all real estate investment considerations, use walkability as one factor among many when evaluating a potential investment and weight it according to the value your target resident will place upon this measure.