Walkability economics II

Economic benefits of walkability part 2: innovation, upward mobility, and progress

The Incredible Economic Productivity of a Simple Walk, Part II:

GUEST BLOG
Tristan Cleveland

Modern cities depend on one resource more than any other: people. It is in a city’s self interest to make sure its design supports human health, since people living up to their full potential means the city does too. Walkable cities are, furthermore, increasing where talented people want to live, and they foster the kind of random encounters that can lead to new business ideas. For these and other reasons, building for health means building for economic progress.

In my last piece, I wrote on the economic efficiency that results when more trips are made on foot. But building a city where people walk accomplishes more than save money; it drives growth.

Productivity

When people are more physically active they are effectively smarter and are more productive at their job. Kids who get exercise perform better in school. Humans are an endurance animal, evolved for a highly-active lifestyle, and so our brains and bodies rely on at least some level of daily activity to function optimally. No analysis exists, to my knowledge, of what it would mean for an entire city’s performance if its whole population is more active than another, but the impact can’t be small. The healthier the wheat field, the more bread.

Supporting Business

Here is a puzzle: why is it that entrepreneurs regularly start small businesses in downtowns and on main streets, but it is rare to see them do so in highway strip malls? The question deserves its own research, but it is likely related to two advantages of walkable places. First, the more pedestrians see a business while walking, the more sales increase. A new small store or restaurant can’t compete with multinational chains on advertising, but if they can just put a sign out on an already busy street, they can compete with anyone.

Second, people who live or work near a business constitute an inbuilt, loyal customer base. Customers who can conveniently walk or bike to a business spend more over time than those who arrive by car or transit. Competing with a few businesses for nearby residents is more feasible for small firms than competing with every business people could potentially drive to.

Supporting small, local shops is not just a parochial goal. The more small enterprises a city has, the greater its long term economic growth. It takes many small bets today for a few success stories tomorrow. And as argued in the last piece, the more people can walk to meet daily needs, the more efficient the economy overall.

Quality of Life

A busy highway or arterial can reduce the value of surrounding homes by as much as 5 to 12%. Noise is associated with stress, and the louder a street, the less neighbours know each other or interact.

A pedestrian arterial has the opposite impact. Jan Gehl writes, quoting an ancient Icelandic poem: “Man is man’s greatest joy.” His research shows that people consistently choose to walk down lively streets full of people, rather than an empty street. The most popular cafe chairs and park benches are, similarly, the ones oriented towards people mixing, walking, playing, and talking. 

To underline the message, Gehl points out that architectural drawings always contain foot traffic: “The many people depicted in the drawings give projects an aura of happiness and attractiveness, sending the signal that good human qualities are in abundance.” To attract new residents, businesses, and tourists to a city, it is therefore critical to create streets that current residents want to walk in, to make the city feel lively and welcoming.

Reinvestment

In the last piece, I wrote there must be at least 35 people or jobs per hectare for there to be a minimum number of nearby destinations for people to walk to. For walking to become a first pick for transportation, however, the streets themselves have to be designed to feel safe and inviting. Elements that help include transparent windows, wide sidewalks, few blank walls, trees, and ideally, flower boxes, art, benches, games, fountains, etc.

To pay for such investments, it is helpful that any neighbourhood that is sufficiently compact to support walking also happens to be extremely lucrative for government. As this chart shows (from the author's research on Halifax, Nova Scotia), the less a street costs per resident, the more tax revenue the street generates per meter.

When there is less street per person to pay for, it is less of a financial burden to invest more in the quality of the street. And any upgrade that makes a street sufficiently attractive to draw people outdoors will, in the process, become more attractive for anyone to visit. Reinvesting the revenue from compact development into streetscaping is a strategy for systematically making the city more attractive for tourists and potential new residents. Compact growth when combined with reinvestment can, in this way, support self-accelerating growth.

Innovation

The modern economy is highly dependent on a talented workforce, and increasingly, that workforce wants to live in convenient, walkable places. Cities that support walking attract a greater proportion of highly-educated people. At least 500 companies in the United States have, in recent years, changed location to move to places where walking is more convenient, often with the explicit purpose of moving where the talented young workforce wants to live.

When companies in related fields locate near each other, and there are cafes and pubs where employees from different firms can mingle, they are more likely to have valuable chance encounters that can lead to new ideas or businesses. According to Glaeser and Gottlieb, the data seems to suggest that a major component of the economic value of cities is that they help people learn skills faster and accelerate the sharing of ideas. In support of that analysis, Richard Florida and Charlotta Mellander find that a large majority of venture capital funding in the United States today is going to downtowns and walkable suburban communities.

Upward Mobility

In his book, Arrival City, Douglas Saunders shows that in communities that lack commercial space people can walk to, new immigrants are more likely to become trapped in intergenerational poverty. This simple omission deprives people of a place to open their own business, and of shops where they can find a job or buy food within easy, affordable reach of home. Unsurprisingly, welfare recipients who have fewer jobs near home are less likely to find work, a pattern that is particularly true for people who cannot afford a car.

For the increasing number of poor people who must rely on a car to get to work, their well being depends precariously on a fickle machine that can breakdown at any time. One commenter on a personal finance forum describes getting a loan to buy a $7,000 car because his office had moved twenty miles south, and “public transportation isn’t easy.” Then, within a year, the car broke down, and the repair would cost more than the resale value of the car. Despite no longer having the car to get to work, he still had to make monthly $200 payments on the loan. “If I were to sell it for junk, I wouldn't have enough to pay off the loan AND wouldn't be able to get to work. I'm seriously considering quitting my job.” And this poster, unlike others, does not have a family depending on him. If every step up the economic ladder is as fragile as every mechanical component of a car combined, only the very lucky will succeed.

For finding work, a critical factor is having a broad social network. A long daily commute alone in a car can hinder social connections by eating up time that could otherwise be spent in social groups or at events. Lance Freeman finds that by just knowing how many people in a community depend on driving, he can predict the size of their social networks.

Reversing Neighbourhood Displacement

Walkable neighbourhoods are the best place to be poor, offering free, consistent transportation to food, jobs, and services. Unfortunately, we have built far too few of them. Now that wealthy, talented people increasingly want to live where they can enjoy such a convenient life, it is becoming more expensive for poor people to live exactly where they have the most access to services and opportunity. To counter this trend, we must build more convenient, walkable places for everyone.

The Strategy

When a person walks somewhere, they are doing many things at once. Their presence on the street makes it safer and more inviting for others. They are physically healthier and will produce better output for their own goals and at work. They see ads for businesses (street signs) at the precise moment when they are physically able to enter their front door. They take up little space and create no pollution while participating in economic life. They increase their exposure to encounters with others, upping the chance of a connection that may lead to a job, or to sharing an idea that launches a business. All this thanks to being outside, breathing the air, physically taking part in city life.

The strategy for healthy, economic growth should look like this. Create compact nodes around main streets in all communities. Reinvest the high tax revenue that results in making these streets more attractive to walk on. Funnel more of economic life through trips on foot, and enjoy the benefits of a healthier, more connected, more productive population.

The evidence on health and economics is now more than strong enough. Creating complete communities should not be considered just a good idea, but a foundational tool for economic growth, and a bare minimum requirement for all development.

 

Photo credit: Tristan Cleveland
 

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