Latest posts by Gea Elika (see all)
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Home to more than 8 million people, New York City is a bustling metropolis full of fast walkers crowding the city sidewalks. With more millennials preferring to live in urban centers where they’re able to walk to work and stores, it’s no surprise that ‘walkability’ is affecting real estate prices in the Big Apple — both residentially and commercially. Add one of the best public transportation systems in the country to the mix, and you have a walker’s heaven.
Results in a Greater Economic Value Per Square Foot
Cities like Washington D.C., Boston, Chicago, San Francisco, and — of course — New York rank among the top when it comes to walkable urbanism. These top ranking Metropolitans have an average 38 percent higher GDP per capita when compared to low ranking Metropolitans. Office spaces in these cities also rent at a 74 percent higher premium per square foot when compared to drivable suburban areas. New York City’s creation and support of walkable neighborhoods have led it to thrive within the new economic and demographic realities American cities now face.
Bridges the Gap Between “City” and “Suburban” Real Estate
New York City ranks second behind Washington D.C. on the most walkable cities in the U.S. list. That’s because 89 percent of the walkable urbanism is within the city center and nearly all lies in Manhattan. Since Manhattan only accounts for 8 percent of the city’s population, the best development opportunities in NYC lie in its suburban neighborhoods. Urbanizing New York City’s suburbs won’t only bridge the gap between city and suburban real estate, but it’ll also drive real estate prices up in the process because of how attractive those neighborhoods would be.
Drives Real Estate Prices Up
Studies show that home values have bounced back higher and faster in walkable neighborhoods than in drivable ones. That’s because housing in walkable neighborhoods is the most expensive real estate in the U.S. Depending on the market, those prices can range from 40 to 200 percent higher than in drivable neighborhoods. Although that relationship didn’t exist 25 years ago because walkable cities weren’t valued, today it’s a major factor in determining and driving real estate prices. This trend will likely continue as more millennials flock to urban areas.
Final Thoughts and Figures
A higher walkability index not only results in higher real estate values, but also more income per capital and higher educational attainment. New York City currently boasts a $59,400 metro GDP per capita with 37 percent of the population 25 and older having a bachelor’s degree. All of these factors contribute to how real estate prices fluctuate in certain neighborhoods of the city. Although New York City’s real estate market has been notoriously expensive because of high demand, its walkable neighborhoods do have an impact on those housing prices.
There’s no telling how the New York City real estate market will look 20, 10, or even five years down the line as it urbanizes suburban neighborhoods and people spread out more. Only time will tell how high or low those prices go.