Walkability scores correlate with property value

Currently the score between Vancouver and Toronto stands at 78 to 71. Hockey? Baseball? Neither. Those are the walkability scores in each city from Seattle-based technology company Walk Score.

Walkability Score Walk Score uses a software algorithm to determine how close people are to walkable amenities such as grocery stores, restaurants, parks, schools and more. Matt Lerner, the company’s co-founder and chief technology officer, said the company’s mission is to help people find a great neighbourhood.

“It started with us trying to quantify the old real estate cliché: location, location, location,” Lerner said. “Walk Score is a measure of how close you are to the people and places you love.”

To do that, and earn revenue at the same time, the 10-person firm founded in 2007 licences its data to other real estate sites –  Realtor.ca and RE/MAX are two that make use of Walk Score data, for instance. The company also partners with those same firms to help people find, buy or rent walkable homes, condos and apartments.

In the latter instance, web surfers arrive at walkscore.com looking for an apartment, for example, with a short commute and a good score in a neighbourhood matching their lifestyle. Walk Score connects the prospective tenants with the property managers. Every time a referral comes from Walk Score, the company gets a commission.

Lerner said many commercial real estate listings advertise their walk score – and with good reason; more and more people are looking for amenities close to where the live, according to the 39-year-old software developer.

Millennials looking for different qualities

Lerner contends many millennials – the generation born after 1980 – are looking for very different qualities in their homes and Lerner advises property owners who want to make their listings more desirable to pay attention to the demographic change.

For instance, he points out that living units in buildings are much smaller, but at the same time more affordable; hence the growing trend in micro-condos. At the same time, many of the new developments are multi-use, catering toward convenience. Lerner said one of the newer developments in Seattle features a bike shop on the ground floor.

“One of my favourite quotes that I heard someone say about millennials is a city full of things to do is more fun than a house full of things to make payments on. If you look, a lot of millennials have debt from college. If you’re not a software engineer, the job market can be tough. So people are trying to figure out, ‘how can I afford to live in these expensive, walkable places’,” Lerner said.

Good Walk Score even makes economic sense

As it turns out, a good Walk Score even makes economic sense. Gary Pivo, a professor of urban planning at the University of Arizona, argued in a 2013 research paper that having either a very high or a very low Walk Score significantly affects default risk in multi-family rental housing.

“For lenders and developers, the findings reported here suggest that Walk Score could be used to help evaluate and underwrite properties and investment risk,” Pivo wrote.

Part of the reason for the findings, Lerner said, comes from the 2008 housing bubble when the bottom fell out of the market. When gas spiked to $4 and $5 a gallon, people couldn’t afford their commutes and the suburban homes which once looked affordable suddenly resulted in foreclosures.

Similarly, a study dating back to 2009 said in a typical market an additional one point increase in Walk Score was associated with a between $500 and $3,000 increase in home values.

The study, conducted by Impresa Inc. economist Joe Cortright on behalf of CEOs for Cities, said, “Houses with the above-average levels of walkability command a premium of about $4,000 to $34,000 over houses with just average levels of walkability in the typical metropolitan areas studied.”

Expanding on its original premise, Walk Score has recently added Transit Score and Bike Score, which respectively measure the ease of using either transportation mode and how well a location is served by both.

“Millennials are more interested in being on their smartphones on the bus than they are being in their cars stuck in traffic,” Lerner said.

A multiple award-winning reporter, writer and editor for more than 25 years, Charles Mandel most recently worked as the National Observer's climate change reporter. He is a former Atlantic correspondent…

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A multiple award-winning reporter, writer and editor for more than 25 years, Charles Mandel most recently worked as the National Observer's climate change reporter. He is a former Atlantic correspondent…

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