Economic Urbanism

The urban core is a huge part of the economy for cities and towns around the world and a piece of the pie that we are not getting in Phoenix.  Walkable communities are becoming big business and as we look towards Phoenix’s future, it is in our best interest to assess the financial benefit to the city that walkability could bring.  There are several elements that add to the economy of walkable cities that I’ll introduce in this entry.  “Walkability” and “sense of community“, are not just buzz words any longer.  They are an essential component to what I call economic urbanism.

The first major element of economic urbanism is housing.  Consistently home values have always been higher in places where the cities are walkable.  The Urban Land Institute conducted a study of four pedestrian communities designed within the last 10 years.  What they found was that home-buyers were willing to pay on average $20,000 more for a home in a walkable community even if they do not anticipate walking being their primary source of travel.  Additionally, in a growing number of smaller to medium sized cities, urban condominiums are commanding a premium over comparable suburban and auto-dependent real estate.  According to the Federal Office of Technology Assessment, the estimate for a single house built on the urban fringe requires $10,000 more in public services than one built in the urban core.  This difference is even greater when compared to a multiple housing model.  Phoenix has grown exponentially on the fridges because of affordability and square footage.  This has de-centralized our city and causes us to spread our resources very thin.  Regional and national business leaders say that low-density, discontinuous and automobile-dependent land use patterns can cause higher direct business costs and taxes.  It is in our best interest to concentrate our efforts on forming an urbanized downtown with several housing typologies at a range of prices.  With greater familiarity of the light rail system, there is a culture of recent graduates and young professionals in Phoenix that want an urban lifestyle as they enter the business community and foster an economy of new knowledge-driven products, service-oriented ideas.

A report by Collaborative Economic, a Silicon Valley think tank, studied the relationship between the physical design of communities and dynamic elements of digital oriented industry.  This industry tends to have smaller, decentralized firms, and thrives on land use patterns similar to the towns of early industrial years.  Towns with city centers, corner stores and streetcar suburbs foster human interaction and allow for collaboration and interaction with the public.  This provides a greater knowledge of what public demands are and will be in the future.  Alternatively, close assessment of booming business centers like Silicon Valley and Atlanta demonstrate how an over-dependence on the automobile can inhibit economic development.  As a result, some major firms have become very involved in advocating for pedestrian and transit-friendly development as stated in the National Association of Local Government Environmental Professionals report.   Hewlett Packard halted its planned expansion in Atlanta’s Perimeter Center area, according to the report, because it did not want to subject 1,000 new employees to the area’s serious traffic problems.  This is an eye opener when it comes to attracting new corporate headquarters into downtown Phoenix.  Employers are looking to provide a high quality of life for their employees and for many businesses that means an urban lifestyle.

A workforce that lives and works in an urban area also enjoy reduce commuting costs.  Traffic congestion can add to the cost of commuting by increases fuel consumption, added car damage and cost of maintenance, and more frequent roadway repairs.  The American Highway Users Alliance estimates that commuters waste $1.1 billion a year idling in the Los Angeles region’s four most congested interchanges which result in 197,000 hours and 2 million a day being lost due to traffic congestion.  Walking remains the cheapest form of transportation for the individual but it can also provide a cost cut for the city.  The Southern California region is expected to spend more than a trillion public and private dollars on roads and freeways, including more than $81 billion in public capital investment between 2000 and 2020. Yet, a report by the Southern California Association of Governments projects that those expenditures will result in a 330% increase in rush hour congestion because much of the new growth is expected to occur in outlying areas.  This is something Phoenix has already experienced and is still going through.  The opportunity for avoid very costly infrastructure expansions could lie in creating an urban core in our city’s downtown.

Phoenix has a lot going for it in the form of tourism.  Great weather, large venues, major sporting events, and premier resorts.  However, communities with a walkable downtown make up a big portion of desirable destinations across the country.  Visitors to those cities are interested in experiencing the community life of that place and when visitors and residents alike feel community pride and activity, the city is more likely to be strong economically.  Vermont’s Department of Tourism & Marketing’s official website begins by inviting tourists to the state’s walkable downtown.  Rutland is described as having bookstores that foster community and gathering places for residents and visitors.  Tourists are heading to Vermont to walk and bike in scenic, human scale, compact, pedestrian friendly towns and since marketing itself that way, Vermont has seen economic boom in tourism.  This is an area where Phoenix could make huge strides with our already plentiful destinations.

After the tourists arrive, what will they find?  The streets of downtown should provide enough activity to support our guest’s visits.  Recently a new type of shopping center has emerged called “Lifestyle Centers”.  Retail Market Developers have recently recognized opportunities in walkable shopping centers that offer a “sense of place”.  Lifestyle centers (and “New Town Centers”) are being developed to replicate many of the community or neighborhood shopping experiences offered by downtowns. These new centers try to recreate downtown’s sense of place with small store footprints, multi-story buildings and an open-air environment.  They are built to be pedestrian friendly, convenient and safe. Traditional downtown areas that are walkable already possess what many developers are trying to duplicate. The economic potential of increased sales from the lifestyle segment can be realized in a walkable downtown’s business expansion and recruitment to create an appropriate mix of retail, entertainment and service businesses.   Additionally, a study of London retailers found that making a street more pedestrian can have a major effect on the city’s economy.  People who walk to a town center on average spend 40% more annually than those arriving by car or train.  Fast convenient shops and restaurants that pay to rent sidewalk space for their tables account for a huge taxable base of the city’s economy and activate the city’s sidewalks.

At this time, when the economy is beginning to get its footing again, there is an opportunity for Phoenix to attract new urban development into the city center.  The promotion of urban housing models and pedestrian friendly sidewalks will attract new businesses reduce infrastructure costs and improving the quality of life for phoenix urban-ites.  These examples and others demonstrate that the importance of having a walkable city is more than just providing shade on the streets for pedestrians, its big business.

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