Washburn

Financial Power of Walkable Urban Development

I recently stumbled on an example of the economic power of walkable urban development, which can be sparked by rail transit and appropriate mixed-use zoning. A small Washington Post item in the local news section, buried on page B4, announced the sale of two pieces of land by the Metro transit agency (it could just as easily have been another government agency or for that matter a private party) to real estate developers. The land is located in a formerly very troubled southeast neighborhood, adjacent to the Anacostia River. Five years ago, this neighborhood was home to the worst DC housing project, where hundreds of murders took place during its infamous history, and was the drug dealing center of the region. A creative redevelopment plan, removal of the housing project (replaced by a Hope VI development), the new major league baseball station, significant private and public investment and an expanded Metro station, all fueled by the massive pent up demand for walkable urbanism, has resulted in one of the most remarkable turnarounds taking place in the country today. Land value in this area before the successful redevelopment and expansion of the transit station was between $5 and $10 per square foot. The land would generally have been used for light industrial uses; storing trucks or gravel behind high security fences. The land totaled 97,000 square feet—about two football fields in size (using the most important American unit of land measurement). At $10 per square foot valuation, that comes to a little less than $1 million. The Post reported that the Metro transit agency yielded $69 million from the sale of the land, averaging $712 per square feet. That is 70 times the pre-redevelopment value of five years ago. That is a demonstration of  the power of rail transit and appropriate zoning, which catalyzes high density walkable urban development.   The opportunity exists to take advantage of this value increase within walking distance of a new or expanded rail transit station to help pay for the building and operations of the rail transit. If 20-40% of the $68 million from the southeast DC example of increased value was captured, that means that between $14 and $28 million could be invested in building or operating the rail transit. We need to learn lessons from our planning and development predecessors a hundred years ago; they knew that transportation drives development. And the very development sparked by rail transit can help pay for the rail transit. ——- Christopher B. Leinberger is a land use strategist, developer, teacher, consultant and author, helping to make progressive development profitable. He is currently a Visiting Fellow at the Brookings Institution in Washington, D.C. He is the author of The Option of Urbanism: Investing in a New American Dream from Island Press.