Thursday, December 16, 2010

Higher real estate values and walkability

Richard Florida has a post celebrating the Creative Class (surprise!) and walkability. He calls it "America's Most Walkable Cities". Using Nate berg's analysis of how much of each city is above average for walkability, Florida correlates high scoring cities to his preferred metrics of urban health: average income, high-tech industry, gay index, bohemian index, creative class, human capital and patents per capita.

First, never mind that Berg's calculations are for central cities yet Florida refers to them as metro areas and calculates his metrics with metro areas data. That's the wrong way to do it, but it doesn't really matter in this case. Second, and more importantly, he finds that average income has a strong correlation to walkability (.64). This is the strongest of all his metrics, and it suggests a hidden factor that ought to be included: the price of real estate! Wages are higher because the cost of living is higher! Real estate is extremely valuable in San Fransisco, Boston, New York, Washington, etc. As the price of real estate goes up, people and firms consume less of it and build more densely on what they do buy (parking requirements and other zoning controls not withstanding). This pushes people and places closer together and increases walkability regardless of how many patents per capita there are.

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