After decades of disinvestment, a new trend is beginning to emerge in Michigan metropolitan areas, with Grand Rapids and Detroit-Ann Arbor leading the way: a shift back towards walkable urban places, referred to as “WalkUPs.” According to a new report released today at the LOCUS (a program of Smart Growth America) Michigan Leadership Summit by the George Washington University School of Business (GWSB), in partnership with Michigan State University, there is significant pent-up demand for walkable urbanism in Michigan, evident by the rent and price premiums for walkable real estate that have emerged over the last several years.
The report – The WalkUP Wake-Up Call: Michigan – examined the top seven metropolitan areas across Michigan, including Detroit-Ann Arbor, Grand Rapids-Muskegon-Holland, Lansing, Jackson, Kalamazoo-Battle Creek, Saginaw-Bay City-Midland, and Flint.
The research analyzes and defines the different forms and economic use of all land use across these seven metro areas, revealing there are 46 WalkUPs. These WalkUPs are ranked by economic performance, measured by average rents, and by social equity performance, measured by accessibility, opportunity, and affordability for residents. Lastly, the report identifies emerging WalkUPs where new development could go.
The analysis uncovers a trend becoming more apparent that tells us that Michigan metros are moving away from drivable sub-urban development, which has long been the dominant form of development so associated with the automobile industry. This shift is evident in rising rent and price premiums. Across all of the metros, apartments rent for more per square foot when they are located in a WalkUP, as compared to a drivable sub-urban location. The same is true for home prices per square foot in most of the metros. Rents for office and retail space were found to be more mixed. While walkable urban places are being seen as making a comeback in the state, it’s important to note that most of them are still in a state of transition.
“It would have been unthinkable 15 years ago that these metro areas within Michigan – the center of the car and truck manufacturing industry – would have seen any form of investment and development in walkable urban places,” said Chris Leinberger, president of LOCUS, the Charles Bendit Distinguished Scholar and Research Professor at GWSB and chair of the GWSB Center for Real Estate and Urban Analysis. “This shift to walkable urbanism presents the opportunity for real estate developers, investors, land use regulators, public sector managers, and residents to create economic opportunities while achieving environmental sustainability and ensuring a mix of incomes in these places. Walkable urban places also yield much higher tax benefits for local governments and the State of Michigan.”
National polls have shown that up to half of the population wants to live in a walkable place, yet only eight percent of the total housing stock in the Michigan metro areas is walkable, whether in the central cities or urbanizing suburbs. Furthermore, people under the age of 35, particularly those with college degrees, prefer walkable urban places. Attracting and retaining these educated young professionals is critical for economic development in Michigan.
“As this new research demonstrates, places like Downtown Birmingham, Main Street—Ann Arbor, and Downtown Grand Rapids illustrate the full potential of walkable urbanism to create value,” said Mark Wyckoff, senior associate director of the Land Policy Institute at Michigan State University, a partner in the report. “While Downtown and Midtown Detroit have demonstrated rapid revitalization over the past five to seven years and a promising future is seen in Lansing with a new bus-rapid transit corridor, many potentially walkable urban places in Michigan have not yet actualized their potential.”
The report ranks Michigan WalkUPs with platinum, gold, silver or copper ratings on both economic and social equity metrics. On the economic side, high-ranking places have reached “critical mass,” a point at which enough businesses and amenities are in place to attract residents without government subsidies. Top platinum level WalkUPs include Downtown Birmingham and Main Street—Ann Arbor. At the other end of the spectrum, on the lowest copper level, are areas such as Downtown Dearborn East and Downtown Bay City. These WalkUPs have the potential to become vital walkable urban places but may need public support and/or a pioneering developer to realize it.
The WalkUPs are also ranked on a first-of-its-kind social equity performance metric, measured by accessibility/opportunity and affordability. Places such as Midtown Detroit- Cass Park District, Downtown Grand Rapids and Downtown Lansing rose to the top with platinum social equity ratings indicating they offer a mix of both moderately priced housing and easy access to employment. On the other side of the spectrum, areas such as Downtown Northville, Downtown Flint and Downtown Battle Creek received the lower copper rankings.
Gary Heidel, chief placemaking officer at the Michigan State Housing Development Authority (MSHDA) said, “We’re seeing many of the walkable urban places across these Michigan metros offering a strong combination of both economic opportunity and affordability compared to the drivable suburbs. However, as walkable development continues to grow, this may generate concerns over gentrification and displacement of low-income residents. Establishing plans in advance of this gentrification to preserve affordable housing is critical.”
The report calls for continued support and management by local leaders, patient investment capital, and federal, state and local government in order to continue the progress towards walkable urbanism throughout Michigan. Now, more than ever, there’s a strong need for pioneers who can lead the way. In addition, an investment in rail transit throughout the state, where there is currently very little, will help propel the development of walkable urban places.
To see the full list of land use types, as well as the list of WalkUP economic and social equity rankings, download the report at http://www.smartgrowthamerica.org/research/the-walkup-wake-up-call/.
The WalkUP Wake-Up Call: Michigan will be unveiled in Detroit at LOCUS’s Michigan Leadership Summit: Closing the Next [Smart Growth] Deal on June 23, 2015. At the Summit, Regional Leadership Awards will be presented to Crosswinds Communities and the Gillespie Group, two real estate developers or investors who have demonstrated exemplary commitment to public leadership and development for walkable, sustainable development. To find out more information about the 2015 LOCUS Michigan Leadership Summit and the Regional Leadership Award recipients, visit www.locusdevelopers.org/leadership-summit.
The WalkUP Wake-Up Call: Michigan was funded by MSHDA, the Michigan Economic Development Corporation (MEDC), and ten Michigan-based foundations.