What's New Urbanism Worth?

By Alex FrangosStaff
The Wall Street Journal
December 24, 2003

A new study reveals contradictions in what home buyers are willing to pay to live in so-called new urbanist communities, whose design emphasizes, among other things, shorter blocks, sidewalks, convenient mass transit, bicycle paths and strategically placed open spaces.

Gerrit Knaap, a co-author of the study, which appears in the Journal of Urban Economics, says home buyers pay a premium for elements like connected street networks, smaller blocks, better pedestrian access to shops and proximity to light rail. But while they're willing to pay a premium to be near these elements, they don't actually want to live in the thick of them.

"The American public seems conflicted and self-centered" when it comes to where they want to live, says Mr. Knaap, who also is the executive director for the National Center for Smart Growth Research and Education at the University of Maryland. For instance, people like to able to walk to the store, but they don't want the store in their immediate neighborhood. They like having a street grid that is easy to navigate, but prefer to live on a cul de sac, a feature that disrupts traffic flow.

Homes in intimate and highly planned neighborhoods fetch 15.5% more than comparable homes in traditional subdivisions, according to the study.

New urbanism is a movement among planners, architects and home builders to design neighborhoods that foster social interaction. The trend toward building these types of neighborhoods has emerged in the past decade as a reaction to the subdivision-style developments of the previous decades. Subdivisions separate residential from commercial uses, causing, critics says, slavish reliance on cars, which, in turn, leads to traffic congestion and social isolation.

The study examined sale prices of 48,000 single-family homes around Portland, Ore. Using computer mapping, the researchers collated the sale prices with neighborhood characteristics such as the number of cul de sacs, distance to shopping, and walking distance to rail stations.

John K. McIlwain, a senior resident fellow at the Urban Land Institute in Washington, D.C., isn't surprised that people pay more for homes in new urbanist areas, but questions the notion that density is a negative in pricing. The study "splits things apart that have to be looked at together," he says. "If you are going to use land intensively, how you design it and the amenities you include are critical."