“Infrastructure drives our real estate investments. Investments in highways led to auto-oriented development. Investment in public transit led to development next to transit stops and rail stations. Now we are starting to see trail-oriented development,” commented Edward McMahon, senior resident fellow at the Urban Land Institute as he explained why new real estate projects were springing up alongside urban bike trails.
The trend for new development near active transportation trails and the increased willingness of developers and cities to create communities tailored to those who would rather cycle than drive is the topic of the recently published ULI report titled Active Transportation and Real Estate: The Next Frontier.
McMahon argued that these active transportation trails and the subsequent associated development were a response to the very real trend of people moving away from using privately owned cars and toward cycling, walking, and using public transit. He highlighted that Americans were driving 8 percent fewer miles than a decade ago and that residents in transit-rich cities such as New York, Boston, San Francisco, and Washington, D.C., now owned an average of less than one car per household. In addition, in 2014 Americans bought more bicycles (18.1 million) than cars and trucks combined (16.4 million). Not only is bike ownership on the rise, but so are bike-share schemes, which have grown in popularity from only seven in the world in 2002 to 750 globally today, including 70 in the United States.
Roswell Eldridge, chief operating officer of Toole Design Group, highlighted the opportunity for further growth in active transportation, since 43 percent of journeys undertaken in the United States were three miles (5 km) or less. Strong potential demand also exists for trail-oriented development, with 52 percent of Americans wanting to live in a community where they were not reliant on cars for transportation. This trend is being driven by millennials, with 45 percent of this demographic intentionally choosing not to drive and actively seeking out other modes of transportation.
Tadd Miller, chief executive officer of Milhaus, a developer that has built $250 million of developments along trails in Indianapolis alone over the past five years, argues that the trend is here to stay. “Finally at a point with shared mobility, where the financial benefit is there, the infrastructure is catching up and we finally have a demographic and age bracket that is accepting of it.”
– Urban Land Institute, April 2016