The concept of the 15-minute city has been in circulation for some time. Initially introduced by Colombian-French scientist Carlos Moreno and subsequently adopted as an official urban planning strategy by Paris, the 15-minute city offers residents access to essential services without reliance on cars.
The core idea is that individuals can fulfill work obligations, shop for groceries, access healthcare, and retrieve their children from school within a 15-minute walking distance from their homes. While this concept appears appealing, investors are primarily concerned with assessing its tangible demand and potential for sustained growth.
The question then arises: should real estate investors consider 15-minute cities in their investment decisions, or are they merely a passing trend?
Some Good Arguments for the Need for these 15-Minute Communities
Many real estate preference surveys center on the increasing demand for walkability. The National Association of Realtors (NAR) stands out as a comprehensive data source on this subject, regularly conducting its Community and Transportation Survey every three years. The findings from the latest survey, finalized in 2023, present a nuanced perspective when considering walkability as the sole measure of a location’s appeal.
Interestingly, only 48% of respondents ranked walkability as a top priority when contemplating a relocation. Instead, individuals placed greater emphasis on factors such as access to high-quality public schools (62%), a short commute (61%), a spacious yard (56%), and a sizable home (54%). Notably, the majority of these respondents (53%) were homeowners, with renters comprising only 36%.
This doesn’t discount the significance of residing in a walkable community. However, for current homeowners, this factor isn’t compelling enough to significantly influence their decision-making process.
So, does this imply that the 15-minute city concept holds no relevance for real estate investors? On the contrary, it could be a more valuable consideration than surveys solely focused on walkability.
What truly matters is not just walkability itself but the destinations and amenities accessible through walking. The 15-minute city concept transcends mere infrastructure improvements like sidewalks and bike lanes; its fundamental principles revolve around sustainability, community cohesion, and active citizen involvement.
In essence, it emphasizes fostering meaningful connections and mutual support within neighborhoods—a departure from the typical suburban landscape characterized by jogging paths.
What Renters are Saying
New studies focusing on renters’ preferences indicate a growing resonance with the idea of a nurturing, sociable neighborhood fostering interpersonal connections.
A comprehensive survey conducted by Venn, a resident experience company, delved into the preferences of 1,500 renters residing in multifamily apartment complexes throughout the United States. The results underscored three key factors that the vast majority of respondents favored:
- Four out of five respondents expressed a desire to reside in an area featuring flourishing local businesses.
- Three-quarters of respondents valued the opportunity to expand their social connections and interact with neighbors.
- Three out of four respondents expressed an interest in opportunities to volunteer within the local community.
The Venn survey highlights a common misunderstanding among landlords regarding renters’ true desires. Landlords often assume that tenants are primarily enticed by cutting-edge smart home technologies and complimentary subscriptions like Netflix. However, these amenities play a minor role in renters’ decisions regarding where to live and are even less influential in their choices to renew leases. Instead, the survey reveals that renters who derive satisfaction from their local communities are twice as likely to extend their leases compared to those residing in “amenity-rich” environments but lacking a sense of belonging.
This finding aligns with basic psychology. Renters are aware that their rented space may not align perfectly with their ideal home. They frequently compromise on aspects such as space, furnishings, and housing type. No amount of Netflix or technology can compensate for these compromises. Conversely, forming friendships and frequenting enjoyable local establishments can mitigate some of the drawbacks associated with renting.
Interestingly, the survey notes that apartment advertisements depicting communal spaces with people present evoke a more positive response from viewers than ads showcasing empty apartments.
Further reading: Exploring the Benefits of Downsizing to a Cozier Residence
Conducting Thorough Neighborhood Research
Mastering effective market research as a real estate investor often requires activating nonlinear thinking. The key lies not in dismissing the importance of walkability to renters but in recognizing its limited value when considered in isolation. Instead, the real payoff comes from evaluating the entire neighborhood. Starting with walkability is a good approach because highly walkable neighborhoods typically also boast vibrant businesses and communities.
In an article discussing 15-minute cities, Antoine Bryant, Detroit’s director of planning and development, reminisced about his upbringing in a walkable Brooklyn neighborhood: “I looked out the window, and across the street was a bodega, which is like a mini-grocery store. Fish market, dry cleaner, meat market, pizza, another dry cleaner, liquor store, hardware store and then another bodega.” This type of neighborhood setup aligns with modern renters’ preferences.
Cities like Portland, Oregon, Boston, and Baltimore have achieved success not solely by enhancing walkability but through holistic urban revitalization efforts. These efforts include creating sustainable green spaces, fostering thriving small businesses, and cultivating a welcoming and inclusive atmosphere. Renters not only appreciate this model in theory but are also willing to pay a premium for it.
Examining recent rental market trends in Portland underscores the importance of conducting detailed, neighborhood-level research. Instead of focusing solely on overall rent statistics, analyzing specific neighborhoods like the King’s Hill Historic District provides valuable insights. This district, renowned for its abundance of restaurants, cafés, daycare centers, and other amenities, has experienced a remarkable 31% annual rent price increase, alongside its impressive walkability score of 94. Food for thought, indeed.
