Placemaking: The Value to Real Estate

A lot of folks may wonder what does placemaking have to do with the National Association of REALTORS®, REALTORS® and real estate.  The simple answer is that the more vibrant public places and open spaces there are in a community, the more desirable a community becomes and the more desirable a community becomes, the more likely it is  for property values to increase.

In addition to several studies and reports documenting the positive effects Placemaking has on the growth of a community, I came across an article in ULI’s Urban Land called “Outlook: How Can Open Space Add Value to Real Estate Development?” that provides some insights by several real estate experts. While the article focused on trends in incorporating open space into the development of multifamily and mixed-use communities, I think the discussion can be expanded to include all types of Placemaking projects.  Here are some excerpts.

What kinds of open space are popular now?

People are searching for the sense of connection and community that is found in well-programmed open spaces as well as for opportunities to improve fitness on bike and pedestrian trails. Because of changing demographics, family structure, and ethnicity, people are seeking spaces that can accommodate informal group activities such as picnics and community events and discrete spaces that cater to different family segments. The most successful open spaces are differentiated through design to be “cool” places.  Jacinta McCann, Executive Vice President, AECOM

AECOM’s development of the South Park landscape will provide approximately 36,000 square feet of public accessible open space.

When we plan our communities, we really focus on figuring out who is going to live there and what matters to them, so the kinds of open spaces we create really depend on the customer. For example, we found that young families wanted not only parks and play areas for their kids to explore, but also open spaces where they could go to decompress from it all. Malee Tobias, Vice President, Research, Newland Real Estate Group

Community Space in a new Development by Newland Real Estate Group, LLC.

How can open space add value to real estate?

There have been a lot of studies showing that proximity to open space increases property values. John Compton, a professor at Texas A&M University, has studied this topic extensively and published his findings in a book called The Proximate Principle. John studied 25 instances of open space near residential developments, and he found that 20 of the 25 cases resulted in higher property values. Furthermore, he found that higher property taxes levied on residential real estate near parks and open space were in some instances even sufficient to pay the debt charges on the bonds used to finance the parks. Open space also enhances economic development. A city with great parks, trails, and recreational amenities attracts talented and educated people because it is viewed as a good place to live. Chris Crawford, President, RVI Planning + Landscape Architecture

Mueller is an urban mixed-use community that has emerged as the result of the redevelopment of the abandoned Robert Mueller Municipal Airport.  RVi has played a critical role in the design of over 140 acres of parks and open space and an extensive, seven-mile hike and bike trail system at Mueller.

What are some best practices in incorporating open space?

One of our best practices in planning open space is to be very intentional about how we design it and to know whom we’re planning for—to understand who will live there, who will recreate and exercise there—and build unique spaces for various buyers, not just generic parks. Malee Tobias

If you can create something that enhances the neighborhood as well as becomes a feature for the multifamily building you’re designing, then you have made a real difference.  Rohit Anand, Principal, KTGY Archtecture + Planning

Community Space at Village at Valley Forge, KTGY Archtecture + Planning

What other trends or factors are shaping open space development?

In certain markets, we’ve seen some consumers wanting fewer bells and whistles like a large clubhouse, and more unstructured, natural open spaces instead. Not every open space needs to be completely programmed with built, hard amenities. A distinctive giant boulder, or a bridge over a creek, or a place where people can just sit or picnic—these resonate well with the customer today. It also means creating areas that let people figure out for themselves how they want to use a space and interact with nature. Having more unstructured space can also lower maintenance fees.  Malee Tobias

San Elijo Hills (CA), a development by HomeFed Corporation, was designed to give its residents the four essential elements of a strong, nurturing community: a vibrant towncenter, including a major grocery store, shops, eateries and convenient services; ample parks and trails; award-winning schools; and an ideal community lifestyle incorporating activities and traditional events that foster a close-knit, small town environment.

There is an interesting trend here in San Francisco, which involves flexible and adaptable use of open spaces through temporary or pop-up activities. For example, the 2013 America’s Cup race village has just been staged on a large waterfront pier that also accommodates a brand-new cruise terminal. The terminal was temporarily used for the America’s Cup event, and in front of the terminal building is a space that will become a new park for the city. During the event, it became a popular destination as a low-cost temporary pop-up park, with synthetic grass, bean bags, picnic blankets, a large projection screen, and even retail and a bar housed in shipping containers. The way people have used the park on this basis should inform the design and programming of the permanent park.   Jacinta McCann

So as more and more real estate developers are jumping on the open spaces/Placemaking bandwagon, so too should REALTORS®.  Check back next week for a post on the Role of REALTORS® in Placemaking.

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