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Local bike paths mean higher house prices

Transport planner Rachel Smith writes: On April Fool’s Day Fairfax Media posted a video affirming that the new inner Sydney cycleways have had a positive effect on property prices. It was no joke. It seems that having a bikeway right outside your front door is good for your health and the value of your house.

The City of Sydney’s network of separated cycleways have attracted their unfair share of controversy; threats of legal action, opposition from traders and a protest rally ironically attended by 200 pro-bike lane supporters and no opponents.

Fairfax interviewed Nic, a local real estate agent, who said that the Bourke Street bike path has had a “positive effect and influence on sales in the area” as well as Don, an owner-builder, selling a recently renovated million dollar property. Don explained the combination of a garage at the rear and the bike path out the front had added a premium of $100,000 to his house. Like many, Don had been sceptical, particularly because of the loss of on-street car parking, but now that the Parisian style bike boulevard with gardens and street lamps has been finished, even he agrees that Bourke Street “looks good”.

There is no denying that Bourke Street is beautiful; lined on either side with grand Victorian homes, exquisite cafes and a stunning canopy of trees. The bikeway has, as Lord Mayor Clover Moore says, made Bourke Street, “a very special street”. We all want to live on a beautiful street and we all want to know what the tangible benefits of improved social infrastructure could be to our street, our neighbourhood our city. So should we, and can we, use economics to support the case for more safe and separated bikeways in our cities?

Yes we should. But, implementing anything that requires changes to on-street car parking is controversial because many traders believe, rightly or wrongly, that customers will go elsewhere, that ‘convenience’ will be destroyed and that bike riders don’t spend money.

Research in 2007 [PDF] by Alison Lee sought to identify the economic value of replacing car parking with bike parking in shopping strips. The case study in Lygon Street Carlton in Melbourne showed that cycling generates 3.6 times more expenditure. Even though a car user spends more per hour on average compared to a bike rider, the small area of public space required for bike parking suggests that each square metre allocated to bike parking generates $31 per hour, compared to $6 generated for each square metre used for a car parking space, with food/drink and clothing retailers benefiting the most from bike riders.

A model developed in the US, as part of research that examined factors affecting property values in Delaware, showed that a bicycle path would be expected to increase property values by about US$8,800. The research done by David P. Racca and Amardeep Dhanju [PDF] in 2006 indicated that the presence of a bike path either increased property values and ease of sale slightly or had no effect.

A study in Pittsburgh found that both property owners and real estate agents both agree that bike paths led to increases in business and property selling prices. Although these increases in value cannot be strictly linked to the bikeway, the increase is noteworthy. Pittsburgh is not an isolated case. Realtors in North Carolina reportedly added US$5,000 to the prices of 40 homes adjacent to the Shepherd’s Vineyard Bikeway. Similarly results from the 1999 Bicycle Plan by the City of Vancouver indicated that 65% of realtors would use the bikeway as a selling feature of a home. Another study in 1997 showed that bike paths were placed third in a list of thirty-nine features that home buyers defined as crucial in persuading them to buy a home in a new community.

These case studies provide a basis for action and demonstrate that bikeways can help to support a diverse and resilient economy with positive benefits for individuals.

The fundamental problem we have in Australia is that we need to improve our data collection efforts. It is impossible to monitor change if we don’t measure change. A prime example is Brisbane’s South East Freeway Bikeway, adjacent to the M3 Motorway, designed for commuter cyclists. The bikeway is predominantly used by male cyclists for longer distance commuting trips with almost all trips made during the morning and afternoon peaks. We know who is using this established bikeway now but we have little knowledge of cycling behaviour in the area prior to the bikeway and no contestable evidence of people relocating to the area to use the bikeway. Without this ‘before’ and ‘after’ evidence cycling, as a transport option, is powerless to compete for government funding.

Bikeways cost money and their merits are often called into question. If we really want cycling to be a central part of our cities more data is needed to show a direct correlation between a city’s bikeway program and the city’s economy. Planners, engineers, economists, policy officers and decision makers alike, need to increase the quantity and quality of pre and post construction data collected. They also need to develop a consistent methodology to justify and evaluate the benefits. Finally they need to work in partnership with business associations to measure and monitor change, in an objective manner, with appropriate scale analysis.

Despite the early controversy to change, Sydney’s Lord Mayor knows the bikeways have been a success. Votes for her in the polling booths close to the bikeways have been maintained or increased… seems like bikeways can be good for wallets, waistlines and the pollies that support them.

Rachel Smith is a Principal Transport Planner with AECOM in Brisbane. Rachel’s Cycling Super Highways Toolkit (downloadable here) and study tour received financial support from the 2008 Australian Institute of Traffic Planning and Management Janet Brash Memorial Scholarship.

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  • 1
    Jean
    Posted May 4, 2011 at 7:50 am | Permalink

    Alternate headline- bikeways reduce opportunities for affordable housing :-)

  • 2
    Posted May 4, 2011 at 3:59 pm | Permalink

    That’s an interesting take on it Jean.

  • 3
    Captain Planet
    Posted May 4, 2011 at 4:08 pm | Permalink

    More accurate take on alternate headline –

    Bikeways found to be desirable trait amongst urban home buyers.
    Temporary shortage of bikeways elevates prices in areas with bike paths.
    Once all areas have bike paths, price distortion will be nil.

  • 4
    kd
    Posted May 4, 2011 at 4:20 pm | Permalink

    Although I’m live in the Regions, I’ve cycled around bits of the Sydney CBD a few times lately between Redfern/Newtown and Pyrmont the CBD. The bits of town with the decent cycle paths /shared spaces are an absolute pleasure to cycle around. Of course the regional area I live in has decent cycle paths and mostly quiet roads, and cycling is generally pretty pleasant around here barring one or two stretches of main road, where I won’t cycle anywhere except the pavement due to extremely aggressive drivers on the roads.

  • 5
    the man on the clapham omnibus
    Posted May 4, 2011 at 8:27 pm | Permalink

    Interesting statistics, hopefully these can spread to mainstream media messages promoting bike transport and we can prevent situations like the waste shown in this Age article:

    http://www.theage.com.au/victoria/monash-upgrade-a-waste-20110227-1ba1r.html

    Wondering if you could do a comparison with overseas rates on injuries for cyclists.

    I am interested to see if our helmet laws are a bandaid response that reduces cycling takeup to our inferior cycle lanes and aggressive drivers rather than looking to treat the cause of the injuries by properly separating bike traffic from car traffic.

  • 6
    David
    Posted May 4, 2011 at 8:54 pm | Permalink

    Jean, I guess it is a matter of whether the glass is half full or half empty as to which view you wish to take.

  • 7
    Altakoi
    Posted May 5, 2011 at 8:56 am | Permalink

    The price value of a cycle path might dissappear if they were more generalised, but the fact it exists clearly indicates that bike paths are desirable. That demand wont’ dissappear with more broad adoption of these paths.

  • 8
    lindsayb
    Posted May 5, 2011 at 12:59 pm | Permalink

    The price premium for areas with good local bike networks may become even more significant as the price of motor vehicle fuel goes ever higher. However, if past experience is anything to go by, we can expect the car/road/oil lobby to fight the development of good quality interlinking safe bike networks, just as they have against increased spending on public transport.
    Get ready for some “grassroots” campaigns like “cyclists are free loaders who don’t pay taxes”, “all cyclists break road rules”, “bikes are not safe and cost our healthcare system millions”, “cyclists are crazed maniacs intimidating poor innocent car drivers and knocking over little old ladies”, “all bikes should be registered”, “sane people don’t ride bikes, cause they look stupid” etc etc.

  • 9
    Linda
    Posted May 6, 2011 at 8:50 am | Permalink

    This is an excellent piece that can be used to persuade reluctant decision makers.

  • 10
    Altakoi
    Posted May 6, 2011 at 9:23 am | Permalink

    As a cyclist I am as unimpressed as anyone with the ‘cycles should be registered’ argument because the vast majority of cyclists own cars and, by virtue of not driving them, are essentially subsidising a car-sized gap on the roads for someone else to use.

    That aside, I am coming to the conclusion that a cyclist rego scheme would be a good way of getting some government clout and getting the moronic element of the car lobby off our collective backs. If assessed on the basis of road usage, with some expectation of return of funds to cycling facilities, then it could be quite useful. Clearly there would need to be exemptions for children etc.

  • 11
    kd
    Posted May 7, 2011 at 4:48 pm | Permalink

    Also since I got a top quality folding bike my car usage has dropped by at least a half. Helped by reasonable cycling infrastructure where I live and the places I travel to.

  • 12
    (the other) HR Nicholls
    Posted May 10, 2011 at 3:02 pm | Permalink

    Can’t agree with you, Altakoi – cars are registered so the third-party insurance system can be administered, and because it’s really easy to kill someone and then drive away. The only function it would serve for bikes is as a massively expensive way to placate idiots with an anti-cyclist axe to grind.

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