Titan Properties USA

The 15-minute city as a concept has been around for a while now. First introduced by the Colombian-French scientist Carlos Moreno and eventually implemented as an official urban planning policy by the City of Paris, the 15-minute city promises its residents access to amenities without the need for a car. 

The idea is that you should be able to go to work, do your grocery shopping, visit the local medical center, and pick up the kids from school, all within a 15-minute walking radius of where you live. This all sounds wonderful, but what matters from an investor’s point of view is whether there is demonstrable demand for it—and whether it will continue growing. 

So, are 15-minute cities worth factoring into your real estate investment decisions, or are they just a temporary fad?

Beyond Walkability: Why the 15-Minute City May Be a Useful Concept

Most real estate preference surveys focus on walkability as a growing demand factor. The National Association of Realtors (NAR) is the most robust source of data on the subject and has been running its Community and Transportation Survey every three years. The results of the latest one, completed in 2023, are actually pretty mixed if we take walkability as a stand-alone measure of a location’s attractiveness. 

In fact, only 48% of respondents rated walkability as a high priority if they were planning to move. Instead, people prioritized high-quality public schools in the area (62%), a short commute (61%), and having a large yard (56%) and a large house (54%). Note that the majority of those respondents (53%) were homeowners, and only 36% were renters. 

It’s not that being able to live in a walkable community doesn’t matter. It’s just that, for current homeowners, it doesn’t matter enough to move the needle in their decision-making.  

Does that mean that the 15-minute city idea is of no value to a real estate investor? Au contraire. In fact, it may be a more valuable tool for investors than surveys about walkability. 

What matters isn’t just walkability on its own but where and what people would be walking to. The 15-minute city concept is about more than building more sidewalks and bike lanes; its core principles are sustainability, solidarity, and citizen participation. 

In other words, it’s about people building meaningful connections and supporting each other within the community. This is quite a different setup from your typical suburban residential neighborhood, with a sidewalk for jogging. 

What Renters Want

Recent research that zooms in on renters’ preferences shows that their values increasingly align with this concept of a supportive, friendly neighborhood where people can connect. 

One in-depth survey of 1,500 renters in multifamily apartment units across the U.S. by a resident experience company called Venn found that the vast majority favor three things: 

1. The chance to live in a place with thriving local businesses (4 out of 5 respondents)

2. The ability to grow their social connections and socialize with neighbors (three-quarters of respondents)

3. Opportunities to volunteer in the local community (3 out of 4 respondents)

The Venn survey emphasizes that many landlords don’t understand what renters actually want, mistakenly assuming that they’re attracted to the latest smart home technologies and free subscriptions to services like Netflix. But these things factor very little into people’s decisions about where to rent—and even less into their decisions about whether to renew their lease. Instead, the survey found that renters who were satisfied with their local communities were twice as likely to renew their leases than those who were “amenity-rich” but didn’t feel like they belonged where they were.  

On a purely psychological level, this makes a lot of sense. Renters know that where they’ll be living likely won’t be their dream home. Most renters have to compromise a lot on space, furnishings, and even the type of housing they end up living in. No amount of Netflix will fix that. However, making friends and hanging out at a great local café may just take the edge off some of the downsides of the renting experience. 

The survey even found that people reacted more positively to apartment ads that showed communal spaces with people in them, as opposed to just images of empty apartments. 

Doing Your Neighborhood Research the Right Way

As is so often the case with doing successful market research as a real estate investor, the trick here is to switch on your nonlinear thinking. It’s not that walkability doesn’t matter to renters; it’s just that taken as an isolated factor, it’s not very useful. Instead, what pays off is assessing the whole neighborhood. Walkability is not a bad place to start this kind of assessment because highly walkable neighborhoods also tend to be the ones that have thriving businesses and communities. 

Antoine Bryant, Detroit’s director of planning and development, described growing up in a walkable Brooklyn neighborhood in an article about 15-minute cities: “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 is the sort of thing the modern renter wants. The success of cities like Portland, Oregon, Boston, and Baltimore is not just due to these places drastically improving walkability. It’s the whole urban regeneration package, with communities transformed by sustainable green spaces, thriving small businesses, and an overall friendly and inclusive environment. Not only do renters like this setup in theory, but they are also prepared to pay more for it.  

A cursory look at recent rental market trends in Portland, for example, shows that it really pays to do your research on a granular, neighborhood-by-neighborhood level. Don’t look at overall rent statistics. 

Portland’s average one-bedroom rents are showing a 4% annual increase. But look at the annual rent price increase for the popular King’s Hill Historic District (full of restaurants, cafés, daycare centers, etc.)—it’s a whopping 31%. Oh, and by the way, King’s Hill has a walkability score of 94. Food for thought?

Join the community

Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more.

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.

This post was originally published on this site

Skip to content