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Kaid Benfield’s Blog

Smart growth investment may be key to small cities' economic vitality

Kaid Benfield

Posted September 15, 2011

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  downtown Bentonville, AK (by: nsub1/Nick, creative commons license)

This recent report from the Center for Neighborhood Technology looks very interesting.  Among other things, it seems to confirm exactly what Chuck Marohn (Community Growth Institute, Strong Towns) has been telling us about the economic imperatives facing smaller cities and towns in Heartland America:  to become resilient, prioritize investment in smart growth and efficient transportation.  Extracted and paraphrased from the report and its accompanying press release

CNT examined the state of housing, transportation, and job access in Northwest Arkansas, which includes the four core cities of Bentonville, Fayetteville, Springdale, and Rogers. The analysis is supplemented by findings from 23 interviews of business leaders, elected officials, municipal staff, and local advocates. It reveals the following:

  • It is becoming more expensive for middle class residents to live near their jobs. Apartment rents and home prices within a short distance of employment centers are affordable by a national standard but are rising quickly for the middle class.
  • In 2000 households spent more on transportation than they did on housing. For every dollar of earned income, a typical household spent 26 cents on housing and 29 cents on transportation in 2000. Both costs have risen as gas prices have increased and housing has appreciated.
  • Northwest Arkansas lags peer regions in combined housing and transportation affordability. Because of high transportation costs, combined housing and transportation costs are higher than in peer regions such as Huntsville, Alabama, or Lexington, Kentucky. High transportation costs offset the regional advantage in housing affordability.

US Census data show that the median property value for a home in Northwest Arkansas rose 59 percent between 2000 and 2007, while median household income grew less than 4 percent during that time.

            affordable locations in Northwest Arkansas (by: CNT) 

In the maps above, note the difference in the affordability of Northwest Arkansas locations when transportation costs are included with housing costs.  On the left side, areas in yellow indicate that typical housing costs amount to no more than 30 percent of household income; on the right, areas in yellow indicate that housing and transportation costs together amount to no more than 45 percent of household income.

To maximize regional economic development and ensure long-term prosperity for all households, the CNT report recommends three actions:

  1. Rethink regional mobility. In Northwest Arkansas, four employers—Walmart, Tyson Foods, J.B. Hunt Transport Services, and the University of Arkansas—account for roughly one in four jobs in the region. (With 30,000 jobs, Walmart employs nearly twice as many workers as the other three companies put together.)  Ozark Regional Transit, downtown Fayetteville, AK (by: Clinton Steed, creative commons license)which the report says is underfunded and perceived as underperforming, should partner with these major employers to give employees the option to commute without getting behind the wheel.
  2. Align downtown investments into a regional vision. The region should provide incentives for major investments in the downtowns of Bentonville, Fayetteville, Rogers, and Springdale that will expand opportunities to live in compact, walkable communities.
  3. Increase demand for walkability. While many households understand housing costs, they are unaware of the total cost of transportation. Outreach to residents, developers, and lenders about the combined costs of housing and transportation will increase demand over the long term for housing that minimizes combined housing and transportation costs.

The CNT report was supported by The Home Depot Foundation’s Sustainable Cities Institute, which is working with cities across the country to assist in the planning and implementation of local sustainability strategies. SCI provides vetted and detailed information for small and medium-sized cities on a range of topics:  land use, transportation, buildings, materials management, water, green infrastructure, economic development and community engagement.

Download the report, Driving Up the Cost of Living: How Housing and Transportation Costs Pressure Economic Development in Northwest Arkansas, here.

Move your cursor over the images for credit information.

Kaid Benfield writes (almost) daily about community, development, and the environment.  For more posts, see his blog's home page.

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Steve DSep 15 2011 10:19 AM

As a former resident of Bentonville, I read that with great interest last week when it came out. Good recommendations, though the regional transit system is almost like a dial a ride service it's so infrequent. When we were there, it really just had one or two lines. Walkability and mixed use and slight increases in density are really going to be the key in these places (and will help transit be more effective one day.)

We lived just about 2-3 blocks behind that street in the picture. The downtown square has really turned into a lovely place thanks to great streetscaping, the commitment of the Main Street group and the local bank that committed to stay there, and a new influx of small businesses on the square (instead of vendor offices that killed the vitality of the streets while we were there.)

Last time I was back two years ago, there were half-finished subdivisions everywhere and my pals there said the boom had really come to a crashing halt. It was like all the WM vendors that were going to come and set up shop had all already come, and that was the end of the big boom. Of course, it took the homebuilders and the carwash builders and the strip mall builders awhile to figure this out.

What will happen to NW Arkansas when 8 dollar gas wrecks Wal Mart's business model and the machine goes kaput.

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