$915 million and counting…

One of the greatest impediments to carfree development in the United States is risk aversion by real estate banks and investors. Large residential or commercial office development projects commonly cost tens or hundreds of millions of dollars.  Why would investors gamble on an experimental design that runs counter to mainstream values and has no proven track record, when they can achieve high return with low risk building typical suburbs and shopping centers?

Carfree development offers a number of economic benefits not considered in standard “pro forma” analyses of costs and revenues for a prospective development project. These include decreased costs related to car crashes, obesity, air pollution, household transportation expenses, infrastructure, parking, etc. We have calculated quantitative estimates of those benefits for a carfree neighborhood (12,000 people living in a carfree mixed-use area extending ¼ mile from a central transit node), as compared to typical suburban development.  We have also identified possible mechanisms by which these benefits could be internalized and converted to construction capital.

The results are pleasantly surprising. $915 million for the carfree district. This is not enough to build the entire district, but it’s a substantial percentage of the total cost. By bringing this capital to the table, we would minimize the real or perceived risk by other investors and make the entire project more attractive.

The economics analysis is presented in the following two files that you may download and review.  This is a work in progress, and we welcome comments and suggestions. Please send any feedback or input to Gus Yates (gus@carfreecity.us):