Office Relocations Make It Easier to Reconsider Commuting Possibilities

Screen Shot 2015-07-22 at 11.33.40 AMAfter years of locating in car-dependent, suburban office parks, the last few years has seen a trend that won’t surprise most Austinites. Large numbers of companies are now moving back downtown.

According to a new report from Smart Growth America, this job migration is occurring across the U.S. in cities small and large alike. What all of these locations have in common is that there is a critical mass of other companies near by. There are a lot of people enjoying the many options for food, shopping, and entertainment. And the most attractive locations are walkable with access to good public transit. In most of these cities, congestion (particularly for people driving alone) is a given.

Smart Growth America, real-estate firm Cushman & Wakefield, and George Washington University’s Center for Real Estate Analysis examined nearly 500 companies that have relocated, expanded, or opened new offices in downtown locations across the U.S. over the past several years. The diversity of businesses is enormous. They include 52 companies on the Fortune 500, and 12 of Fortune’s 2015 list of the 100 Best Companies to Work For. They range from small enterprises of just a few employees to corporations with thousands of workers.

The report found that companies chose to leave suburban office parks for central business districts (and other walkable downtowns) primarily to retain their competitive advantage. Even though these companies pay a significant “cost premium” to relocate, nearly all of them said their decision has created value.

Businesses that relocated to dense areas enjoyed greater walkability, access to transit, and bike-friendly streets. In fact, Walk Score averages prior to business moves were 52 (somewhere between “somewhat walkable” and “car-dependent”). In the new, downtown locations that businesses moved to, Walk Scores increased to 88 (between “very walkable” and “walker’s paradise”). There were increases in Transit Score and Bike Score also, though less dramatic.

In Austin, urban core job growth has been more pronounced. Between 2002 and 2007, city-center job growth in Austin was about 0.6 percent annually and suburban job growth was about 3.1 percent annually. Between 2007 and 2011, though, city center job growth in Austin surged to 3.4 percent annually while suburban job growth slowed to 2.3 percent annually. That’s the fastest-growing urban core job growth in the nation in that time. Austin, with 28.8 percent of its jobs located in the urban core, now has the highest level of core employment in the nation, ahead of even New York City, which only has about 23 percent of its employment in its urban core.

That’s good news for the region – since downtown generates 2.5 times the taxes it costs in services – but it is also great news for the vitality of our downtown. Now we just need to help people figure out how to get in and out of downtown without driving alone at peak hours!

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