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Streets: A Platform for Creating Value

Looking west from Queen Street down Wellesley Street West, Auckland. (Sir George Grey Special Collections, Auckland Libraries, 1-W1162)

My last post discussed the inherent tension between through and to movement. I argued that where there is increased pedestrian angst there is a place dividend that naturally seeks to be realised. This post takes a related theoretical understanding of streets and urbanism and applies it to Auckland’s city centre.

I have used Steve Mouzon’s work as inspiration. In this excellent blog post, The Speed Burden, he describes how designing cities for the purpose of moving cars quickly devours valuable real estate and is anti-antithetical to the functions of cities in the first place.

Busy streets, for almost all of human history, created the greatest real estate value because they delivered customers and clients to the businesses operating there. This in turn cultivated the highest tax revenues in town, both from higher property taxes and from elevated sales taxes. But you can’t set up shop on the side of an expressway. How can cities afford to spend so much to create thoroughfares with no adjoining property value?

Steve begins by diagramming an area in Florida to demonstrate how much land is wasted in road space.

“green land: has real estate value ~ red land: no real estate value” http://www.originalgreen.org

His mapping exercise becomes more nuanced by considering whether streets provide “frontage” value. This is similar to the Link and Place framework. Real estate value is generated at the street frontage where the place of human exchange and transaction takes place. He maps them accordingly: Full Value, Compromised Value, and Worthless.

“green frontages: full value ~ olive frontages: partial value ~ red frontages: worthless” http://www.originalgreen.org

Taking the exercise one step further and using Auckland as a case study, I sampled current land values for properties and applied a relative score to each street segment to depict “street frontage value”. I removed the dollar values from the scores, but there is an actual monetary value difference between the colours. For example, RED is 6 times as valuable as DARK GREEN.

Street Frontage Value: From Green (Low) to Red (High)

Most interesting to me is the location premium that still exists for property in the lower Queen Street valley. Who could have predicted that 100+ years from the heyday of downtown Auckland that the highest land values would still be centred on Queen St and its associated network of quirky lanes, arcades and back streets. What will it be like in the next 100 years? What ever happened to “place doesn’t matter”?

Clearly motorways defeat both spatial integration and thus urbanism as described in Patrick’s Severance City post. Everything adjacent to the motorway exists under an “edge” or barrier environment. This would also be revealed if I ran the Urban Network Analysis process since it is a simple geometric reality.

I like this analysis framework for two reasons- first, it helps to graphically represent how the streets and lanes are the actual conduit for exchange/transaction which provides (real estate) value in cities. When street frontages are compromised by conditions such as excessive traffic, real estate value declines and building forms start to take defensive positions (such as turning away or sitting back from the street edge) further degrading the actual potential of place and leading to a condition of entropy.

Building form responds to street design. Nelson Street, Auckland.

Second, it depicts the importance of urban structure which is why some uses (such as micro retail) can exist in some places but would be untenable in others. For example, the high value streets are all nested in a highly connected and central location. Patrick Kennedy from Walkable DFW further describes this phenomenon:

 The greater the accessibility to a variety of people, places, and things, creates value, which instills demand, and thus density. Network integration is the release valve of demand, instilling opportunity and access to markets.

I originally started this post as mapping exercise to investigate whether turning slip lanes were erosive to city life. I got sidetracked and this analysis is probably jumping to the conclusion.

In the future I will overlay sliplanes, kerb cuts, multiple-lane one-way streets, surface parking lots and streets with excessive vehicle speeds to see if there are relationships. Also, if I can locate Jan Gehl’s street life data I will add it. I wonder if there will be any patterns?

 Kent is an urban planner at Isthmus.

42 comments to Streets: A Platform for Creating Value

  • Stu Donovan

    Hi Kent, great post/analysis. Be interested in your comments on:
    1. The effect of Albert Park is interesting. Is it adding value because a) people like it or b) it reduces the space available around the uni? Or both?
    2. On a related point, the high land values tend to extend much further to the east of Queen Street than the West. Is this a function of the street network, the built heritage, or Albert Park/Uni?
    3. Looking at the waterfront, you can see the difference in land values to the west, where the watefront is accessible to the public, compared to the east, where it’s obstructed by the Port …

    • Kent Lundberg

      2. I think topography is at play here. Also the covergence of streets provides a multiple movement options. Jane Jacobs stuff- small blocks, etc.

    • Kent Lundberg

      3. The land value was surprisingly low along the waterfront. I wonder whether it may be due to historic preservation covenants?? Your suggestion about the ports makes sense. It is also a barrier. One thing I’ve been thinking more about is how waterfronts are typically not the most active people places any more. A colleague visiting NYC also made this comment about how the busiest places are central in Manhattan, not along the water. This seems obvious when you consider the geometrics of how people use the city on a day to day basis. (we can’t all be rollerbladers, or tourists)

    • Kent Lundberg

      1. I think the value is not so much in Albert Park but being closer to central concentration of streets.

    • David O

      The difference between east and west of Queen St is because west of Queen St all the roads are basically motorway on/off ramps.

      • Stu Donovan

        That’s part of it yes. Although I think that historically the east side has always had higher land values, even way back when the Merchant houses were built on Princes Street. And that predates vehicles/motorways etc.

        • David O

          And of course, they are probably the on-off ramps because they were lower value in the first place. Might be as accidental as what streets got built first – I imagine from their finer grain block size that High St, O’Connell St and so on are older than Nelson, Albert St et al? Complete guess, probably wrong.

          But the persistence in general of urban price relativities is always surprising. The general posh Eastern suburbs v not-so-much Western in Auckland is pretty amazing when you look at their relative accessibility. Consider St Johns v Avondale, for example.

        • Stu yes that’s true, Freeman’s Bay was a pretty rickety early colonial ‘working men’s cottages’ which reflected the tough industry around the shore, dominated by the timber processing operation there. And that quality crept up to the Hobson St ridge. You can tell it was a poor area because it’s had so much intervention, two big Council operations were built there. First the fume belching ‘City Destructor’ now Vic Park market then the huge city worskhops, further up the hill, now a huge car park operators land holding. In Freeman’s bay proper there were the Gasometres at the bottom of Franklin Road and of course the SH1 was cheerfully rammed through this ‘slum’. Back towards town and the west-side is still cut off and hostage to the all-but-in-name motorways of Hobson and Nelson, bringing their love and value all the way down to the waterfront.

          Frankly this area holds the great opportunity for urban Auckland growth. Physically it’s great, sloping to the west and meeting Vic Park at its western edge. But it has one huge problem, it is cut off and riven through by insane roading projects that have nothing to do with the place itself but are simply there to get cars from other places through or to the the tonier east side of the CBD. The Cook St off ramp is an obvious example; a crappier piece of place destruction is hard imagine. All the signs are there, a swooshing high speed one way new pattern stranding meaningless triangles of land either surrendered to car parking or sadly ‘mitigated’ with inaccessible landscaping. Land holdings, buildings, and the old street pattern chopped and isolated rendering them difficult to improve; prisoned in low value. And all those flying lanes breed more crazy traffic engineering in attempts to get the local roads to fit in with its parasitic new host. Bonkers oneway systems always involving counterintuitive driving directions in order to maintain higher speed merging forcing long work rounds in the name of driving efficiency [how insane is this thinking?]. As for pedestrians? Are there any?

          Just close the Cook St off ramp and see this are improve. Two way the Hobson Nelson traffic sewers.

          • David O

            That thinking is still in full effect out west today. I just recently saw (from my car… oops) the underside of the Vic Park flyover, where they’ve supposedly made it more pedestrian friendly and ‘landscaped’ it. Moonscaped more like. Hard to imagine a less inviting urban space. I think the big Auckland story of the next 20-30 years is going to be the steady move west of the CBD – counterbalanced perhaps by the changes in Newmarket due to the University’s arrival out there…

  • Peter M

    The anomalies in the value map are interesting. Compare Quay Street east or west of Queen St.

    Also compare further up Queen Street how much higher values are on the east side of the city than the west.

  • Great post Kent.

    Also really interesting to see the value of the area that Patrick calls the High St hinterland.

    • Kent Lundberg

      Yes, that post and the comments inspired me. That area contains a place premium. While retail may be struggling now- you can bet it will adapt to meet the current conditions. This is why I am fascinated by things such as micro-retail, foodcarts, etc, They are an response to high foot traffic and high real estate environment. Seriously, how narrow are these places getting now. They are literally plugging into the value of the streets. Love it.

      • JeffT

        On the foodcart topic Kent, I love the Saturday morning market in place a few streets behind britomart selling food from different nations: italian, french, paua and mussel fritters, sometimes jazz music. Just great and a great community atmosphere. These activities are away from high foot traffic areas but still contribute to providing services for inner-city residents as well as drawing more people into the city.
        Also great to see some weekends ago, the painted character mime street-performers so common in international cities. These kinds of activities make the cbd retail area popular compared to the suburban malls and work whatever the economic conditions.

  • Any chance you might extend the analysis past the motorway to the wider central area? Stopping at the near edge of the moatorway undersells the blackness it creates.

    • Kent Lundberg

      Yes that would be interesting, I’ll have a look. Might be tricky moving into suburban residential real estate values compared to a more generic central city urban land value (the city centre is a concise study area, unfortunately).

      • Would also be interesting to have a look at how it compares to the other Metropolitan areas as set out in the Auckland Plan i.e. New Lynn, Takapuna, Manukau, Albany etc.

        Also how did you determine the values? land value by the size of the site and/or the amount of street frontage?

        • Kent Lundberg

          I calculated value as land value/area. This tended to be similar over adjacent properties (as you would expect). I took some liberties in places with alleys and in places that i couldnt calculate value easily. I then applied this per m value to the street frontage. It was a quick study. Don’t go flipping apartment blocks based on the data.

    • Yes great work Kent, I too would like to see it extended to show just how poisonous and extensive the motorway stranglehold around our baby CBD is. Also a bit puzzled as to why you flipped the red/green coding between maps….?

  • St Nick

    Really interesting post, why is is that one side of Grey’s Ave is a beacon of good value land, while mid-upper Queen St has a lower value?

  • M Juma

    I don’t think you guys get the point. You still need roads to get to ‘valuable estate’ otherwise, what do we just fly in and out?

    Maybe greater density yes, but motorways are still important to take huge volumes of traffic off local roads. As soon as the CRL gets built areas around Wellesley St. and Murcury Lane will shoot up in value!

    • Kent Lundberg

      “I do not see the purpose of the motorway essentially as being a kind of channel to allow more and more traffic to come in which then has to swallow the whole of the rest of the street system in order to get around. I see the motorway as being a concentrator of traffic leaving other areas free of criss cross traffic traffic filtering through them. The purpose of the motorway is to channelise and leave other areas free and i think that unless you can get use like this out of the motorway then I would say it becomes a doubtful proposition.” Colin Buchanan author or Traffic in Towns speaking in Auckland circa 1967.

    • Why is that M Juma. Take a look at Queen St, the reddest on the map. It has not a single driveway, loading dock or carpark building on it. The whole lot is car free, the fact that there is four traffic lanes on Queen St has nothing to do with the real estate on Queen St. Take that away and Queen St would be more valuable. Looking at the map above value appears to be inversely correlated with traffic provision. Something definitely happening from Nelson and Hobson.

      You need some road access for sure, but do we really need four lanes on Queen St, four on Albert, six one way on Hobson, six the other on Nelson etc etc.

      The Central Motorway Junction has very little to do with getting people to or from the central city, it is about linking together the strategic motorway routes. There are around 200,000 vehicles per day through that junction, about 30,000 of those go to the CBD.

    • Stu Donovan

      M Juma, you obviously get the “point”. What was your point again?

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