The business case for healthy communities

The views and opinions expressed in this article are those of the author(s) and do not necessarily reflect the official policy or GRESB’s official position.

Over the past decade, public health research has established a clear and significant connection between where individuals grow up and their lifelong health outcomes. Across the United States, neighborhoods just a few miles away from one another can have average life expectancies that differ by up to 30 years. ¹ Growing awareness of this phenomenon has driven an intensified focus on how the design and operations of communities can not only attract health-conscious consumers but also expand life expectancy and enhance residents’ overall quality of life. 

But what, exactly, goes into creating a healthy community? With the wellness real estate industry valued at $134 billion, and expected to grow to $180 billion by 2022, this is a multi-billion dollar question. ² Increasingly, developers, property managers, and investors are looking for ways to leverage health as a tool to differentiate their projects. Homebuyers and renters consider a broad range of factors when deciding where to live, from crime rates to school quality to the cost of living. Over time, health has started to play a bigger part in this equation, motivating the real estate industry to prioritize health considerations within community design and operations, and apply third-party certification systems like Fitwel® in order to demonstrate their commitment to health. 

This article highlights examples of evidence-based, health-promoting strategies that are connected to growing consumer demand, and can strengthen the business case for healthy communities. ³

Walkability has significant benefits from both a health-promotion and profit perspective. When it comes to health, the walkability of a community brings opportunities for regular physical activity and social interaction. ⁴ In addition, walkable neighborhoods can diminish car use, ultimately reducing exposure to air pollution and other environmental toxins. ⁵ Combined, these impacts address the trifecta of physical, social, and mental health—all while enhancing sustainability. 

Meanwhile, market trend reports show a growing number of individuals and families seeking out mixed-use neighborhoods with nearby amenities and supportive pedestrian infrastructure, and recent studies demonstrate that people will pay more to live in houses with higher walkability scores. Estimates from City Observatory suggest that for each additional WalkScore point a property earns, the value of the home increases $3,500, mirroring similar findings from real estate analytics resources like Redfin and Zillow. ⁶ In fact, data from a recent Redfin study indicates that, between May 2012 and May 2019, premiums paid for homes in walkable locations rose more than those for homes located in less walkable locations. 

Public green spaces are in high demand, especially in urban areas

Open spaces, specifically those with greenery, not only encourage increased physical activity, but also promote social interaction among community members and can enhance civic trust. ⁷ ⁸ Access to green space has also been shown to have a significant impact on mental health outcomes. ⁹ One nationwide study from the United States covering >900,000 people showed that children who grew up with the lowest levels of green space had up to 55% higher risk of developing a psychiatric disorder, independent from the effects of other known risk factors. ¹⁰ 

From a market standpoint, analysis out of the UK found that urban green spaces were associated with a £2,500 increase in housing prices. According to data from the Office of National Statistics, homes within 100 meters of public green spaces had property prices that were 1.1% higher than properties that were located 500 meters away from public green spaces. ¹¹ 

Walkability and green space are just two examples among many strategies that can promote health while also supporting a project’s bottom line. In light of this, Fitwel introduced its Community Scorecard in January 2020, which merges the Fitwel Standard with the Center for Active Design’s (CfAD) neighborhood-scale expertise, drawing from distinguished, evidence-based resources devoted to improving health outcomes, including NYC’s Active Design Guidelines, ULI’s Building Healthy Places Toolkit and CfAD’s Assembly: Civic Design Guidelines—a pioneering study linking public space and civic life indicators. Building on this foundation, Fitwel Community offers a deep understanding of how neighborhood design and operations can improve all aspects of community health, and radiate positive impacts well beyond a project’s boundary. 

As a part of Fitwel’s Community pilot program, several projects have already applied this new scorecard and received Fitwel Certifications ranging from 1 to 3 Stars. One of the most recent projects that achieved Fitwel Certification is Kilroy Realty Corporation (KRC)’s One Paseo. KRC is a company very familiar with integrating social impact into their work through their involvement with GRESB, earning recognition as the North American leader in office sustainability since 2014. One Paseo in San Diego, CA is a mixed-use lifestyle center with 286,000 square feet of Class A commercial, over 600 residential units, and 96,000 square feet of retail space comprising shops, restaurants, and services—all connected by a complete network of fully accessible pedestrian infrastructure, and punctuated with outdoor unique gathering spaces programmed with weekly free arts and community events. One Paseo’s site design encourages a “park once” mentality, stimulating physical activity and encouraging social interaction. The site’s compact design is complemented by numerous health-promoting public realm amenities, including wayfinding, bicycle infrastructure, and pedestrian-scale lighting, as well as ready access to healthy meals through on-site retailers and an adjacent full-size market. Kilroy’s commitment to on-site environmental safety underscores planet and personal health, ensuring that operations bar exposure to harmful chemicals and products.   

“For Kilroy, working at the intersection of health, sustainability, and design is paramount,” says Sara Neff, Senior Vice President, Sustainability at Kilroy. “Our goal is to provide best-in-class environments that foster a true sense of place and support tenant well-being. Leveraging strategies based in evidence ensures that we maximize the health and happiness of our tenants, ultimately creating a culture that celebrates individual health, as well as collective community health.” 

In the coming years, demand for communities built to maximize health outcomes is only expected to intensify—as are the double bottom line rewards for those who are leading the way. 

This article was written by Sara Karerat, MPH, Senior Associate at the Center for Active Design.