Walkability and the Risk of Mortgage Default

A recent study strengthens the economic case for walkable communities, finding a strong inverse relationship between walkscore and risk of mortgage default.

2 minute read

April 2, 2014, 7:00 AM PDT

By AlisonBerry


recent study from University of Arizona professor Gary Pivo and strengthens the economic case for walkable communities. Pivo looked at the relationship between mortgage default and walk scores for multifamily housing. He found a strong inverse relationship: low walk scores were associated with high risk of mortgage default, and high walk scores were associated with low risk of mortgage default. The relationship was strongest at the extremes:

“Where walk score was 80 or more (out of 100), the relative risk of default is 60 percent lower than where walk score is less than 80. Where walk score is 8 or less, default risk is 121 percent higher.”

These findings turn common beliefs upside down, showing that the most walkable developments are not, in fact, risky propositions. In general, in the past, it has been more difficult to finance projects in walkable areas. There are many reasons for this, but it boils down to a perception of risk on the part of lenders.

For example, the mixed-use nature of the walkable neighborhoods—with both commercial and residential space in close proximity, sometimes housed in a single building—is considered more complex for developers, financiers and investors. This complexity leads to the perception of risk, although Pivo notes, it is “unclear exactly what it is about the projects that are cause for concern.”

Furthermore, demand for housing in walkable areas appears to be on the rise. Pivo cites a study from the Urban Land Institute which found that “demand and interest in apartments in ‘American infill’ locations remain hot.” Community preference surveys from the National Association of Realtors indicate increased demand for mixed use neighborhoods, transportation choices, and short commutes. The Sonoran Institute's  RESET study looked at six communities in the Rocky Mountain West, and found in most cases that people are willing to pay a premium for housing in compact, walkable neighborhoods.

So, research indicates that walkable housing is a lower-risk investment—there is consumer demand, and low likelihood of mortgage default. Walkability has also been shown to have multiple other advantages, like improved public health, reduced carbon footprint, and less pollution.

To promote walkable development, Pivo recommends that lenders offer better terms for mortgages on walkable properties. Developers consistently cite difficulty in securing financing as one of the biggest barriers to the success of mixed use and other walkable developments. It’s time to remove that barrier, and recognize the investment opportunity that awaits in these great neighborhoods.

Tuesday, March 25, 2014 in Community Builders Blog

portrait of professional woman

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching. Mary G., Urban Planner

I love the variety of courses, many practical, and all richly illustrated. They have inspired many ideas that I've applied in practice, and in my own teaching.

Mary G., Urban Planner

Cover CM Credits, Earn Certificates, Push Your Career Forward

Aerial view of town of Wailuku in Maui, Hawaii with mountains in background against cloudy sunset sky.

Maui's Vacation Rental Debate Turns Ugly

Verbal attacks, misinformation campaigns and fistfights plague a high-stakes debate to convert thousands of vacation rentals into long-term housing.

July 1, 2025 - Honolulu Civil Beat

Logo for Planetizen Federal Action Tracker with black and white image of U.S. Capitol with water ripple overlay.

Planetizen Federal Action Tracker

A weekly monitor of how Trump’s orders and actions are impacting planners and planning in America.

July 2, 2025 - Diana Ionescu

Map of Haussmann's redesign of Paris in the 1850s through 1870s under Napoleon III.

In Urban Planning, AI Prompting Could be the New Design Thinking

Creativity has long been key to great urban design. What if we see AI as our new creative partner?

June 30, 2025 - Tom Sanchez

Street with parking protected bike lane and parked cars in downtown Portland, Oregon.

Portland Raises Parking Fees to Pay for Street Maintenance

The city is struggling to bridge a massive budget gap at the Bureau of Transportation, which largely depleted its reserves during the Civd-19 pandemic.

July 8 - Willamette Week

Aerial view of Spokane, Washington with river in foreground.

Spokane Mayor Introduces Housing Reforms Package

Mayor Lisa Brown’s proposals include deferring or waiving some development fees to encourage more affordable housing development.

July 8 - The Spokesman-Review

Close-up on black and white "Bike Lane Ends" sign with bike logo.

Houston Mayor Kills Another Bike Lane

The mayor rejected a proposed bike lane in the Montrose district in keeping with his pledge to maintain car lanes.

July 8 - Houston Public Media

Urban Design for Planners 1: Software Tools

This six-course series explores essential urban design concepts using open source software and equips planners with the tools they need to participate fully in the urban design process.

Planning for Universal Design

Learn the tools for implementing Universal Design in planning regulations.

Associate/Senior Planner

Gallatin County Department of Planning & Community Development

Senior Planner

Heyer Gruel & Associates PA