Walkability and the economy

26 Aug 2014

Economic analysis prepared for the City of Melbourne's draft Walking Plan estimates that the walkability of the CBD is worth $2.1 billion to the economy.

The Pedestrian Network Analysis prepared by SGS Economics and Planning considers the value of walkability to the city economy.  It discusses the value of business agglomeration - the ability for knowledge intensive businesses to locate close together and interact with each other.  High value businesses locate in the city to be able to work with each other easily and access the largest possible pool of workers. 

SGS looked at the job density of the city and estimated the effect changes in walking connections would have on business ability to connect. In simple terms, if the time taken for every walking trip was increased (such as changes to light phasing or if walk speeds were reduced due to footpath congestion) then firms would be less inclined to interact with each other.

SGS estimate:

  • If the walking connectivity within the CBD grid was reduced by 10%, the value of the CBD economy would be reduced by up to 6.6%, or $2.1 billion.
  • Improving connectivity across King Street would add up to $400 million to the economy every year.
  • Existing CBD through block connections are worth over $600 million to the economy.

A separate report from Tivendale Transport Consulting on CBD Shared Zones looked at the value of shared spaces and laneways to the city economy.  It found that outdoor dining at a laneway café generates economic activity between $14,000 and $25,000 per square metre per annum. This figure doesn’t include the multiplier effect of additional employment.

Links to both reports are available on the City's Walking Plan webpage under Background Research.