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In popular culture and the popular imagination, a thriving business district has busy streets, a welcoming atmosphere, and a constant hum of activity. But too many main streets, downtowns, and central business districts (CBDs) don’t currently provide this environment, depriving businesses of customers, local residents of jobs, and local governments of tax revenue. However, a large body of economic development and transportation research points to specific characteristics of commercial performance. In order to thrive, business districts need to be walkable, reachable by transit, and dense and mixed-use.
Walkability
Walkability
Smart Growth America describes walkable places as “places that can be conveniently traveled by those using sidewalks, trails, and paths, using assistive devices like walkers, pushing strollers, or using some other means to get around without a car.” The benefits to businesses of being located in these walkable places are clear.
A 2012 study of people traveling by different modes in Portland found that people reaching their destinations by walking, biking, or transit spend more at local businesses than their automobile-using counterparts, because they patronize those businesses more frequently.
In 2015, the National Complete Street Coalition found that in communities of different sizes and different parts of the country, streets that had been redesigned to be safer for people walking had higher employment levels and more new businesses than comparable streets that had not been redesigned.
The 2024-2025 Open Streets: West Walnut program in Philadelphia led to significant increases in pedestrian activity, sales for participating businesses, and in-store foot traffic.
Furthermore, according to Smart Growth America’s Foot Traffic Ahead report, 19 out of the 35 largest metropolitan areas in the United States had a rent premium for retail in their census block groups that qualified as walkable places. Across all of these metropolitan areas, the weighted average premium for those retail rents was 41 percent. This has been a consistent finding since the first version of Foot Traffic Ahead was published over a decade ago, another piece of the long trail of evidence showing that being walkable helps business districts thrive.
Transit Access
Transit Access
No matter how walkable a business district is, in order to truly thrive, it needs transit access. Among the most walkable urban metropolitan areas, quality transit is a “key thread” because it allows even more people to reach walkable areas with no downsides; unlike when large numbers of people drive to an area, there is no need for additional parking facilities, wider streets to accommodate increased traffic, or a diminished experience for existing residents. Instead, there are just more customers, more workers, and more opportunities to thrive.
From major metropolitan centers to less-dense rural areas, transit is crucial to help workers get to jobs, and new individual transit lines can even increase the employment rate entirely on their own.
Transit lowers costs for travelers, both by reducing the cost of individual trips and by allowing some to avoid owning a vehicle entirely, which can save over $8,000 per year. In addition to reducing household pressure, this increases consumers’ disposable income.
Transit relieves congestion—with research estimating that highway congestion in Los Angeles increased 47 percent when public transit service wasn’t available—allowing more flexibility for the people and activities that require driving.
Density and Mixed-Uses
Density and Mixed-Uses
Even if business districts are walkable, in order to thrive it helps significantly to have customers nearby and multiple reasons for people to visit. That’s why density and a mix of uses—offices, residences, and different types of businesses—are crucial. These characteristics turbocharge the benefits of walkable places.
New York City’s creation of a pedestrian plaza in Times Square led to increased shopping in the neighborhood by local residents, additional lunch trips by local residents, and more time spent outside of the office by local office workers.
Research on rural small businesses during the pandemic found that small businesses in older commercial corridors and main streets, quintessential mixed-use areas, were better able to withstand the crisis than businesses in other locations. This was especially true for small businesses located near residential buildings and outdoor space.
These benefits extend beyond local businesses themselves and toward the local governments that support them through water, surface transportation, and electricity infrastructure.
According to a 2016 report, denser, mixed-use development patterns known as “smart growth” have lower up-front infrastructure costs, save local governments money on continuing to deliver services, and generate significantly more tax revenue than less-dense patterns.
A 2014 study found that land occupied by surface parking raised only 5 to 17 percent of the tax revenue raised by non-parking land uses.
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