The case for developer-led active transport investment

Private developers should prioritise active transport infrastructure (ATI) as a strategic investment

In a 2023 survey, the National Association of Realtors found that 79% of respondents cited walkability as “Very” or “Somewhat” important and that 78% would pay more for a home in a walkable neighbourhood (Tracey, 2023). Why is it then that developers are not treating active transportation infrastructure as a top priority investment?

In many Western societies post-WWII, urban and suburban development was primarily formed around privately owned vehicles. This change was brought on by significant public investment into motorway infrastructure, restrictive zoning laws and sustained lobbying by the oil and automotive industries. The result embedded car dependency into daily life and left a resounding impact on the design and function of built environments.

Today, with shifting priorities and growing concern for the climate crisis, a movement toward sustainable urban development has changed the way people are looking at transportation, public spaces and the role of private finance in urban development. More specifically, urban residents, city planners and policymakers are now demanding infrastructure that enables active forms of transportation, namely cycling and walking, to combat the threat of climate change and improve wellbeing in the built environment. This includes projects such as grade separated cycleways, pedestrianisation of streets, implementation of car-free zones and mobility hubs, all designed to create safe, convenient and low-carbon mobility in urban areas. However, this infrastructure requires significant investment that has historically been seen as a public responsibility and not as a private investment opportunity.

This paper will now explore why private developers should prioritise active transport infrastructure (ATI) as a strategic investment, while considering important implications for policymakers, planners and ESG-focused investors. ATI presents a clear opportunity for developers to enhance long-term asset value, improve the lived experience of users and demonstrate leadership in ESG performance.

The case for ATI investment

Capturing asset value

Property developers can capitalise on greater sale prices and rent prices by prioritising ATI in new developments and connecting them to wider ATI networks. These increased values are brought on by demand for walkability, protected cycling routes and car-free environments from urban inhabitants. Studies in the UK and USA have shown increased property values for developments near pedestrianised streets and cycling lane networks, highlighting how extra value can be extracted from these assets by investing in ATI (Hearne and Yerushalmi, 2024) (Dahir and Le, 2025). Furthermore, developers can charge higher rents in areas with ATI given that studies are showing how pedestrianisation and bike lanes are improving retail performance (Volker and Handy, 2021) (Transport for London, 2013).

Responding to changing consumer preferences

Evidence of demand for walkable, car-free environments is already evident in how people spend their money for leisure. Many people are willing to pay a premium to visit theme parks, cruise ships, shopping malls and university campuses to experience what many neighbourhoods currently lack. That being safe, seamless, and attractive environments built for people, not cars. The popularity of these destinations reflects a wider consumer desire for built environments that are safe, connected and car-free, a desire that can be me permanently through high-quality ATI. Clearly then, there is obvious incentive for private developers to put greater emphasis on investing into ATI as it maximises asset value, shortens sales cycles and preserves long-term asset value.

Enhancing liveability

Beyond financial metrics, ATI also plays an important role in shaping the liveability and connectedness of communities by prioritising people, not vehicles. Neighbourhoods built around ATI where transportation networks are safe, convenient and integrated foster greater sense of place that people are willing to pay a premium for (Brookfield, 2016). This is especially true for Millennials and Gen Z who are increasingly making a up a greater proportion of home buyers (Radian Group, 2022).

Why should developers lead?

To fully capitalise on the benefits of ATI, developers should integrate it into planning and design stages of their projects, rather than rely on fragmented public delivery. ATI has traditionally been viewed as the sole responsibility of the public sector, often bundled into municipal transport or streetscape planning. This outlook has made delivery of ATI projects slow, fragmented and reactive in nature, ultimately delaying potential for ATI to add value to new developments.

By acting early, developers gain greater control over how ATI is integrated into their specific site, enabling stronger placemaking, better design cohesion and a more tailored user experience. Proactive ATI investment also sends a clear market signal that a development is sustainable, liveable and forward-thinking, all qualities that create a competitive advantage in crowded markets.

Private sector participation in ATI can also catalyse public investment, as local authorities will be more inclined to expand or connect infrastructure when developers are willing to contribute upfront. This is primarily due to ATI’s known public benefits, such as reduced spend on public health, reduced congestion, reduced spend on road infrastructure maintenance and progress toward sustainability goals. Therefore, for private investors, being an early mover in catalysing investment into ATI offers more than just project-level value. It also represents an opportunity to influence broader urban outcomes and add city-wide value through positive network effects.

Mechanisms for private participation

It is already common practice for private developers to contribute to local infrastructure as part of planning obligations. However, this participation normally does not incorporate ATI and are often treated as procedural requirements as opposed to strategic investments.

A more forward-looking opportunity lies in Public-Private Partnerships (PPP) whereby a developer and public body co-finance and co-deliver an ATI project, sharing the financial risk and long-term value. This mechanism is particularly effective in jurisdictions that are already interested in large-scale ATI projects and need private partners to handle a significant amount of planning and investment. For example, connecting a proposed mixed-use development to the CBD with a grade separated cycle highway.

Another opportunity lies in developer led ATI investment outside the official site boundary. This can take the form of a developer directly and entirely funding a cycle lane to a transit hub, a pedestrian route to a school or a mobility hub outside of the site boundary, for example. Making this kind of investment creates more value for the development and bypasses any inefficiencies that may come along with working with a public institution on a PPP.

Concessional loans and risk guarantees offer another promising mechanism as they reduced the initial financial burden of developer-led investments into ATI. Normally conducted between public lending agencies or green financial institutions, these mechanisms help mobilise private capital by sharing risk and upfront investment to enable large-scale ATI projects to move forward. Concessional loans and risk guarantees are already being used extensively in the renewable energy sector and other urban improvement projects like affordable housing. This mechanism improves financial clarity and will make ATI investments even more attractive, ultimately helping make cities more liveable and sustainable.

Reputation and gentrification

Investment into ATI also represents an opportunity for private developers to signal their climate leadership and commitment to sustainability. This can help differentiate their brand to attract ESG conscious buyers and even strengthen relationships with local authorities leading to goodwill during future projects. Therefore, beyond the obvious value addition benefits to investing in ATI, there are additional benefits justifying these investments even more.

However, concerns over equitable urban development have been raised due to gentrification brought on by rising property values and rents. Therefore, potential reputational risks can arise for developers being seen as driving gentrification in established urban neighbourhoods. To mitigate these risks, there should be active engagement between local communities, city planners and developers to ensure ATI improvements are delivered inclusively. This includes integrating affordable housing into masterplans, ensuring accessibility for different kinds of ATI users and tailoring ATI features to local needs. These actions together support long-term sustainability and economic goals as well as build community trust and project resilience.

Developers can’t afford not to invest in ATI

To conclude, ATI is not merely a public good, it is a private investment opportunity that delivers both economic returns and positive urban transformation. Developers who invest early can increase asset value, improve marketability, report stronger ESG performance and build meaningful partnerships with public sector bodies. As consumer sentiment continues to shift toward human-orientated environments, ATI is becoming a clear indicator for future- ready development. In a quickly changing world, developers can’t afford not to invest.

References

Brookfield, K. (2016). Residents’ preferences for walkable neighbourhoods. Journal of Urban Design, 22(1), pp.44–58.

Dahir, A. and Le, H.T.K. (2025). Impacts of bicycle facilities on residential property values in 11 US cities. Journal of Transport Geography, 123, p.104146.

Hearne, D. and Yerushalmi, E. (2024). The Amenity Value of Bicycle Infrastructure: A Hedonic Application to Greater Manchester, UK. Environmental and Resource Economics.

Radian Group (2022). Understanding the Next Generation of Homebuyers. Radian Group.

Tracey, M. (2023). Survey: Buyers May Pay More to Live in Walkable Communities. National Association of Realtors (NAR)

Transport for London (2013). Walking & Cycling: The Economic Benefits. Transport for London.

Volker, J.M.B. and Handy, S. (2021). Economic impacts on local businesses of investments in bicycle and pedestrian infrastructure: a review of the evidence. Transport Reviews, [online] 41(4), pp.401–431.

Authors

Tom Bonnor

Student from the University of Edinburgh Business School’s MSc in in Climate Change Finance and Investment