The debate around managing migration is often centered on the economic benefits that can occur from migration versus the pressure on resources that results, and real estate is very much at the center of this. Attendees of the 2017 ULI Europe Conference heard from a panel of experts from different fields about the challenges and opportunities that arise from migration, how these manifest themselves in some very different ways, and how the built environment can help mitigate these issues.
Conference delegates heard from Nicolas Bearelle, chief executive of Belgian developer Re-Vive, which is undertaking a series of innovative projects, including some in Molenbeek, the district of Brussels in the wake of terror attacks in Brussels and Paris in 2015, which has been rebranded Brussels West.
Re-Vive is working on projects that look to not just regenerate the physical environment, but also use real estate to tackle some of the problems of poverty and poor health outcomes that are consistently cited as being contributing factors to radicalization, particularly of young unemployed men.
“We are looking to take ugly brownfield sites and build inclusive, sustainable neighborhoods,” he said. “These are areas that have complex problems, are becoming more complex, and so you need a different approach.
“I’m in my 40s and I’m trying to think of new ways of doing things, and I’m one of the oldest people in my company. We have a lot of different skill sets—impact developers, demographers, prop tech experts—and we are trying to approach things in a different way. For example, at one of our schemes we have included a coding school, and are working with local people who otherwise wouldn’t have the means to get these skills and help them fill in the digital gaps in their knowledge and try to help them find jobs.
“We are working with micro finance firms and helping them work with local entrepreneurs to start new businesses. It is easy to work with global companies when you create a new scheme, but we want to work with local people.”
As well as a different kind of real estate, Bearelle said it was also trying to use a different type of financial model to create different outcomes for the areas in which it developed. “We are looking to use social impact bonds to invest in improving housing,” he said. “If you can improve the quality of people’s housing, then you improve their health, and that might help them find long-term employment, and so it reduces the financial burden on the state.
“We have also just closed our third fund, and are using evergreen vehicles and long-term rather than shorter-term funds. We want to create a good IRR [internal rate of return], but we don’t want to be driven by short-term factors. We want to improve our cities and our properties over the long term, and that is hard to do if you have to sell after five or seven years.”
Professor Michael Keith, director of the Centre on Migration, Policy, and Society at Oxford University, outlined an alternative view to some common perceptions about how migration is actually playing out in Europe, and particularly the United Kingdom.
“The population and dynamics of Europe are changing rapidly, but not in the way TV tells us,” he said. “There is a big movement from southern to northern Europe, which very much exceeds the number of people coming into Europe. What that means is the dynamics in northern Europe are being reconfigured.
“We need to recognize the diversity that exists within the migrant population, and what this means for economies. In the U.K., 25 percent of migrants are students, and that drives the economy—the Russell Group [of top U.K. universities] alone adds £4 billion to the U.K. economy. When these students are here, they spend; they don’t save. If you look at the real estate industry, student accommodation has been a big area of growth.”
One issue surrounding migration, which relates to real estate in particular, is the fact that the benefits and costs of migration are not evenly spread. “Most studies show that migration brings greater benefits than costs to a society,” he said. “But there are unintended costs and benefits, and they are realized unevenly. The negative externalities tend to be felt at a local or neighborhood level, whereas the positive externalities tend to be felt at a city or state level, so specific areas come under pressure and don’t feel they see the benefits. It’s the tension between those two things that is the most controversial.”
Yolande Barnes, head of world research at Savills, outlined the issues around the economic migration that has taken the form of urbanization, with large, economically successful cities like London drawing people from all economic strata from all over the globe, with their success then becoming self-reinforcing.
“Migration has a global impact, but it also has a city impact,” she said. “Population growth is linked to economic growth. The cities with growing workforces have the most economic success, and that attracts the most people.
“What every city wants is millennials, they are at the center of the global war for talent. But what we have been building in the 20th century—particularly suburbs and business parks—is not what they want. What they want is places where you can have human interactions, or a street as it used to be known.”
Barnes outlined two key trends that would occur in and around cities that are growing rapidly.
“First, there is increasing density,” she said. “And that isn’t about finding brownfield land which isn’t being used—London isn’t Warsaw, there aren’t lots of derelict sites waiting to be built on. But a lot of the housing estates built by councils in the 1960s were built at a time of depopulation, and they aren’t dense enough. But density doesn’t have to mean high-rise. Paris is a great example: it is an extremely dense city in the central areas, and it is essentially mid-rise.
“Also, we think there will be an increasing trend for dispersed cities, so that is building in areas where there is good public transport, or creative or technological hubs growing up outside of big cities, so Newcastle near Sydney or Margate near London.”
