The COVID-19 pandemic and protests for racial justice have spurred the real estate community to more fully factor health and social equity into all aspects of urban planning, design, and development, according to participants in a webinar hosted in mid-November by ULI. The event focused on two new ULI publications, Health and Social Equity in Real Estate: State of the Market, from the Building Healthy Places Initiative, and Health and Social Equity in Real Estate: Examples from the Field, from the Greenprint Center for Building Performance.
The State of the Market report presents a snapshot of the growing awareness and adoption of practices supporting health and social equity on the part of real estate professionals, and identifies opportunities for further inclusion of such practices by real estate organizations. The report presents the first comprehensive and cross-cutting data on the real estate industry’s adoption of health and social equity–promoting practices, based on 2019 research conducted by the Building Healthy Places Initiative with support from HR&A Advisors and the Integral Group.
The Examples from the Field report looks at developments that have incorporated health and social equity principles into their designs and their policies, and identifies elements of the business case for doing so, based on interviews with 44 real estate stakeholders. Research for the report was conducted in 2019 and 2020 by the Greenprint Center.
A recording of the webinar, “On the Rise: Social Equity and Health in Real Estate,” is available on ULI’s Knowledge Finder, as are both publications.
Leading ULI member Eleni Reed, head of sustainability, Americas, at Lendlease, was moderator of the webinar, which featured Judith Taylor, partner with HR&A Advisors; Marta Schantz, senior vice president, ULI Greenprint Center for Building Performance; Joe Ritchie, vice president of development, Brandywine Realty Trust; Kelly Hagarty, director of sustainability, Clarion Partners; and Mine Hashas-Degertekin, associate professor, Department of Architecture, Kennesaw State University.
State of the Market for Health and Social Equity
Taylor, a contributing author of State of the Market, provided an overview of the report’s findings, pointing to an inextricable link between health, defined in the report as a state of complete physical and mental well-being, and social equity, defined as a state of just and fair inclusion in which all can participate and prosper. The purpose of advancing health and social equity together is to attain a state at which all people can reach their potential in both those arenas. The report, which was informed by interviews with health and social equity leaders and a survey that gathered responses from nearly 700 real estate professionals, focuses on four key topics—awareness, adopted practices, motivators, and barriers.
Taylor noted that though the 2019 research showed a growing awareness and adoption by the real estate industry of health and wellness practices, there was less awareness of social equity practices. At the time, nearly half the survey respondents said they were “occasional” adopters of both, but that incentives could lead them to more regularly adopt health and social equity practices; nearly 60 percent of those who never adopted such practices said they were interested in doing so. This interest has been significantly elevated by the pandemic and racial justice protests of 2020, which is likely to result in quicker adoption across all industry sectors, Taylor said.
The most adopted practices tended to require less time and fewer resources—those that address transit, walkability, biking infrastructure, and access to open space. Return on investment was a key motivator for health practices, and social equity practices were significantly motivated by social outcomes and reputational value.
“Many early adopters of social equity want to be seen as industry leaders, while private entities adopt health-focused practices to retain tenants and gain a competitive advantage,” Taylor said. Using the findings, the report offers recommendations on how to improve the uptake of health and social equity practices, including the creation of a toolkit. Such a toolkit should not to be used simply to “check items off a list,” but as a way for real estate companies to integrate best practices into their operations and fully engage with the community to “consider health and social equity beyond their buildings,” she said.
Drivers and Examples from the Field
Schantz said that the findings in Examples from the Field, which include early-stage metrics for industry adoption of health and social equity practices, offer insights into where the market in general may be headed in this arena. The report identifies five drivers for health and social equity:
- Occupant demand. An increasing number of tenants of all building types are requesting and valuing health and social equity initiatives.
- Community success. The more successful and prosperous a community is, the more financially successful the real estate in that community will be.
- Government incentives. Public incentives have a direct impact on the business case for investments in health and social equity.
- Competitive edge. Because health and social equity are so important, they are being embraced by real estate firms in order to boost their brand identity and gain a competitive edge by showing leadership in those areas.
- Building certifications. Building certifications and reporting structures are starting to provide some consistency and guidance on how the real estate industry can advance health and social equity, which is driving action.
“These drivers tend to be part of the value that real estate firms incorporate into their decision-making when implementing health and social equity into their properties,” Schantz said. “There is a lot more to it than ROI [return on investment].”
The report includes profiles of 17 companies, sharing how they have implemented health and social equity practices in existing and new buildings and how they are measuring impacts, she said. “What we are seeing is that the real estate industry is ripe for accelerated investment in health and social equity,” Schantz said. The companies profiled in the report can serve as a “starter for inspiration and justification” for other firms seeking to include health and social equity in their operations, she noted.
One significant finding from the report is that whereas individual actions drive change at the property level, a C-suite level of commitment is needed to accelerate health and social equity investments across portfolios, she said.
“While the COVID pandemic and calls for racial justice put the focus on health and social equity in real estate, this is not a blip,” Schantz said. “The industry sees that the market is calling for an increased emphasis on health and social equity in existing and new properties, and we expect that to continue.”
Ritchie discussed Brandywine’s commitment to health and social equity. (The company’s social equity efforts are profiled in the report). Brandywine, a publicly traded real estate investment trust with a portfolio that spans 24 million square feet (2.2 million sq m) across Austin, Philadelphia, and Washington, D.C., has made health and social equity part of its “ethos as a company,” Ritchie said.
“We are fully engaged in finding avenues to increase health and social equity while reducing our carbon footprint in existing and new projects,” he said. “We look at real estate as a bridge to the community, so part of our core strategy is to create healthy neighborhoods. We do this because it is the right thing to do, and because healthy neighborhoods enhance the value of our holdings.”
Ritchie described the company’s health and social equity emphasis at its Schuylkill Yards project in the University City neighborhood of Philadelphia as an example of Brandywine’s elevation of those priorities. Through intensive community engagement, the company identified neighborhood concerns involving gentrification and displacement, and created programs to address those issues, including assistance for minority-owned small businesses, job creation, and funding for affordable housing and housing preservation.
“Doing what we can to foster economic growth and social equity helps us to build stronger communities, and that reflects directly on the assets we own in those communities,” he said. Working with organizations already serving the communities helps build trust among neighborhood residents, Ritchie noted. “What we try to do is listen and understand what the priorities are for the folks in the neighborhood, and then we work with them to address those priorities. Taking those two steps will maximize the probability of success.”
Hagarty said that in the COVID era, health and well-being have become a larger focus at Clarion, a real estate investment management firm with more than 1,300 properties in the United States and Europe. (Clarion’s health initiatives are profiled in the report.) The company’s environmental, social, and governance (ESG) efforts started mainly as an environmental program, but have evolved to place more emphasis on the social and governance aspects of ESG, she said.
In 2020, Clarion adopted six sustainable development goals, pertaining to health and well-being, gender equality, affordable and clean energy, industry innovation and infrastructure, sustainable cities, and responsible consumption and production. “We felt it was important to align our own goals with larger global goals, as health and social equity are issues that affect all of us,” she said.
Clarion prioritizes healthy building as well as green building certifications; so far, it has obtained Fitwel certifications for 11 projects, Hagarty noted. This year, because tenant interest in health and wellness features has increased significantly, the company has expanded access to health-oriented amenities such as healthy food and outdoor space for safe socializing and exercise. In response to tenant feedback, Clarion is also offering programs that enhance community engagement by tenants, she said. “The key to success is to understand what tenants want. If you are not asking tenants that, you won’t be successful in your health and well-being program,” she said.
Hashas-Degertekin, who focuses on incorporating health and social equity in her teaching, research, and professional service in collaboration with local communities and various nonprofits, shared recommendations from the NAACP’s Centering Equity in the Sustainable Building Sector (CESBS) initiative. The initiative, which began in 2018, seeks to 1) make sustainable buildings universally accessible to all communities; 2) integrate equity-based strategies into building standards for sustainability; and 3) deepen diversity equity and inclusion in sustainable building professions.
Because sustainability is based on social, economic, and environmental factors, “nearly all sustainable building strategies could be considered equity building strategies—if they directly benefit people of color, people with low incomes, people with disabilities, immigrants, seniors, and others,” she said. “These groups are usually not the beneficiaries of green building projects unless they are mandated by policy or intentional measures to ensure that they reach those with the greatest needs.”
The CESBS initiative’s recommendations on including health and social equity in public- and private-sector green building strategies and programs include the following:
- Establish criteria for siting affordable housing that protects residents from proximity to polluting facilities.
- Expand the definition of universal design beyond accessibility for people with physical disabilities to promote mental and emotional well-being.
- Require all projects to include an equity-informed community engagement process.
- Reconsider the promotion of a police presence as a socioeconomic equity element for neighborhoods unless complemented by steps to eliminate discriminatory practices.
- Ensure that amenities offered on site at properties, such as healthy food, are publicly accessible to those who need them the most, and ensure public-realm improvements to the exteriors of properties.
The webinar was the latest in a series hosted by ULI to help members understand the role they can play in advancing health and social equity throughout the built environment.
Trish Riggs is a freelance writer based in Falls Church, Virginia.