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How are Universities Recognizing Social Impact in Real Estate Education?

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I looked at 10 real estate programs in the United States listed in College Choice’s “Best Master’s in Real Estate Degrees,” and also included Harvard Graduate School of Design, as it is an adjacent player especially based on its proximity to MIT. I discovered a handful of real estate programs oriented toward social impact. Considering the emergence of the Environmental, Social & Governance (ESG) framework in real estate, I used this framework as a lens. I assessed program courses, content and instructors against ESG factors. For instance, did courses communicate environmental regulations per the US EPA? Did courses encourage collaborating with conscientious suppliers, or volunteering with non-profits? Did instructors underscore the importance of ensuring shareholder rights and practicing transparent accounting methods? You can view and / or comment on my findings here.

Real Estate by Creative Mania from the Noun Project

Of course, it is important to recognize the limitations of the ESG factors. The ESG framework is designed to help investors find companies whose values match their own. I employed the framework to pinpoint colleges whose values embody a commitment to social justice. In both cases, a stated commitment versus a realized commitment to ESG measures is different. For instance, “sustainable” companies might promote social impact investment without altering a single investment decision or portfolio construction of their own. In the same manner, “impact-oriented” graduate programs might advertise impact-focused education without changing their curriculums at the core. In addition, some companies and colleges might rank higher on the environmental scale, average on the social scale and lower on the governance scale. In general, applying the same set of factors to institutions with different student populations, different academic specializations and varied familiarities with social impact can be problematic. I do my best to keep this in mind.

Without question, there is an expanding focus on impact at both the academic and corporate level. There is a subsequent need for institutions and companies to take action. Universities assume a significant role in molding the next generation of real estate developers. The courses students take now inform their projects and processes later. So, I want to take a moment to reflect on my findings and brainstorm further.

Of the top ranked real estate programs:

  • MIT is home to the Center for Real Estate; Master in Real Estate Development; an overview course Mixed-Income Housing Development; and seminar Mediating Private Development with Public Planning where students consider the permitting process, public review process and how residents, activists and politicians leverage development projects.
  • Harvard hosts the Graduate School of Design; Master in Real Estate and the Built Environment; and course Developing for Social Impact where social impact means aligning financial and social purpose.

Both perform well according to ESG criteria. That is, MIT and Harvard consider how their students will manage social relationships — with workers, customers and their neighboring communities — and governance issues — with leadership, shareholder rights, salaries, audits and internal controls. Though, the Cambridge-based institutions recognize public and private interests as being at fundamental odds with one another. To that end, their courses are marked with “mediation” or “alignment” language, and do not reconcile public and private interests / do not recognize such interests are not in complete opposition.

“Our MRED+D incorporates finance and innovative design to prepare real estate development professionals to build sustainable, equitable, and prosperous cities. Our curriculum covers the fundamentals of real estate […] we include ‘design’ in the degree’s name for a reason. The MRED+D program [links] real estate to the world of design based on two convictions. One is that successful real estate development requires excellence in urban design, planning, and sustainability. The other is that design thinking — the iterative process of problem finding, prototyping solutions, and iterative critique — is fundamental to producing the most valued and valuable real estate projects.”

Its courses include Principles of Sustainable Real Estate Development to explore green building / LEED building practices and to implement infrastructure strategies with regard to energy consumption, water consumption and climate change adaptation; Public-Private Partnerships, Strategies & Tools; Integrated Development, Architecture & Urbanism where students map how development companies have long contributed to the simultaneous construction of valued towns and cities as well as neglected slums and urban landscapes; Sustainable and Resilient Development & Design; and Development & Design Studio where students collaborate with real clients, real estate professionals, public officials and nonprofit organizations. In all, UCB sets a far higher standard. In accordance with the ESG framework, the College of Environmental Design considers how development companies and developers themselves are stewards of nature; smaller segments of larger communities; and, as such, must be held accountable.

Network by Gilbert Bages from the Noun Project

MIT, Harvard and Cal are all elite institutions with far-reaching, academic influence. The makeup of their real estate graduate programs indicate the academic foundation of burgeoning real estate professionals. So — in terms of merging social impact with real estate — we are off to a good but slow start. Columbia, Georgetown, UCLA, UPENN and other schools are thinking about human and environmental impact too. But, most courses limit the discussion to affordable housing and mixed-income housing at the moment. The reason being there are few resources from which to draw. Still, we should challenge prominent institutions to expand content-wise. For instance, there might be just a handful of well-known sustainable development projects on which to reflect. But, there are creative benefits to exercising forward thinking. In addition, there might be incomplete measurement tools including ESG, MSCI and Sustainalytics. But, again, this gives us great opportunities to grow and grow on our own accord.

To get the ball rolling, here are some of the questions I would want to cover:

  • How might we expand who is doing development? There is room to further engage underrepresented communities in being developers.
  • How might we as developers address the needs and opportunities of the communities we enter? Conducting needs assessments, forging local partnerships and / or considering development deals’ long-term impact in place of long-term profit is a start. What are the tools for understanding this in both quantitative and qualitative manners?
  • What might development deals look like in terms of finance and ownership? Knowing what grants, subsidies and their respective challenges exist is essential given funding is shifting toward projects with social and environmental impact. This has critical implications for how development is done.
  • In addition, there is space to reimagine who influences the development process and how ownership contributes to deeper investment in development value.
  • What would development projects look like with regard to ethical, technological progress? There is a clear rise in the use of technologies, such as facial recognition software, in the development realm. There is a need to understand the simultaneous benefits and shortcomings in the application of new technologies. Organizations like the Algorithmic Justice League look into how artificial intelligence, facial recognition, etc. reinforce paternalistic patterns. These are models we can learn from, and pitfalls we should steer clear of.

In all, the ideal developers and developers-in-training would take courses in and outside of business and real estate; gain on-the-ground experience; give voice to public residents, officials and stakeholders; and make room so that social impact shows up in undergraduate and graduate programs, business and non-business schools alike. Graduate programs like that of MIT, Harvard and Cal would build upon their strengths and reflect the growing momentum of social impact occurring outside of their universities. There are numerous opportunities to improve real estate development education.

Collaborate with me here or in the comments below.

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