Savills plc

07/23/2021 | Press release | Distributed by Public on 07/23/2021 02:56

Affordability and social impact are key to operational residential real estate

It was encouraging to discover that only 8 per cent of the 113 participants in a recent poll by Savills believe that there is a risk that Environmental, Social and Governance (ESG) legislation will make development unviable.

Nearly half (46 per cent) of the participants to our online poll, conducted during the launch of our Global Living Report, said they anticipated that complying with ESG rules wouldn't deter them from development, while 46 per cent claimed that it is 'too early' to say.

Participants logged their answers following a discussion by panellists about how the growing importance of ESG means companies creating residential properties need to make them diverse and sustainable.

The panellists argued it was the responsibility of developers to do the right thing, which meant building property for a range of ages, incomes and demographic groups. There is a need, they agreed, for residential property that is designed for all types of people, living in a range of locations, and with varying levels of affordability.

But without any universal definition of socially valuable real estate, it can be difficult to know how to measure whether a scheme is delivering genuine social benefit.

The World Green Building Council defines 'social value' as having been created when the built environment supports environmental, economic and social wellbeing outcomes designed to improve quality of life.

Furthermore, these outcomes must be the beating heart of residential real estate in its design, construction and operation.

Frameworks and methodologies to help map and identify a property's impacts (positive and otherwise) are rapidly evolving. Some are designed to help take a project straight to the data gathering and measurement phase of the process, while others allow for a more customised and strategic approach to social value creation.

Certifications like WELL, FITWEL, BREEAM and LEED have social elements in their criteria and could be utilised to increase social value outcomes.

There are also pre-designed social value measurement methodologies that identify quantifiable measures of social value and outcome. These can ascribe a monetary value to a scheme's social aspects.

This system will look at local skills improvement and employment, and assess a development's contribution to local social enterprise, charitable causes or the provision of community amenities.

One key principle of social value, however, is it is a long-term and dynamic process that involves multiple people.

Enhancing social value is an ongoing consideration for the entire lifecycle, and should evolve with it. Careful design and thoughtful handover policies will ensure that the beneficiaries, and understanding what is of benefit to them, is as important at the planning and development stages as it is during construction and operation.

Owners need to continually explore whether community facilities are being used, or if the lives of beneficiaries are being improved. Mechanisms must also be in place to ensure there is continuous review of how the needs of those people impacted are changing over time: this is one of the many golden threads involved in creating a tapestry of social value.

Further information

Contact Dom Orchard or Maria Garcia

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