Home Strategy Real Estate Possibilities For An Inclusive Built Environment In The Midst Of Current Real...

Possibilities For An Inclusive Built Environment In The Midst Of Current Real Estate Trends

Didhiti Bhoumik is Chief Administrative Officer at BLG, Canada’s Law Firm, where innovation is more than just a concept.

The year 2020 has been unprecedented not only because of the worldwide pandemic but also due to the reignition of movements across the country working to fight systemic racism in all facets of society.

At this point, many in the real estate industry are trying to figure out how their corporate real estate will look in the future. Will people work from home full-time, or will they adopt a hybrid approach? Is this the end of downtown skyscrapers of class A office buildings or a temporary decline?

Elsewhere in real estate, many are trying to figure out the future of residential. Will people leave the dense urban areas and shift to living in the suburbs — all while defying the urbanization approach many have worked on for the past several decades?

Will everyone quickly forget the 2020 pandemic year and go back to their previous way of living as if nothing ever happened?

While those in the real estate industry try to figure out the future of their built environment, it’s important to step back and acknowledge the forces of the past that created gentrification and redlining. Decisions leading to these outcomes are seen by many as mistakes. I believe we cannot afford to make similar decisions in the future. The first step to avoid repeating these decisions is awareness. Then comes acknowledgment. After that, each of us should take accountability to avoid repeating these decisions.

I believe time will tell stories, and as a human race, we will figure out an approach together. It will be a new living and working approach, and it will be different. But no matter what we do, we cannot start another beginning without lessons learned. With the many definitions of gentrification, it can be confusing to talk about it in the contexts of the built environment and displacement. 

According to Investopedia, gentrification is an urban development phenomenon marked by the rapid development of a city neighborhood in a short time — bringing the value from low to high. Oftentimes, the neighborhood’s residents are displaced due to the rising rents and living costs. This is the effect of the gentrification process. 

The other force from our past is redlining (paywall). In a simple Dictionary.com definition, redlining is described as a discriminatory practice. Banks, insurance companies and other players in the real estate industry refuse or limit their products within certain geographical areas. In effect, it limited where and what minority buyers could purchase. Today, a study shows that 74% of the neighborhoods deemed high-risk — where mortgages and loans were more likely to be denied — 80 years ago are low-to-moderate income today. 

Adding to the effects of both gentrification and redlining is the preference for urban renewal projects to take place in predominantly Black neighborhoods.

With the consequences of urban development processes and discriminatory real estate products in full view, the industry has entered into new trends in 2020. In the past several months, there has been an influx of movement from cities to less densely populated areas — much of it a continuation of trends already in motion. At the same time, there are corporations looking into the suburban market for a hub-and-spoke model.

These trends mean demand for areas within a 2-3 hour drive from major city centers. There will likely be a large amount of development in these areas. I believe these projects are needed, but when considering the built environment, it’s important to keep not only desired uses in mind but other factors as well. These include construction death rate, developer’s moral obligation, if any, government policies and other factors that help prevent extending the effects of redlining and gentrification. 

One way to balance the new demand with a desire to avoid repeating history is to borrow from the principles of sustainable communities. A sustainable community comprises of multiple human needs, not just one at the exclusion of all others. Sustainable communities are a cluster of people of diverse backgrounds, where all should feel safe and included. Every group should have a seat at the decision-making table. Economy, society and environment come together in sustainable communities to focus on long-term goals and future generations. 

The current moment gives meaningful change a chance. As many people figured out how to work from home effectively, leaders recognized higher productivity and the benefits of hiring top talent with flexible work arrangements. I believe we will see a shift in the built environment that focuses more on the countryside — anywhere that’s within a couple hours’ driving distance from city centers. This means residential and commercial footprints in cities may be smaller.

With this trend, retail and small business will also grow — helping to create a bubble of living and working. This does not mean the end of downtown office space. People will go back there for innovation, collaboration and mentorship — among other things. There will likely not be a sole focus on heads-down work taking place in offices and that work taking place every day. While building those new areas outside the city, some of which are occupied by mostly low-income households, it’s important for the real estate industry to consider focusing on three areas to help avoid repeating the past: radical inclusion in each sector, meaningful affordable housing and helpful regulation of Black, Indigenous and minority-owned property and business.

The year 2020 is unique in many ways. I believe the entire human society got a chance to reset. Real estate industry players now have an opportunity in light of current trends to reflect thoughtfully on the industry’s past and borrow from the pool of current ideas to build the future. With the opportunity many have had to look closely at the built environment around them, I’m reminded of lyrics from the song “The Gambler” by Kenny Rogers: “That the secret to survivin’/ Is knowin’ what to throw away/ And knowin’ what to keep.” Looking forward to the next decade. I believe many of us will figure out what to throw away and what to maintain — all while finding an ace we could keep.


Forbes Real Estate Council is an invitation-only community for executives in the real estate industry. Do I qualify?


Avatar

Must Read