I desperately needed to doodle. Or scream. Or just plain bolt the room (which I finally did). I was in Boston this past week, at a meeting of well-intentioned sustainable real estate developers and a nascent socially-responding financing group, talking about creating a different type of fund that would truly address environmental and communal needs. The intent was good. And yet here I was, a long way from home, listening to a highly self-regarded developer drone on and on about how his development would be the answer to everyone’s prayers, were it not for the perverse practices of the financial markets.
What is it about us real estate developers that makes us the wildebeest of the human kingdom, a cross between the narcissism of the master architect and the hucksterism of a used-car salesman? More to the point, at what point are we going to get beyond railing at all the damaging practices of our profession (and there are plenty) to embrace some of the big positive ideas now floating out there among policy-makers and thought-leaders?
To be fair, our meeting that day was moving us in the direction of “yes.” I think we all recognized, eventually, that we needed a funding mechanism that connected rather than siloed investors, fund managers, developers, and community stakeholders. And that rather than a short-term exit strategy, this fund needed to be flexible enough to stay invested for the long-term. And that this fund needed to be robust enough to provide not only equity and debt but additional tranches of capital to assist with community programs, land conservation strategies, and the like.
So, despite my general fidgetiness and lack of patience over being lectured to by one of my colleagues, we were making some ground. And, who knows, we might just come up with the Big Idea for responsible property investing. If so, it might well behoove us, for once, to look beyond the self-absorbed enclave of our own profession to some visionary concepts now being floated out there. I can think of 5 that merit serious attention:
- The creation of trusts for our commons ─ natural, social, and communal. The concept comes from Peter Barnes’ brilliant work Capitalism 3.0 (2006) and provides a roadmap for how to upgrade our economic operating system, serve as trustees for shared resources, and redress social inequities.
- Linking economic stability/job creation to a green agenda. This concept is already starting to get a good bit of play in the Obama administration. On the up side is the $100 billion of economic stimulus slated for green projects. On the potential downside is the Congressional Budget Office recommendation that we waive requirements for environmental review in order to accelerate infrastructural spending. The two need to go hand in hand. Van Jones’ recent book The Green-Collar Economy points the way for business-environment synergies.
- A strong carrot-and-stick governmental agenda on energy, adopting either Gore’s bold goal of 100% alternatives by 2018 or the still challenging goal of “80 by 50” (80% carbon reductions by 2050). An important voice here is George Monbiot’s Heat, which looks at strategies for the UK to reduce its own carbon emissions 90% by 2030. On the table are the following: a carbon tax or cap-and-trade policy, long-term dependable incentives for alternative forms of energy (while eliminating perverse subsidies for oil, gas, agribusiness), establishment of a federal renewable energy portfolio standard, tax credits and government loan programs for energy retrofits of commercial and residential buildings, investment in transportation infrastructure focused not on roads but mass transit, investment in a smart-grid system.
- Looking beyond national borders to global solutions, primarily by linking issues of poverty and basic health to environmental stewardship. The go-to read here is probably Jeffrey Sachs’ Common Wealth.
- At the other end of the spectrum is localization: Taking stock of the unique assets of place and people and leveraging local uniqueness to keep capital within a community for all in the community. Michael Shuman’s The Small-Mart Revolution and Wiland & Bell’s Edens Lost and Found provide good pragmatic approaches to shaping collective action at the local level.
Bottom line: There are some brilliant, positive, can-do ideas and practices out there beyond the narrow confines of my own real-estate profession. We simply need to shed our not-invented-here parochialism and embrace some of the best thinking coming from other sectors of society. Couldn’t think of a better time than now to make that happen.