ULI Reflects on the 50th Earth Day and Sustainability in Real Estate

For more information, contact Augie Williams-Eynon

A milestone like the 50th Earth Day is a great time to reflect: how far has the real estate industry come in the last 50 years in driving the built environment to become more sustainable, and where might we go in the next 50 years?

In the five decades since the first Earth Day in 1970, the Urban Land Institute has helped drive conversations among members on sustainability in real estate. From early discussions on limiting urban sprawl and protecting open space to today’s work promoting climate resilience, highly efficient buildings, and healthy, active communities, ULI’s role in the sustainability conversation has continuously evolved with the times.“ULI has made the implications of climate change tangible for property developers and owners, municipalities, and other professionals of the built environment,” according to Mary Ludgin, Managing Director and Director of Global Investment Research at Heitman and Advisory Board member to the Center for Sustainability and Economic Performance (CSEP) at ULI.

While environmentalists 50 years ago surely never imagined a global pandemic would provide a glimpse of what happens during a drastic reduction in carbon emissions, this temporary time of improved air quality may help motivate slow-adopters to understand the importance and value of a cleaner, greener earth.

Harry Frampton, former Chairman of ULI (2003-2005), notes that in the early 1970s, sustainability was already “part of the early DNA of ULI.” Members were contributing to conversations in the real estate industry about balancing growth with open space protection, often in the context of early master-planned communities that blended parks or golf courses, residential areas, and commercial centers – such as Columbia, Maryland or Hilton Head and Sea Pines Resort, South Carolina. At Sea Pines, developer Charles Fraser (celebrated mentor to four future ULI chairmen, including Frampton) preserved swaths of natural land for recreation, sited buildings away from sensitive coastal dune habitats, and built bike and walking paths all over the island to minimize the need for driving. These pro-environmental ideas were promoted at meetings and conferences as these planned communities sprang into being.

ULI’s work on sustainability grew from there. The late 1990s and early 2000s were “a decade of ULI leadership in the area of smart growth & responsible land use practices,” recalls Uwe Brandes, former Senior Vice President, Initiatives at ULI and current Advisory Board member at CSEP, and faculty director of the Urban & Regional Planning Program at Georgetown University and faculty director of the Georgetown Global Cities Initiative. For example, that leadership includes Ed McMahon’s landmark contributions in setting out the principles of green infrastructure and smart growth, and ULI’s early forums with the nascent US Green Building Council on the development side of green buildings.

2007 saw the founding of the Climate, Land Use, and Energy (CLUE) Initiative, run by Brandes until 2013. CLUE defined ULI’s first organizational statement on climate change and explored how real estate should respond. During this period, real estate leaders founded Greenprint in 2009 during the Great Recession as a way for building owners and investors to drive asset value by reducing carbon emissions across their portfolios, which eventually became a ULI-driven initiative for the global market.

CLUE’s legacy, according to Brandes, was reaffirming the real estate industry’s opportunity and responsibility to act on sustainability – through green buildings and, at a larger level, by affecting core land use decisions in cities and helping push for compact development that would drive down transportation emissions.

Then came Hurricane Sandy in 2012, “Superstorm Sandy shifted people’s consciousness,” said Brandes. The industry realized that “Hurricane Katrina was not just a one-off storm… we had entered a period where the foundational location decisions associated with real estate might embody unrecognized risks.”

Inspired by that shift, CLUE transitioned in stages into the Center for Sustainability and Economic Performance in 2014, which today includes three programs:

Greenprint is a cohort of highly committed owners, investors, and strategic partners dedicated to improving environmental performance in energy, carbon, waste, and water. Members work toward a collective target of reducing greenhouse gas emissions in their portfolios 50% by 2030, and are on track to do so. Greenprint provides thought leadership to the industry such as in a recent Advisory Services Panel in Toronto regarding the balance of sustainability and affordability in the city’s older residential towers, and in reports on emerging issues like the business case for reducing embodied carbon in real estate developments.

ULI’s Urban Resilience Program, which works to help members, communities and the public prepare for the impacts of climate change, was founded after Sandy; the program has quickly grown alongside the industry from a focus on recovery after disaster to broad considerations of climate risk in land use, building design and infrastructural investment. The program’s recent report with Heitman, Climate Risk and Real Estate Investment Decision-Making, represented one of the first indications that insurers are beginning to take climate risk into their dollars and cents account of how to price risk. An upcoming follow-up report will provide updates on new methods of risk assessment and valuation.

The Building Healthy Places Initiative (BHP) addresses the critical link between human health and the built environment in fostering thriving communities. The Initiative has been expanding on that perspective since 2013 through research and publications, convenings, and advisory activities—to shape projects and places in healthy ways. BHP has organized a webinar series providing thought leadership to real estate professionals and other land use leaders on the implications of COVID-19 to our industry.

Sustainability has become a key focus for ULI and will continue to be an essential part of ULI’s mission regarding the responsible use of land. The concept’s prominence can be seen, for instance, through the numerous sustainability and climate-oriented programs throughout the District Council and Product Council network: as Ed McMahon notes, ULI started with one Sustainable Development Product Council in the late 2000s, and since then consideration for sustainability and climate issues has been infused into virtually all councils.

According to Harry Frampton, local solutions and the power of ULI’s District Councils will continue to drive progress on sustainability into the future: “Soon we’ll see a whirlwind of solutions, starting at the bottom,” to impact local policy and practice in beneficial ways.

Uwe Brandes adds that this issue isn’t going anywhere, and that “We’re still at the beginning of embracing new forms of data, new forms of performance metrics, and the opportunity to tie these to existing and new forms of real estate finance.”

“ULI’s role going forward includes helping us visualize how the principles of resilience and sustainability can be woven into how we rebuild our economy and structure our society in the current pandemic’s aftermath,” concludes Mary Ludgin.

Resilience, sustainability, and health are now more important than ever. Increasing preparedness for sudden shocks, heightening the value of high-performance efficiently operated buildings, and creating public places that support walking and active transportation are just a few ways being “green” can drive the business case for sustainability in real estate. The last 50 years have seen enormous change in what it means to be sustainable – the next 50 will see even more.

To find opportunities for members to contribute to ULI’s sustainability work, please visit Navigator. To find examples of past related work, members can visit Knowledge Finder.

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