Five reasons why place is a strong platform for positive impact

(And why we created FIX Impact Development.)

Why place-based solutions for impact
Overall, impact investing represents more than 20% of all professionally managed assets in the US, up 33% between 2014-2016.  Investments target diverse sectors and outcomes, including housing which is the fourth largest sector with roughly 12% share.  But real estate is essential to nearly every sector of impact and has the potential to have some of the broadest influence on social and environmental outcomes while creating positive financial gains.  Here are the specific reasons why FIX believes real estate and place are such strong platforms for impact.

  1. Increases innovation
    Real estate is like the processor of a computer, running in the background, core to its function.  Well-located and designed places can improve user efficiency, communication and productivity.  And its the driver of innovation.  The rate of innovation has been proven to correlate to the number of interactions we have with people outside of our usual circles or disciplines, also known as our “weak ties.”  These interactions form in physical spaces, rarely online and never in isolation.  Place accelerates serendipitous interactions and enables organizations across nearly every sector to improve how they function.
  1. Magnifies the multipliers
    The real estate sector alone represents 15% of the US GDP and directly generates millions of jobs.  But beyond that, real estate provides a secondary lift to local and regional economies by attracting employers which in turn attracts competing businesses, all of which buoys diverse strata of opportunity within services, retail, housing and other sectors.  For example, consider the impact of locating a large tech company, where every tech employee now generates five new jobs across the economic strata from doctors to service workers.
  1. Creates intergenerational impact
    Real estate and urban design typically have decade and often century-long lifespans, driving intergenerational impacts.  Poorly designed, located or programmed facilities can have lasting effects that perpetuate broken systems.  And the opposite is equally true where well-designed projects can have lasting positive outcomes, including through their adaptive reuse over time with new program.
  1. Ripe for disruption
    Buildings consume half of all the energy produced in the US and in their construction, produce more than 40% of our country’s annual 250 million tons of solid waste.  Any industry generating this much waste is ripe for disruption and even the smallest of improvement in efficiency will have massive positive impact.  Some of this innovation will come by way of advanced technology like new forms of carbon-sequestering concrete.  Others will come by way of remarkably low-hanging fruit like diverting beetle kill timber from forest fires and converting them into high-performing new building material using nothing more than glue.
  1. Readily-measured outcomes
    The impacts of real estate are readily measured, often longitudinally, simply given the static nature of place.  Buildings and their tenants are easy to find and track in both qualitative and quantitative analysis.  Building metrics, tenant and user behavior, effects on surrounding communities, and other measures to evaluate and shape projects against their intended outcomes.

See our other post on how we at FIX define impact and use place to create positive change.