Climate Risk And Real Estate Investment Decision Making

Author : Erin Rae Hoffer
Publisher :
ISBN 13 :
Total Pages : 211 pages
Book Rating : 4.:/5 (915 download)

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Download or read book Green Building Policy and Capital Investment Decision-making written by Erin Rae Hoffer and published by . This book was released on 2015 with total page 211 pages. Available in PDF, EPUB and Kindle. Book excerpt: Policymakers in the U.S. have taken steps to create systems and revise processes in order to reduce energy consumption and greenhouse gas emissions and slow climate change. Significant policy activity has taken place at the local level, and cities have implemented a variety of policies focused on the built environment. These policies range from financial and procedural incentives to formal restrictions and building codes, spanning changes in land use, design, construction and operations of new and existing buildings. The significant social, environmental and economic impact represented by these policies suggests the need for a thorough understanding of their effectiveness and impact. Policy which governs the built environment depends on the informed participation of businesses. Corporations occupy and invest in the urban environment through new construction or renovation. However, research has not yet examined the underlying factors and dynamics which influence the extent to which businesses adopt, promote or obstruct the sustainable building policy changes of the past decade. An investigation of this nature is especially critical as a new wave of regulatory changes oriented toward resiliency of the built environment is under consideration by cities and states. This dissertation focuses on the relationship between public policy and corporate decision-making and action. The overarching question of the study is, "How do businesses which affect the urban built environment through real estate property development and management respond to regulatory change affecting buildings?" More specifically, "How does the adoption of building rating requirements, performance-oriented building codes, or building energy asset labeling/disclosure programs affect the way companies assess, prioritize and implement investment opportunities and obligations?" Based on qualitative data derived from one on one interviews with professionals in corporate decision-making roles, I will argue that green building policy change is a mechanism which ignites a network of forces driving new business practices across a production ecosystem of companies linked by business relationships. In this ecosystem the real estate developer occupies a key role of marketplace initiator. The perception of regulation for developers is a significant factor in policy effectiveness. Due to the complexity of the process of production of the built environment, it is necessary to investigate the question at three levels - looking at the system of cause and effect as a whole as it is perceived by developers, delving into the behaviors of developers and allied professionals who operate within the system, and investigating the interpretations and responses to specific regulations which represent different approaches to the problem of climate change. The data on professional perceptions of policy and market forces depicted in the form of causal maps will show that the overall system of policy-driven practice change is understood as a structure dominated by two sets of forces - those of public interests expressed through policy, and those of the marketplace expressed in terms of supply and demand. The interaction of regulation and market influences the way that these forces impact the network of independent businesses which produce the built environment, the aggregated production ecosystem for urban buildings, and the way that individual professionals adapt and develop new practices in response to the requirements of regulation. The attitudes, beliefs of norms of different professional groups represented in the network from real estate investors to developers to designers to contractors influences the adoption of these new practices. The successful implementation of regulation requires that each participating company in the production ecosystem achieve a degree of practice change alignment, yet the data suggests that practice change propagates at different rates based on the readiness and expertise of companies and professionals who comprise the ecosystem. I will argue that causal maps combine with observation derived from the data to form a grounded theory about the way real estate developers experience practice change in three key aspects of their work, "Discovering Opportunity" - when potential projects are identified and prioritized, "Experiencing Difficulty" - when projects hit obstacles, and "Changing Practices" - the timeline over which regulations are internalized in a company through new processes and methods. Developers, as actors negotiating risks and competing to succeed within a marketplace governed by public regulations which protect the health, safety and welfare of the community, articulated a commitment to improving the urban environment through their work, and expressed understanding of cause and effect relationships and complex interaction between economic and social worlds. Real estate developers are positive about the prospects for change and for the collaborative working relationship between company and public agency which enables successful project realizations. Interviewees spoke about alignment of goals, in that developers and agencies share an interest in creating economic opportunity for the community. At the same time, both are aware that at times they sit on opposite sides of the table. As a result, this research has implications for the way that policymakers assess the results of green building policies and develop future regulation to drive the production ecosystem as a whole in positive directions.