Development, social impact and behaving decently

As Landsec readies a £2bn-plus residential platform, Martyn Evans, creative director at the REIT’s Landsec U+I division, says a focus on social impact will be a defining factor in getting it “disastrously wrong or spectacularly right”. Speaking to Estates Gazette at an event organised by mixed-use developer Socius, Evans said “If you build hundreds and hundreds of build-to-rent homes in great big towers in dense clusters, you’re creating communities. And you will not do your business very well if you don’t imagine how socially impactful those communities need to be successful.” For Evans, social impact is a unique selling point in Landsec being chosen for public-private partnerships, as well as attracting tenants and buyers. “We’re in a competitive business, and we want to sell our property to customers who have quite a lot of choice,” he added. “And to behave decently is good for business, because many of our customers, our attendants, are decent people too. They want to buy somewhere or rent somewhere that is done well, with good thought.” Good versus bad Barry Jessup, managing director at Socius, said messaging from the Trump administration in the US would colour conversations concerning the importance of social impact in development. “The elephant in the room, given political changes across the pond and some of those shifts, is if the idea of embedding social impact through development has had its time?” Jessup said. “Are people really interested in it anymore? I can categorically state that it remains as important now as it ever was. I think it remains just as important to investors and ultimately occupiers too. “All the investors we are working with have not slackened at all in their resolve to try to make sure the money they are spending has a broader benefit.” Evans said a problem in what real estate developers call “placemaking” is that the creation of social impact becomes its own “work stream”. “I think that’s wrong,” he added. “I think there are only two types of development: good development and bad development. And when you develop well, you make good places. When you develop bad, you don’t. So it’s about defining what good development is. And good development is a place that works for the community and the society that’s going to use it. That’s everybody.” For Evans, that includes building places for “the people who have all the money, who can buy the penthouse flats in the tall, beautiful tower blocks and the big corporates who rent all the floors in the big fancy offices, as well as the nurses and the poor families on low incomes”. He continued: “We are way past the days of sticking all the social housing tenants in a block around the corner where they can’t be seen. We understand now that mixed communities are the best communities. And so we have to take this idea about what social impact we are creating into the heart of what we do.” Evans also sees social impact being a particular selling point to banks and financial services players that real estate companies must deal with during development. “Banks and financial institutions have really sophisticated social impact programmes,” he said. “And they want the people that they do business with to behave in the same way. When you’re a bank, it’s not as easy to embed social impact into your business as it is if you’re a property developer. Because it’s what we do. We make streets and buildings and shops and hospitals and doctor surgeries and flats for people with no money and homeless shelters. Banks fiddle around with money and then they have a surplus and they decide to give some of that surplus to some decent operations.” A line in your appraisal Evans sees the result of social impact and creating mixed communities as “an investment in the end product”. “If you can understand that the more you do, the more successful your scheme will be, you can put it as a line in your appraisal,” he said. “You can see it as investment in the end product. And that’s got to work 10 times better than it just being something that you do because you’re a decent person and you want to contribute something.” Jessup added that the value of social impact as a selling point comes into effect more clearly with local authorities than any other entity. “The economic value of the social impact is if you can take people out of temporary housing or you can provide jobs – that not only comes with a massive human benefit, it also comes with a massive economic benefit as well,” he said. “Local authorities are interested not only because they have a role in society, but, frankly, they are interested because it will help their budgets. And when you go and sit in an office with somebody from a local authority and you’re starting to have a conversation with them about taking some land and making use of it, if you’ve done your homework right, you go into that meeting with a list of things you know that local authority wants. So you know exactly where the joblessness is, where the housing need is, what opportunities, training and job employment opportunities that young people want, how big is their homeless problem, how big is their domestic violence problem. “Because all of those things, as long as you can just go, ‘tick tick tick’ when you put your bid together… it just makes perfect sense to address the problems that a property development can work to solve in a way that creates the greatest impact. Again, it’s good for business.” Image © Kathryn Chapman