While tenants and investors have long been considered the primary stakeholders in residential development, another player is increasingly becoming a focal point, and it’s one developers have historically had a tense relationship with: the local community.
Despite occasional town hall meetings and community engagement events to appease municipal concerns, communities have typically lacked an adequate voice in conversations regarding local development. As we grow a better understanding for the deep and lasting impact new residences have on a community, the onus is on developers to shift this dynamic and place greater emphasis on the needs and demands of the communities that support each new asset. This sentiment is echoed by ongoing and increasing demands for improved environmental, social and governance—or “ESG”—performance of assets, notably as this pertains to the oft-overlooked social component.
Through the ESG lens, we can critically evaluate how an asset affects all the individuals who are impacted by development, not just tenants. How will this building improve the region’s economics? What benefit will it bring to the area’s local businesses? In ten years, what will have made this development a better choice for our community than the many alternative options? These are the questions developers must prepare to answer.
Building Anchors, Not Islands
The greatest barrier to successfully developing connected communities is a narrow focus on standalone development—a perspective that is all too common in typical design, construction and property management. When real estate professionals fail to take a step back and assess a new development in the context of its impact on the surrounding community, they risk overlooking the many opportunities beyond a residence’s four walls.
The activation of local businesses is an achievable and immediate pathway for developers to connect individual projects to the broader community. The pandemic’s impact on operations and communications with outsourced, cross-border vendors highlighted the potential for property managers to connect with solutions closer to home for support. Further, as tenants suffered through the isolation of the pandemic, many residences turned to local businesses like gyms and restaurants to launch digital programs and events as a means of engaging tenants and maintaining high morale. These types of partnerships emphasize the opportunities that developments and local companies can inspire by working in tandem.
At my development and property management firm, we believe that the strongest relationships between developers and communities are forged at the onset of a project and carefully maintained throughout every stage of development, from design through property management. We seek out connection with community staples such as municipal officials, local nonprofits and activists, and regional businesses and retail to engage with the overall community, earn their support and foster a sense of connection. This has been especially important throughout the pandemic to combat the risks of isolated living in a stressful time.
In one instance, we partnered with a local pizzeria and provided residents with pizza-making kits paired with digital instruction videos from the restaurant on how to assemble the ingredients. Our tenants loved the initiative as it offered a fun, simple activity to break up the monotony of quarantine. Similarly, the pizzeria was thrilled by the chance to interact directly with a building full of potential customers amid dine-in bans. This partnership was fairly basic to develop, yet provided strong dividends to all parties involved. As developers work to form community connections, they should remember that however small an action may appear, every little decision adds up when it comes to community development.
Another means of achieving successful connection to the community is initiating conversations that directly solicit the needs of the town’s residents. Listening is the best, and perhaps only, way to work collaboratively with the community and, subsequently, develop projects that best benefit all stakeholders. For instance, take a building’s amenities. Without talking to the prospective residents within the larger community, developers risk wasting time, space and capital on unwanted perks and/or unnecessary upgrades. Why put a swimming pool in a residence where only 10 people want to swim and the majority prefers a dedicated co-working space? Without working to develop a direct line of communication with the community, it becomes difficult to establish and—just as important—maintain the dialogue necessary to implement building features that will drive the greatest ROI, from both economic and social perspectives.
Community Growth Is Growth For All
Looking more widely at the impact of the pandemic, many regions have experienced a renewed sense of community, which highlights the ties between residents of a particular development and the community at large. Developers must remain cognizant of this tightening relationship, noting that current and prospective tenants are more aware of a building’s local impact than ever before, and that resident demands are increasingly aligned with the needs of the larger community.
As the residential development landscape grows increasingly more competitive, listening and appealing to local community members will serve as a significant differentiating factor and competitive advantage, especially as municipalities strengthen their own ESG commitments and standards. This will be of growing importance as the real estate industry’s booming conversation around ESG expands to become more holistic, encompassing greater expectations regarding social impact—most notably from investors.
To avoid the risk of overlooking stakeholder demands and developing subpar or even potentially obsolete assets, real estate professionals must seriously consider and deploy meaningful pathways to deliver more community-centric buildings.