Statement on Diversity, Equity, and Inclusion

How broadening access to real estate improves outcomes.

The design and development of the built environment is biased, and the expanse of that problem is immense. From 1900 to 2020, the global population quintupled. The design, real estate, and planning disciplines produced 50 million buildings to accommodate this growth in shelter and production facilities.(1) Over this time period, the principals in design firms, the financiers at the negotiation table, the engineers in the lab, and the construction managers at the site were predominantly Caucasian men. I take these heuristics, in the absence of data, to imply that the baseline perspective on cities and economies was uncritical of the predispositions of those men who voiced it. Further, data from the Bureau of Labor Statistics on Labor Force Participation Rates, showcase slow female labor force participation gains over 1950 to 2020, reaching only 54.6 percent (to men’s 66.2 percent) as of March, 2021.(2) Additionally, the proportion of women in leadership positions within the labor force by most accounts remains limited. For women in the decision-making C-suite, there is just 21 percent female representation. For women of color this number drops to just three percent.(3)

To be clear, there is little evidence that the female perspective was never endorsed or championed (and similarly for people of color or non-binary gender and sexual orientation), but there is evidence of a tumultuous and suppressed history. The absence of those perspectives and lived experiences from past bodies of knowledge now presents to us an opportunity to include them in a broad and diverse conception of what buildings and communities could be. From my position, I argue that these structural inequities have limited economic growth, financial performance and the true potential of place-making. My job as an educator and a researcher is to highlight inequity, disclose bias in our modeling and teaching practices, and elevate human diversity in every way possible through my leadership positions.

The real estate discipline is not alone. Dr. Janet Yellen and U.S. Secretary of the Treasury recently noted that Economics has a significant gender diversity and inclusion challenge. A count of economists on RePEc Author Services, as of May 2021, found only 26 percent of authoring economists are female.(4) To explain this, Dr. Yellen hypothesized that the way Economics is taught at the undergraduate university level discourages women from participating and that this may indeed be systemic. In an NBER study, Dupas et al., (2021) found that women are treated differently by being asked more questions overall, and more hostile and patronizing questions, at conferences and academic institution seminars.(5) Personally, my experience and that of my minority students has been similar. The following movements and conditions have elevated these concerns to the front of our cultural consciousness and debate. From “Me Too” and “Black Lives Matter” to “Stop Asian Hate” and a global pandemic, the background atmosphere of my academic community and industry colleagues has become restless and attentive. As a team, we strategize to combat this systemic bias, but that is merely a long-run strategy of debate; we must do more.

From a personal perspective, I was the third woman to graduate with a PhD in Finance in my department, and the first female PhD student of my supervisors. When I sat in finance research seminars, presented or asked questions during my PhD and post-doctorate at MIT, there were rarely women in the room outside of administrative services. Further, there was rarely a person of color or of an openly different sexual orientation in the room. My role on the Diversity, Equity and Cultural Board within my department has asked that I take on these leadership positions in my role at the Center, but this can be confronting for some. Further, my experience has been that these diversity meetings can even constrain change, as they are meant for the so-called ‘diverse’ and not everyone. For example, I was once asked to take part in leading a women in real estate leadership event. Coincidentally, or not, the executive board meeting for the organization historically met at that very same time during the event. This signaled that the meeting was not for everyone and likely that there were no women on the executive board.

Beyond representation of diverse voices, the discipline itself may have more systemic issues with inequity and inequality. Another NBER study, by Michelman, Price and Zimmerman (2021) followed Harvard graduates in the 1920s and 1930s to now, and found that access to private and elite high schools and social clubs raised the rate that they would work in finance by 41 percent.(6) Robustness checks for this research finds that even graduates from 1990 have the same practices.

What happens when the dominant perspectives of a field, and an industry, are so homogeneous? The economic answer is alarming. According to the Federal Reserve Board, participation by women in economic growth has led to a GDP expansion of ½ percentage point per year.(7) Socio-cultural homogeneity is also expensive — in a measure of capital expenditures, R&D expenses and acquisition spending, firms that had less diversity in thought performed better, as measured by revenues.(8) Further still, a literature collection of 42 peer-reviewed academic and consulting studies identify a positive correlation with various financial outcomes, including firm ROI, EBITDA, private equity investment performance, and most balance sheet metrics from revenue to Tobins Q.(9) In a review of this literature, I found that a principal interpretation of their results is that diversity is correlated with extending the margins of new products and opportunities to meet the full spectrum of human experience — very simply, by broadening the inclusivity of your product, process or building, the greater your financial potential.

The financial cost of these practices to the discipline of real estate are significant. People of color, and principally black Americans, were prohibited from the decision-making table, let alone access to financial equity, for the first 188 years of this country’s history. Even after the passing of the Civil Rights bill in 1964, black Americans have less access to capital, lower appraised property values, less access to parks and amenities, and even greater proximity to hazards, due to blatant prejudice in financial practices and urban planning. While the history of residential property is foundational to understanding wealth inequality, a significant gap in our knowledge occurs when we focus on commercial real estate.

Desmet and Rossi-Hansberg (2012), noted that in the long-run, all returns from innovation and technological advancement flow to the landowner.(10) If this economic thesis in this ground breaking American Economic Review article is empirically accurate, then one of the greatest generators of wealth, gender and racial inequality may be in the commercial real estate sector. As an expert in commercial real estate and data driven research, I can’t confirm this for our discipline — yet. Commercial Real Estate is systematically more valuable than residential real estate, and at the same time considerably less transparent. Shell companies and complex capital structures purposefully disguise the backgrounds of property ownership. This means we are currently unable to measure, let alone analyze, the accessibility of financial returns from commercial property to marginalized groups.

In this way, my role as a leader is to elevate these challenges and measure the impacts of the inequity of human experience upon the built environment. From a research standpoint, I have the stamina and skills to develop a data architecture, identification strategy, and modeling framework to begin to answer these questions for commercial real estate. My hypothesis based on the existing diversity literature is that the lack of transparency in commercial real estate may be as expensive as our inattention to environmental and technology indicators. As an educator, I’m already tackling these challenges, but there is always room for growth. In my Data Science for Real Estate courses, we systematically address the bias in the financial data sets we are observing in financial data science. Within the framework of my courses, we help students to learn these techniques not just so they can acknowledge bias when homogeneous representation is present, but further, account for the financial risk, or even potential returns, when those biases are absorbed or overturned in progressive real estate practices.

We have a great more to do as a discipline to make finance a sustainable discipline for everyone.



1. Unfortunately, we don’t have an exact count of buildings that were designed and developed during this period, a rough estimate is at least 50 million globally, stemming from the US, Europe and China stemming from the authors calculations in Innovation in Commercial Real Estate. 
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5. Dupas, Pascaline, Alicia Sasser Modestino, Muriel Niederle, and Justin Wolfers. Gender and the dynamics of economics seminars. No. w28494. National Bureau of Economic Research, 2021. 
6. Michelman, Valerie, Joseph Price, and Seth D. Zimmerman. Old Boys’ Clubs and Upward Mobility Among the Educational Elite. No. w28583. National Bureau of Economic Research, 2021. 
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10. See: Desmet, K., & RossiHansberg, E. (2012). Innovation in space. The American Economic Review, 102(3), 447-452.