Sustainability in the Built Environment: Paths towards Healthy Growth
Our third and final research symposium of the MIT Center for Real Estate’s Summer Seminar Series took place on August 27, 2020. The Real Estate Innovation Lab hosted the event, which focused on sustainability in the built environment and paths towards healthy growth in real estate, design and planning.
The event was moderated by REIL Lead Technology researcher, James Scott, who began by introducing REIL Director Dr. Andrea Chegut to the forum participants. Dr. Chegut outlined the critical need for sustainable practices and design in the current economic climate, noting that a shift towards creating more health-centered communities will greatly impact our cities, our work environments and our overall livelihood in a Post-Covid 19 future.
Directly following these insightful research topics, a lively group discussion took place between all who presented and a number of MIT faculty professors and researchers, including Professors Siqi Zheng and Dennis Frenchman. While this discussion provided some unique perspectives and invaluable expertise, it further illustrated the importance of urban vibrancy and sustainability in the development of our buildings and cities throughout the world.
The first academic paper of the event was presented by Dr. Juan Palacios, who showcased the research that he and Professors Piet Eichholtz and Nils Kok produced, titled “Moving to Productivity: The Benefits of Healthy Buildings”. This work obtained data from 1,400 municipal workers in the Netherlands to understand the impact of indoor environmental conditions in the workplace and its effects on the health and job satisfaction of the building occupants. Using a fixed effects regression model, the researchers were able to compare the productivity and health of occupants in buildings that lack ventilation systems to those in buildings designed around the principles of natural circulation and sustainable technologies. The results demonstrate a 42% decrease in Sick Building Syndrome, a 1.2% increase in job satisfaction and a 2% drop in sick leave among occupants in Healthy Buildings.
Adriano Borges Costa showcased the paper “Roads, Transit and the Denseness of São Paulo’s Urban Development,” which he co-authored with Professors Christopher Zegras and Siqi Zheng. The presentation offered a unique insight into how modes of transportation – including bus, rail, roads, and subways – have impacted commercial development in São Paulo over the last century. This paper provided a great debate on how various transport activities create real estate development and which strategies to employ from both public and private initiatives to influence sustainable growth and urban vibrancy.
Anne_PredictingCityGrowthwithMachineLearningAnne Kinsella Thompson, in collaboration with Dongxiao Niu , Dr. Simon Büchler and David Maroti, presented “Predicting City Growth with Machine Learning.” Due to be finalized over the course of 2021, this study uses Wide Data to predict urban vibrancy in both China and the U.S. Using a lasso method approach, the research will explore numerous economic and investment factors to determine the cities and the industries with the most significant growth within each country.
“The Financial Impact of Street-level Greenery on New York Commercial Real Estate,” by Juncheng Yang, Helena Rong, Yuhao Kang, Dr. Fan Zhang and Dr. Andrea Chegut, is among the first of its kind within commercial real estate academic research. Presented by Juncheng Yang, this study uses machine learning image recognition techniques to understand the price differential on commercial assets with street level greenery, such as trees and grass, in proximity to the building. Calculating the average percentage of green pixels from collected Google Street View images while comparing it with rental data from Compstak, the researchers developed a Green View Index for the borough of Manhattan. The Green Index results indicate a positive transaction price premium between 4.7-6.3% for transactions in the highest quartile of street level greenery, giving real estate developers an incentive to align with landscape architecture and urban planning experts on this value-enhancing urban amenity.
The final paper of the seminar was presented by Dr. Andrea Chegut, who collaborated with Natasha Sadikin on “The Financial Value of Healthy Buildings”. In light of the current pandemic, this research serves to help real estate developers and owners better understand the financial outcomes of investing in a nascent newly certified building product type known as “Healthy Buildings”. To investigate the impact of Healthy Buildings, certified Healthy Buildings were matched with nearby control commercial buildings in the same 250 meter block. Though not yet finalized, the preliminary financial findings suggest that Healthy Buildings are indeed similar to Green Buildings’ rental outcomes, with a 4.0% higher effective rent per square foot than non-Healthy Buildings, for the Top 10 U.S. markets.