Reimagining Real Estate 2024

Taken together, the calls to action outlined in this final section of the framework, which have long been recognized as essential, provide a strategy for advancing both private and public interests. This strategy assumes that goals can only be achieved at scale when they are shared and interests are aligned. Cooperation between the public and private sectors is essential for achieving meaningful progress. However, the gap between aspiration and achievement remains significant. Public agencies provide essential regulatory frameworks, incentives and funding, while private sector entities bring innovation, capital and operational expertise in support of execution. In housing, public-private partnerships can increase the supply of affordable homes by making use of incentives and zoning policies alongside private investment. Similarly, for resilience and sustainability, collaboration is vital for building infrastructure that can withstand climate impacts, reduce emissions and support greener urban living. This is work neither the public nor private sector can do effectively in isolation. By working together, the public and private sectors can bridge funding gaps, streamline project delivery and align on long-term objectives. Public sector actions: The public sector has an outsized role in shoring up the necessary conditions for private investment. The rule of law, including well-defined property rights, is foundational to investment in real estate and the supporting capital markets. Yet, a strong property rights regime alone will prove insufficient for measurable progress. The public sector will play an essential role in encouraging private real estate investment through the following actions: Clear and standardized regulatory frameworks: Governments must create and enforce transparent laws and regulations that protect property rights, streamline zoning and permitting processes, and reduce bureaucratic hurdles. This will lower the cost and risk of investment, making the market more attractive to private investors and a diverse range of capital providers. Legislation that varies widely from city to city and region to region, increases the compliance and reporting burden companies face. Moving towards standardization and simplification will ease these burdens and reduce the complexity in meeting requirements. Encouraging an information-rich market: Governments play a pivotal role in ensuring transparency and reducing information asymmetries across real estate markets. By supporting data accessibility, encouraging standardized reporting practices, and mandating disclosures, public agencies help create a more level playing field for investors, developers, and lenders alike. Such measures improve market efficiency, enabling all participants to make well-informed decisions and ultimately fostering a healthier, more competitive investment environment. Infrastructure development: By facilitating public infrastructure such as transport, utilities and public spaces, the public sector enhances the return on investment in collocated real estate. Well- developed, well-run infrastructure attracts private developers by improving accessibility and the overall quality of the locations it supports. Financial market stability and access to capital: Governments play a crucial role in facilitating financial market stability and ensuring broad access to capital. By implementing policies that encourage a diverse array of capital market participants – including banks, private lenders and institutional investors – governments help create a resilient financial ecosystem that can support real estate investment through economic cycles. Financial incentives: The strategic deployment of subsidies such as tax incentives, grants and discounted credit instruments can stimulate private real estate investment by improving the risk-return profile of projects, especially in underdeveloped areas or for projects aligned with public goals like affordable housing. These incentives lower the cost of entry for private investors and promote long- term investment. Economic stability and growth: A stable macroeconomic environment, including low inflation and sustainable growth, creates favourable conditions for capital inflows and real estate investment. Government policies, both at the local and national levels, that promote job creation, income growth, and overall economic health help increase demand for both residential and commercial properties, thereby attracting private capital into the real estate market. Regulation can also help stoke occupant and investor demand for more sustainable buildings, which is necessary to move the market and create a viable business case for decarbonization. Private sector actions: The task set to private market participants in this framework may seem daunting in scope and scale. In an environment characterized by evolving demand patterns and shifting capital markets, investors must devise and execute strategies where this framework’s pillars are integral drivers of returns rather than drags: Leadership and accountability: Leadership must clearly communicate the pillars as a priority and ensure they are embedded across different teams and within specific performance metrics. Aligning interests and incentives within organizations will help focus efforts across teams and drive internal collaboration. By working together, the public and private sectors can bridge funding gaps, streamline project delivery and align on long- term objectives. Reimagining Real Estate: A Framework for the Future 42