 Welcome everybody. It's Gordon Clark from Oxford University beginning this webinar, this what is in effect today long event, honouring Patrice Darrington and her most wonderful book. With me as well is Richard Florida, who is the co-convener and co-conspirator about this project and as we go on we will have of course many others join us as speakers but also I expect the audience to build and build as we basically go through the process. There are quite a number of speakers and you might notice that I'm speaking to you from Oxford in the UK. We have one of our desk speakers that is a course from Belgium and we can go Belgium, Oxford, we go then to New York, to Illinois, to Chicago, to Los Angeles and Stanford. So we've got quite a spread of speakers here today and more particularly people who really understand Patrice's project which actually is quite remarkable on many dimensions, very crudely, size and scope really astounded me when I first saw her but equally she has said something fundamentally original about actually real estate and she's been a diligent historian bringing to the fore many aspects of the of the project that the book's based on and I don't think there's anything quite like it in the social sciences and that's saying a lot when you think of all the academics out there specialized in this kind of research. So welcome everybody and welcome to speakers, welcome to the audience, we've dived in for the occasion, welcome so I've caught Richard in dispose. So I'll turn it over to Patrice who will also say hello and also might make some remarks about where she started from at least very briefly historically speaking. Over to you Patrice. Thank you very much Gordon. I'm humbled by your very kind words of appreciation of this. Yes it was a long project but one I just thoroughly enjoyed. I'm sure like many people on this at this event and many many people worldwide we love real estate, we love talking about real estate, we love being in our buildings, we love arguing about it, you know real property the things we live in every day are very very exciting and and you know definitely material for lots of juicy comments. So having been fortunate to put together an education combining architecture and then an MBA business degree I have practiced in real estate for many many years. Then having the opportunity to go to an academic institution wonderful ones like New York University and then now Columbia University and be responsible for teaching young people young future professionals about real estate development. I realized how is it actually done. We go and do it, we try to do it well but have we ever really thought about what are the essential principles, what are the essential motivating dynamics of this activity. And so I started looking back to see where we were doing this, where it had happened and this took me way back to the 17th century and Covent Garden. Thank you for having me welcome. I'll turn it over to Richard who will now make something today. Oh I'm just sorry about that for some reason my connection dropped off for a minute so I ran the hearty speed test and found that I have enough bandwidth to carry on so thank you for bearing with me. I want to echo Gordon's comments. I well I've known for his treats for a long time we were colleagues at Carnegie Mellon at the beginnings of our career and I think somehow brought there together. We've never talked about that by one Gordon Clark an incredible person and an incredible scholar but an incredible majestral connector of people and human beings and scholars. So you know I have been an urbanist most of my career trained in Columbia University. Rutgers is an undergraduate Columbia University where Teresa is as an urban planner in the mid 80s. And late in life late in life late in an academic career I came to the belief that real estate was important to urban development. That sounds so simple-minded when I when I say it it sounds almost ludicrous but I took up an appointment and I believe Patrice also overlapped with me there as a distinguished visiting professor at the Shack Institute of Real Estate at NYU and I did that particularly to try to educate myself about real estate and I learned nothing and I'm not kidding you that I found in our field that there was there was commentary like David Harvey's important work on the spatial fix but there was very little commentary about the central role of real estate. And particularly in a knowledge economy there was the belief that real estate in space was no longer important and you know then Patrice's book arrived first into electronic format and then in analog format and I was literally blown away because Patrice brings real estate bring it she not only provides this incredible history she brings real estate back into our discourse and situates it where it should be at the center of urban theory and gives us she has I mean in many ways she's answered so many questions but I think Gordon would agree with this and many of you would agree that she sets the table for so many of us to ask other questions to think deeply about how real estate shaped cities and I would say even more than urban development shapes capitalist growth so I just want to echo Gordon's comments I'm honored and I feel honored and privileged to be involved I wish I could I love the city I love New York City even Gordon compared to Oxford to London it's still my favorite city in the world I wish I could be with you here there today but hope to be visiting with you in New York soon enough Patrice most of all thank you for making this important contribution and thanks to all of our our guests our distinguished participants our presenters for their incredible contributions great thanks Richard it's worth also saying that in bringing together the commentators today we were very we were mindful of the disciplines we were mindful of if you like the critical perspectives analytical perspectives that people bring to the table and and that I think is also some measure of Patrice's accomplishment here she's been able to talk to a lot of disciplines and a lot of scholars who you know on in their own fields may have made significant contributions themselves and as we went around recruiting people everyone jumped to say yes so it's quite quite a compliment personally and professionally one thing Patrice didn't mention was yes she was in industry yes she was in banks and investment groups on real estate and I think it's fair to say she met all kinds of people in that sojourn and I was I was particularly struck hearing one time a while ago a story about going to see somebody who actually owned a casino or seemed to own a casino I think it's actually more in the latter seemed to own a casino and seemed to owe a lot of money to banks and that man unfortunately didn't seem to become president but he became president it's just a shocker but there you go it's Patrice has seen rogues she's seen remarkably talented people on the investment side of things and she has also been able to conceptualize something whole that most of us otherwise look at in part so with that I'm sort of conscious of coming up to 45 minutes that is to say 15 minutes into the presentation we're going to of course start with the first presenter at 2 p.m eastern standard time I think I'm right no sorry at 9 I'm very confused at 9 a.m eastern standard time but before we do that we are also going to run a tape from Larry Summers professor Summers was very gracious in agreeing to make some preliminary comments he has also read the book unfortunately he can't be here today I believe he's in Singapore but nonetheless he is also a person enormously impressed by the book and enormously impressed by patrice's accomplishments so patrice how do we go about getting Larry in the frame so to speak to get him his comments displayed I'm delighted to open this symposium in celebration of patrice derrington's book built up you know there are important books there are deeply scholarly books and there are books that are fun to read there are not very many books that need all three of those criteria but at least for me this was one of them it's famously been said that we shape our built environment and then our built environment shapes us if that's even close to true developers are some of the most important people determining the destiny of our shared spaces therefore the destiny of our cities and therefore the destiny of all of us what they do and how they do it is profoundly important it's not just the stuff of abstract models or present value calculations it's the stuff of dreams persuasion sales motivation vision these are as important as financial calculation or carpentry or physical construction it's the great strength of this book that it tells real stories about real things and therefore makes the mechanics the abstractions come to life that's why I enjoyed reading it that's why it gave me a greater appreciation of the work of the developers I know that's why it caused me to think differently about the malls the buildings the office parks the projects into which I step and so I'm only sorry that I can't be present physically for this symposium I'm sure it will be as great a treat as reading this book was okay here we are again now I'm conscious that we are 10 minutes away now just or 15 minutes away from the schedule start so I thought in this period of time I might make some other comments and then get Richard and Patrice to also make some comments before we introduce our first speaker the first thing to say about this and sort of reinforce some aspects of the the debate about real estate and property in modern cities is the if you like the flux and flow of what happens in cities and in my own commentary I talk about how to conceptualize what happens in one neighborhood one part of a city as opposed to other parts of the same city and how they join together if not directly in terms of a joining land but indirectly in terms of the financial market pricing of one parcel of land versus another parcel of land and indeed actually what the future value is of that land looked in not just a local perspective but also in a global perspective and for someone like me who has been involved in urban research for many years but also as an investor through what a major institution in the UK in real estate it's brought home to me actually many of the issues that I hear investors come into our discussions and explain how they value one parcel of land over another parcel of land and it's really basic sometimes it's you know is the land situated in the right place and in the UK that means being in the midlands at the intersection between major freeways going north south east west but equally it's sort of very basic you know what what is the shell that is the the building on top of that land how does that have an intrinsic value does it have a use value is it actually not valuable at all except in the sense that it occupies a space land that can be converted to something else altogether and that's actually many respects what I learned from reading patrice's book that's sort of sense of contingency about land about property contingency on markets contingency on ambitions and aspirations of those people who hold property or will hold property in the long term the last comment I make about this is it's too often to think you know when you when you sort of speculate about speculators what they have in mind is is the return tomorrow or the return in a year's time the return in five years time but in London there are there is a landholder whose time horizon is almost infinite it could be a thousand years out so the crown estate thinks in terms of centuries has a rate of return target over centuries has a claim on space well beyond actually the building on the space which is either owned or leased by somebody else and to listen to how the crown estate thinks about urban space is completely different to a speculator thinking on the price of land today and tomorrow and the building that might reap a rent the crown estate in London around Covent Garden is also thinking about what's its intrinsic value over 100 years or 200 years how can we get people to pay not just for their current use value but actually their use value in 50 years or 70 years and indeed I'm in an organization that had to decide recently in response to the crown estate whether or not to hold the lease for 50 years or for another 100 years and we decided to hold the lease for another 100 years that says a lot about actually the footprint of human activity and how thinking about real estate is not only in the short term but it can be that enormous very long term and that's why I think Patrice's historical perspective is so revealing so revealing Covent Garden then and Covent Garden now these this is an expensive real estate was then was is now so I'll just pass it over with nine minutes to go to Richard to see if he has any last comments and then we'll take a brief comment from Patrice before we move on to Professor Derek Borzec. Of course thank you Gordon just a couple of comments on on my reading of why Patrice's work is so important as I mentioned earlier there are great predictions and punditry about real estate being no longer important an economy of innovation and knowledge and and in fact what's so interesting about this is that land or clustering or real estate have become probably more important to capitalist growth and urban development now than at any point in history and a couple of facts that I just included in my con commentary in the United States just four metropolitan areas the Bay Area New York Boston and Seattle accounted for something like 90% of all innovation job growth over the past couple of decades and across the world just six metropolitan areas the Bay Area New York London Boston Beijing and Shanghai accounted for more than all of the half of all the venture capital startups that have been created over the past decade Moreover there's a recent McKinsey report which I find really fascinating the study which just came out last week and was reported by a run-of-the-core in the financial times finds that real estate today comprises more than two-thirds of the world's entire net worth looking across 10 advanced countries the U.S. UK China Germany France Canada Sweden Australia and Mexico and in earlier study this one done about a decade ago the U.S. found that the total land value in the United States was 23 trillion now that's increased that's 160% of U.S. total economic output at the time a new study from Zillow suggests that the total cumulative value of U.S. homes is nearly 30 trillion also exceeding the total value of all goods and services produced in the U.S. so real estate and land is really important and also I think real estate is going through another that the the ownership their capitalist control of real estate is going through another transformation I think part of this we see as investors gobble up not just commercial real estate and multi-family homes but single family homes I forget the statistic but I believe it's a fifth of all home purchases over the pandemics were purchased not by individuals but by institutional investors and looking at a little further I think one of the changes we'll see if if if the 1980s and 90s gave rise to the securitization of real estate I think we're looking now at the digitalization of real estate coming pretty quickly and and so real estate as a basic asset class but one that's not only historical asset class so and it could be traded in new ways is really fascinating and just one remark on theory I cut my teeth as a kid at Rutgers and Columbia University on Marx and neo Marxism and theories of the state and theories of capitalist development and have been very influenced by Marx all through all of my career although taking a page from the great Christopher Freeman who I asked this when I was an assistant professor he said you may be influenced by Marx but if you talk about people like Schumpeter you get your papers published more easily so I've tended not to echo that so much in my formal writing but my insights have been shaped with Marx Marx and Patrice and I were talking about this and I think we want to do more to jointly understand this Marx more or less famously gave real estate short shrift and he lumped the world of capitalism I'm staying very crudely into a model where there were two great cap classes that drove the mode of production forward and in struggle capitalist and workers which was the end proletariat he didn't have much time for real estate and in the commentaries I've seen really derided it but the person who like Patrice put real estate at the center of the equation is Henry George and I've been paying a lot of attention to Henry George you know land was Adam Smith's first factor of production the classical economists like Cantillon developed the land theory of value recorder was Ricardo was very influenced by rent but it was George who put land at the center and real estate at the center and where Marx and I'll say this very briefly where Marx saw the capitalists as making off with the surplus generated by workers George and I'm not saying he's right in this but I think it's a fascinating view if you read his work very quickly and not just the book progress and poverty but the report he did before that which is trying to estimate US land values if you read that very closely what Henry George is saying is that it's real estate owners who make off with the surplus generated by both capital and labor and why I think that's interesting today is if you look at land values and real estate values in in superstars cities like New York or London or San Francisco or you look at land views values across the board it seems increasingly that much of the productive advance or innovative advance or surplus that we generate in these places simply gets plowed back into rising real estate values and and that I find to be quite fascinating how this classical factor of land or real estate which Marx derided is not that important as kind of a fetter how over time and well into the 21st century it continues to be a critical factor and indeed a much larger fetter that sort of forms a contradiction in that as more and more surplus is generated increasingly it appears that that surplus is plowed back into real estate and the home holders of land and I think that is Patrice's really remarkable contribution that she forces those of us who work in urban economics land economics spatial theory urban geography city and regional planning that consider ourselves urbanists to to really think about real estate in a in a different in a more important way so again thank you Patrice and I look forward to your comments and the comments of others throughout the day okay thank you um look um I've been confused uh the first speaker will in fact be Manuel Albers from Belgium and just in case uh Derek Wojcik and uh Manuel are confused I was confused sorry so um uh so I would like to see Manuel come on video please you should be able to see me now Gordon ah yes welcome Manuel sorry about that sorry about the problem nothing uh okay so Manuel uh in for and for all of those who are listening in you've got all of 20 minutes you could take five minutes for questions thereafter but we always are looking for five minutes of grace period at the end of your time to the next speaker which will be Derek so um just looking at the clock as it goes down we've sort of got one minute to go I'm not going to spend a lot of time introducing the speakers because uh in so many ways uh well known for everybody so I will basically give you half a minute Manuel if you would like to sort of pick up the gauntlet and begin speaking uh when when you like okay yeah thank you very much Gordon I am ready I don't need to have a minute I think and can you all see my screen yes thank you okay good that's that's always good to know because sometimes you think you're sharing something and you're not only just yesterday I recorded a lecture for my students of more than an hour only to receive an email this morning that they could all see me but that they couldn't hear me um so I still make these basic mistakes so I wouldn't want to be talking to you for 20 minutes without you being able to see my screen or be able to hear me okay so Gordon thanks a lot for the introduction thanks a lot also for inviting me I'm happy to comment on Patrice's her book and I'm not going to do a long praise of the book I I'm going to give it a rather short the praise part because I want to see where we can move on next so Patrice Darrington provides us with an excellent historiography of real estate development since the 16th and 17th century in London so he takes us through the 20th century in New York City and then takes us into the 21st century discussing not just New York but also a number of cases abroad what I find quite remarking is that the book didn't exist yet do you would think someone would have written this book a long time ago I think Richard said something along the same lines you would have found someone would have written the history of real estate development so only when the book was announced I was like yes I've never read that book that is weird that that book doesn't exist so I'm very happy that the book is being written I'm very happy I was very happy to read it and I'm even happier to comment on it I also wish we could have been in New York City I used to live in New York for three and a half years and about half of that time I spent in the planning department at Columbia University so it would have been very nice to see some of those familiar places which I still hope to visit next year when I hope to be back in New York but for now let me focus on some of the contributions that we find let me see yeah so as I mentioned Patrice starts from 16th and 17th century London and what struck me is that already in that early affairs in that early history of real estate development that real estate development was already not just an economic but also political affair it was very clear that if you wanted to do real estate development you didn't just need the capital you needed the connections you needed the network you needed to be able to get the state the local state very often in a way to be okay with what you do and this also may be one reason why a lot of theories of real estate development fall short they are either emphasized in this economic part or they're emphasized in the political part but they're not so good in bringing this together so what I would like to do today is to go a little bit into bringing them together more starting to think from Patrice's work and then trying to bring in some other work to see if we can bring them in dialogue with what Patrice has been telling us and seeing how that could work productively so Patrice herself builds on both the real estate literature and the urban studies literature which I think is quite nice it sounds quite obvious to do that if you talk about real estate but it doesn't happen that often that those literatures are being confronted in the way that Patrice does there are separate chapters even discussing sort of the critique coming from urban studies to real estate developments as a discipline so the approach he follows is quite interdisciplinary and I would like to go along in that way and then presenting some sort of political economy of real estate development although some people might say maybe it's more of a sociality of real estate development because they will also be relying on the work of some sort of big names in sociality to make my argument so if we look at the book and at the end of the book in a conclusion Patrice is formulating three objections of real estate development this in a way that could say is a conclusion rather than something coming up front it's a conclusion of the history of the description of this history of four or five centuries of real estate development what we find is the first objective is the professional shelter for occupants and the community as a whole the second being the creation of financial assets for capital markets and the third being the contribution to urban topography in the profession of urban amenities I was thinking a little bit about these objectives and then I tried to reformulate them a little bit in a slightly different way and I came up with these two and both of them actually have two elements in them so you could say I have formulated them into two objectives or into four objectives the first one being the real estate development has both use and exchange values this seems really obvious but it basically translates to some of the things Patrice says in her objectives the second being maybe a little less obvious and the the real estate development may create both direct and indirect use and exchange value so let me explain the difference a little bit there if we think of the direct use and exchange value the direct value of the house the apartment where I'm sitting right now is that I can sit here that I can sleep here work here and do other things the exchange value here is that I'm actually renting this flat and so that there's an economic value is being generated through my rent payment to my landlord and that my landlord if you want she could resale the house at some point but there are also indirect use and exchange values so the indirect use value is what Patrice calls the community as a whole the contribution to the community as a whole and what she calls in one of the other objectives the provision of public amenities which is in a way the question how do non occupants benefit or are afflicted by a building how do people benefit from my building being here well my building is a pretty nice one from the outside so maybe people would benefit from this indirectly there is a bar on the ground floor of my building there's also a dentist on the ground floor of my building these are facilities that people in the neighborhood may benefit from these are also facilities in the neighborhood the people might be afflicted by my building is is larger than most of the buildings in the neighborhood it may take away sunshine from some of my neighbors the bar may cause some noise it's not a particularly noisy bar and there are much noisier bars in the neighborhood but it's also important here that this use value can also be a negative indirect use value and Patrice Falkos is mostly on the idea that real estate development could have a positive value for the community and that is great and that is sometimes the case but I think it's important also to realize that real estate development and the existing buildings can also have negative indirect use values so if we look at the economic value that we get from a juice it's already the example I mentioned my landlord benefits from me paying the rent and I usually pay it in time so that's that's nice for her she can resell the building in the future also good for her she might be able to make some money there or she might just get her investment back so in this sense real estate is rather unique real estate provides both a stable income and it provides a stable question mark it's not always that stable we can talk about it a long time but I won't do that now I'll just leave the question mark up there it provides investment potential this means also that real estate has both commodity and asset features if we look at the side from development and construction into the lifespan of the building real estate is also of course basically fixed and this is the key here to the indirect use and exchange values these values are of course derived from the land this is no surprise I assume everyone knows this in this room I'm not pretending I say anything new here so location is key we all know that location location location are the three important things for real estate is we're often reminded but this means that value and price of real estate and the land underlying it or the lands potentially being used to develop real estate is derived from the values and the prices of nearby real estate and lands so the value of real estate the value of land changes as a result of the changes in nearby plots this again seems quite obvious but this is quite important for how real estate development is being done this means also that this is how the indirect exchange value is being created the indirect exchange value here is about how it influences real estate values of nearby plots what's the effect of new housing coming up my neighborhood what's the effect of the building across the street from me being fixed up and being rented out for higher prices is this just one building with higher rents or is this going to have an effect on the rents in the neighborhood is this going to lead to possibly a gentrification process is a part of it so the real estate values are always influencing the other real estate values in the neighborhood which means that real estate development always has an indirect exchange value it's not just about the building that's being developed that has these exchange values and the economic income coming also from rent it also means that it influences not just to use but also the exchange value of the buildings around it so and this means the developers as well as investors have an interest in increasing investments in a larger area you would think that if you have two real estate developments next to each other that they're competing with each other and this may be true to some extent i'm not saying they're not competing with each other at all but actually these two real estate developments next to each other or 10 or 20 or more than that are also working towards the same goal of increasing the indirect exchange value of these buildings of course they're trying to maximize their own exchange value by making sure the building can be rented out for more money can be resold for more money but also trying to make sure that if the whole neighborhood is lifted up all these buildings benefit from it even in theory the ones that are not necessarily being developed or really developed so here i'd like to take a step back and look at the work of the sociologist max Weber one of the great sort of classical sociologists and he argued that economic exchange is not simply about competition but also not about competition between suppliers and competition between the demand side but it's also about coordination and especially coordination between suppliers so coordination max Weber argues and many markets might be more important than competition hence the title of the slides to the left so there's a power struggle between different types of actors water than just between developers and developers here have a joint interest in enlarging the markets and patrice refers here to urban policies i can also think of lobbying so he refers quite explicitly to the idea of the growth machine coming from harvey molloch at new york university and you could also think of the pro-growth coalition that john molankov at cuny city university of new york discusses and these are sort of more the critical urban studies literature people from sociology political science geography discussing these kind of issues but this is in a way if you take a step back you can think like this is why this is important that actually developers may be working to coordinate with each other because they have this joint interest in the land values going up so and then we have another possible sociological perspective here one of the more reasoned big names in sociology the french sociologist pierre bourgeois he speaks of different forms of capital economic capital social capital cultural capital and symbolic capital and bourgeois argues and we're going to simplify his theory a little bit here that these forms of capital exist side by side and that to some extent these forms of capital are exchangeable but also foundational to each other it doesn't mean that you can by definition exchange one form of capital for the other but it means that to some extent it is possible to use one form of capital to further another form of capital so economic capital in case of real estate development that would be obvious to everyone so i'm not going to discuss that the social capital was actually also quite easy but threes discusses networks between developers and so this is also clear if we extend this social capital a little bit we start thinking about something that becomes cultural capital and this has to do with the club like nature of real estate and bourgeois argues that clubs have a spatial basis and they construct relatively homogenous groups they also keep intact these relatively homogenous groups and these groups are both instruments of inclusion and exclusion so it means that within the club it can be in a evolutionary measure to have a joint language joint ideas but also joint lobbying and things like that but it's also a measure of exclusion of excluding other groups from real estate development other actors that may have an interest in real estate development but are not developers themselves to exclude them here and bourgeois argues that if this happens quite effectively if actually some of the sort of the how you say it the use of cultural capital is some of the use of cultural capital in combination with economic and social capital is almost taken for granted and if the effects are not necessarily seen as a fact of having uh having these different forms of capital then he actually speaks of symbolic capital these are the effects of any form of capital when it's not perceived as such other social theorists may speak of hegemony here but actually an idea of symbolic capital in a way is a little bit sort of a less big concept than hegemony because hegemony seems to be almost like a black and white situation where symbolic capital was always in in relationships to these other forms of capital and bourgeois argues that this form of symbolic capital the use of it where it's actually not being recognized necessarily may also result in symbolic violence this could be for instance when there's development at the expense of the community referring back to what I earlier called negative use values so then let's see if we can confront bourgeois and uh Derrington a little bit more in built up um patrice shows that land owners um realized that the use that not only the use but also the direct and indirect exchange values of the land in a way she shows how this happened in 16th and 17th century London how before it was all about use value and these land owners started to see we can do more with the land we can use it in different ways make more money on the land use it more productively um and this this is how she basically tells how the first land owners became the first developers you could say in bourgeois terms that these first developers used economic social and cultural capital to seek favorable public investments which then became the hallmark of their symbolic capital and this is how real estate development was born and in a way how it gave shape to modern and contemporary real estate development this is where I could end but then I thought there's another interesting thing to say and if time is still on my side and I think it is I can go in one other perspective here in which one of the great names of political economy also could be put in dialogue with patrice Derrington and patrice in a way and this discusses the discovery of direct and indirect exchange value again my terms but my reading through a sociological or political economy lands of her work and this reminded me of the work of Fontunen Fontunen is famous in uh a lands economics real estate economics but also in economic geography for his model of agricultural land use I will show it in a minute but what is interesting here is that Fontunen himself was a junker a junker uh sometimes it's related to English but this is basically a form in uh Prussia of the landed nobility it doesn't translate necessarily directly into a proper English term but it is one form of the landed nobility it's not the highest form these were typically large landowners and it's a little bit similar to what patrice describes in London where these first real estate developers were also large landowners and these large landowners in London as Fontunen did in Prussia discovered in a way what they could do with their land and what Fontunen did is he developed ideas about land use and how to reap rent from them how to make money on the land he had he already owned some lands and then in 1810 he bought a large estate in Mecklenburg-Sverein a part of what is now Germany and he developed what he called a model farm there in 1826 so that is 16 years later he wrote a book basically about this and theorized how you could use these large land holdings and make the best of them so the book was called the Isolier de Stade in the Museum of Landwirtschaft with National Economy the isolated states with an eye on you could say land economics and national economics so you see here the connection between the land economics and the political economy already developing and basically he asked the question how to develop agricultural land according to its highest and best use if you take out the work agricultural it just seems to be the question in a way that many developers ask themselves so here you see the model what is most famous from the model is this lower part of the model these rings they're known as Fontunen rings four concentric rings about where you would find different land use I'm not going to discuss in detail I hope many of you will know it what is actually the more interesting parts is the top part of the model which is worth on tuna spends a lot more time about and this is indicating how by having different land uses you can get more profit out of the land and in a way how it works within sort of the horizontal line you look at which of the different diagonal line is the highest ones and that is how much farmers would be paying to leave the land from from tuna so this is assuming that there's a large land owner and he and in most cases it would be he is renting out this land to farmers leasing it to farms so what we saw here that's from tuna organized the land according to the economic potential of of the land use it was not so much about how to reap crops it was about how to reap land rents it wasn't about the fertility of the land it was about which piece of land located where allows me to use the land in which way to make the most money on it interestingly enough in the book although this is often forgotten from tuna also discovers how society and contextual changes affect land rents how technological inventions affect land rents how all kinds of developments transportation and things like that also are actually a way in which you can make more money on the existing land it was designed to benefit the landowners not the farmers and in a way from tuna also theorized something that Karl Marx would later call absolute rent and of course it's quite interesting Marx writing as a socialist from tuna writing as a member of you could say the higher classes as a representative of capital but they came to very similar conclusions about what Marx called absolute rent and Fernand Braudel great French historian some people would say one of the greatest historians ever he considered both Marx and from tuna the two great German political economists and why I'm going back to this history of from tuna because what from tuna did is in a way he discovered how agricultural land could be used in a way what patrice describes about what could happen in London by these landowners on in the land but the difference here these landowners in London didn't write a book they had to wait for patrice to write the book from tuna did in a way did the practice and then wrote the book about so patrice derrington and this is where i'm going to end this is going to be my last line patrice provides us with an excellent oh sorry i'm going back to my first line excuse so in closing my talk i would like to say one more thing for agricultural land use it took from tuna a few decades to go from the practice that he developed himself to an evidence-based theory of land use for real estate development um but such a book was sorely lacking for real estate development especially urban real estate development it took patrice derrington to provide us with the roots and the advancement of real estate developments since its genesis four centuries ago thank you very much well i'm going to step in and and thank you very very much Manuel taking us broadening our understanding through of urban real estate through to that historical beginning in agricultural value is absolutely key to what we have inherited in our minds about the importance of owning property and you know the interesting notion of a diversified agricultural portfolio of course is now played out with institutions who who seek to hold diversified real estate portfolios so we've got an echo of this very very fine beginnings from von thurer thank you for bringing that up gordon richard i'll pass over to you any questions that was um great one of the things that i've noticed as i said being an investor as much as an academic about this space is how you construct portfolios of property and for what purpose do you construct portfolios in a sense that they overlap thematically and in a sense i think i'm saying my own commentary that you bring together like types of properties around the world and what you're doing is managing risk if you like geographically across the world but basically taking advantage of the benefits of one type of property that has a not quite a universal value but a sort of well understood value or what you do is you build a portfolio say within the country that is geographically diverse so i wondered if meanwhile you might sort of comment a little bit more on what you mean by these portfolios of property what types of risks that i try to deal with could you repeat the last line again you said something about risk but i couldn't hear it very well gordon sorry i'm i wondered if if you might explain in some with some examples about the portfolios you have in mind and what their building blocks are underpinning them um oh i need to think about that you mean the portfolios as in the terms of indirect exchange value or well yes but also how do you translate that to property on the ground um well i didn't talk much about portfolios so i find it hard to to see exactly what you're trying to get at but i might be missing your points sorry well what i'm looking for is a translation of the principles into the practice of real estate investment and indeed the benefits that investors want to get out of property yeah well i think it's what you see in many cases developers working together in a way to develop or redevelop an area so i think that is a clear example of where you see they have a joint interest so Hudson Yards in New York is a great example where the location within Manhattan in a way on the one hand is very good it's very central it's close to midtown on the other hand it's a very bad location um the infrastructure is is not particularly pretty there and some blocks feel very unpleasant and there's some mecca developments there's a tunnel coming in with like four or five exits so you can also say that last part means there's a lot of potential there but if i as a real estate developer would put one building there um well i might still make a profit on that building and it might work well but if i really want to make money with the land i own what about developing or whether by by selling the land to someone else it needs all the development around it right so you need a lot of developers at the same time or in the same time frame to do something like this to live up to the potential of the land and this is about these indirect exchange values and to do this it's you need coordination between the developers and you need to lobby the local government to intervene in this area to make investments in the area but also to rezone which it doesn't necessarily cost a lot of money to rezone but it still costs a lot of efforts of developers and of the governments to get this done um so i think that's that's where you you see in practice how this idea of coordination works and how through the coordination between them and between them in the local states they shape indirect exchange value yes of course coordination comes in many flavors and some of it's above board but often it is actually uh that's sort of the stuff of life of corruption and and urban development go hand in hand so that's two questions from Manuel um first of all thank you i i've learned a lot in this hour and learned a tremendous amount from your talk and i like probably everyone else on this zoom read their von tunin but i didn't read this von tunin and it your reading is so contextualized and so important so my two questions are um the first one more mundane and you can just punt on it real estate has always been a very local industry it seems to me especially with regard to Hudson Yards these players are now more global so do you think that's happening it is my more mundane question and feel free to say i i don't know or i don't care the more i think interesting question for you is you've have a very close reading of von tunin you have a very close reading of marx and i've been playing around with henry george so theoretically how do you think von tunin marx and george compare in their view are landlords a separate class i'm asking that very vaguely are they a separate entity a faction of capital that is extracting a tremendous amount of surplus through their ownership of land and manipulation of land and coordination or are they in your view more of what marx said uh just a member of the capitalist class and not particularly interesting at least in my reading or i may have that wrong so i i thought you'd be the most appropriate person to ask that question too thanks a lot richard i think the first question is relatively easy yes i would agree that we're moving partly to global players but i would say it's a partial globalization right in terms of investment prime markets are very much global markets yeah big institutional capital that's behind this Gordon knows much more about this than i do um i think in terms of development we see a combination between on the one hand local players but in places like new york some of those local players are becoming national players or international players but rarely are they active globally and so this is another interesting thing a lot of them are active in select locations and they might be working in other global cities but not necessarily everywhere um so yes a partial globalization i would say the second question i don't know henry george as much uh as well as you do um fontuna marx um i mean have very different perspectives but i am definitely here more on the harvey in reading reading of marx i mean i read my harvey better also than i read my marx to be honest and i would agree with both fontuna and harvey coming from completely different perspectives that you could say land use and land development and landlords are worth the attention um there's also there was an interesting debate in the 1980s in british housing studies uh cordin is asking me to to stop soon i'll finish two sentences and it was basically about the question um is housing just something where we find the typical capital versus labor or is there something else going out in going on in housing market that actually goes beyond that and the marxists were supposed to say no although not all of them did in the way barion said actually there's something more going on here and i think this is true um real estate markets land markets have their own way of uh producing class in ways that are sometimes parallel to but not necessarily exactly the same as what happens in labor markets agree entirely wonderful thank you thank you man well and i must say very very interesting um and what breath what breath so we're going to turn now in a minute's time to direct project from uh oxford university um and i just want to um bring him online so that we can see him and uh where is darik i'm here there you are excellent um sorry about the mix up in order that um here we are and um you've got um uh the same order uh up to 25 minutes it's best if you finish in 20 minutes five minutes for questions uh but i'm actually now just wasting your time so i'm going to give you half a minute grace off you go thank you very much gordon and thank you patrice thank you uh richard uh i'm a financial and economic geographer i'm speaking from my residential uh real estate in oxford and when i first came to england in 1998 uh i came from poland so a country emerging from over 40 years of communist regime a big part of the cultural shock i experienced here other than meeting gordon as my supervisor which was a positive shock a the negative shock was the low quality of most buildings here particularly residential poor insulation double taps thin walls exposed pipes general lack of uh solidity i don't need to to go on and so first as a geographer i described i inscribed it i explained it with weather okay mild climate a roof above your head is enough to protect you from elements uh then i came across a historical explanations the country has not been invaded for a long time the average building age is high uh bold fashion technology is still everywhere but with time also as an economic and then financial geographer i learned about financial and legal factors affecting this material fabric of uh england uh the significance of which seems to be confirmed by patrice's book land ownership particularly in england is highly concentrated land leases are relatively short and long-term objectives in building are feather curtailed by the financialization of real estate development driven by short-term profits with community and societal interests sometimes also those the interests of the people housed in the buildings themselves falling by the wayside so oxford where i live is is is no exception there are two more episodes in my experience of english real estate that this book patrice's book sheds light on so in 2006 i lived in london and every second shop on my high street turned into a real estate agency literally a television was full of programs about it managers becoming developers because why would they be so stupid to only earn 100 000 a year if you can make so much more easily in property development so i went to my agent on the street asking about the possibility of buying a lot of land to to build a house so this is something that people many people in poland would would do by land and and build a house but my agent was shocked only developers and the super rich he said can buy real estate can buy land here okay maybe maybe just maybe you can buy some rural land north of birmingham so this was again a lesson that contrasted with my polish background where buying land and building your own house is still common even in big cities and most recently as a happy house owner occupier i realized that i actually don't know the value of the land on which my house stands in relation to the value of the house itself almost everyone in poland would know such a thing but hardly anyone does here so again these oddities at least from a polish perspective are the product of historical political financial and legal processes that have been going on in this country as the book shows they have been going on for centuries now speaking about shocks when i first received patrice's book i was fairly surprised by the big format rich illustrations not just another monograph as people before me said it's it's really a work of laugh not just research just look at the ambitious table of contents everything and i really agree with and want to emphasize patrice's identification of the research gap here she says private development despite extensive criticism does not itself interrogate its processes or seeks to improve its practices in this it does not qualify as an institutionalized discipline or attracts scholarly and professional respect well just recently i was reminded of how under-researched real estate was while conducting input output analysis of the u.s economy with my associate tacky zealopoulos so imagine in 2020 for those of you who are into network analysis in 2020 real estate was had the highest total strength centrality measure of all sectors in the u.s economy so put simply to those of you not interested in network analysis this is real estate is the most important economic sector in terms of its inflows and outflows and the degree to which they penetrate the whole u.s economy and its centrality has actually grown over time not only prior to the global financial to the sub-run crisis i should say but also ever since now patrice's book follows what she describes as a or the historical term in business studies but i think it also offers elements of and potential for a spatial or geographical term the deep dive into the private property development in 17th century london is fascinating shows the role of shocks in economic development with the great fire of 1666 a changing the use of building materials and the contrast between innovative but conscientious urls of betford and southampton on one side and the speculative nicolas barbon is instructive the book is a story of property development as financial innovation as well as path dependence timing a feather innovation for example through the use of the discounted cash flow model again quoting patrice the understanding of the mutual benefit achieved through designating portions of a site to positive economic externalities for the community was not explicitly formulated in the financial calculations for urban development and as a result uh community community contribution remains a qualitative assessment not justified by economic rational and neglected when financial objectives became dominant and as she documents this process started happening already in the 17th century at least in the 17th century regarding the geography in the book i really love as a as a geographer i love the patrice's phrase distance of financial interests uh this reminds us of the quintessentially geographical problem involved growing distance between investors and often developers as well on one side and communities in which property is located on the other side and this distance is enabled if not created by financial innovation regulation technology and globalization far away investors and developers tend to tend to neglect and underestimate both positive and negative local externalities of real estate and as a result prefer reductive financially driven models of evaluating real estate at the expense of more inclusive metrics this problem is aggravated when equity particularly public equity is used as a side effect of the liquidity that equity offers and to compound the issues in addition to investors and developers users can be non-local too think of empty houses both for investment and money laundering uh all money laundering or both in miami sydney london toronto oxford anywhere historical case studies in the book illustrate the problems of distance very well uh the developers of cavern garden and bloomsbury which arguably achieved very positive societal outcomes lived within their new built precincts the developers of less socially successful san james's and red lion squares in london departed entirely upon a completion i don't think this is a coincidence and the role of proximity is also made palpable in the book by the fact that the birth of modern property development is located right between westminster with its court and the city with its merchants and financiers close connections in both places were crucial for the early developers discussed in the book and such connections are still crucial for developers today now history and geography in the book where they meet lies a potential challenge to the book so can we be sure how can we be sure to identify 17th century london as the cradle of modern property development business or does it smug of euro and western centrism uh it's the kind of bias i experienced in san marco library this summer i was lucky to go to florans a san marco library in florans was funded by cosimo di medici in the 15th century medici the founder of the banking dynasty and the library is wooing its visitors uh with the writing on the wall that it's one of the oldest public libraries in the world full stop but then when you actually read the research you find that damascus had a public library 750 years earlier and and and and and later the dozens of cities in the middle east and elsewhere now london's tripling of its population mainly through migration during the course of the 17th century from 200 000 to 600 000 nearly 600 000 by 1700 indeed created huge demand for shelter and public space but there were many cities that reached larger even much larger populations of one million or more before london i counted 10 such cities alexandra rohm konstantino paul bagdad cairo as well as five cities including beijing in china all of them hosted major financial innovations so is it not possible indeed likely that private sector was involved in property development to house the booming populations and shape public spaces in these cities before london and if so is it possible that these innovations have influenced developments in 17th century london as they probably i think circulated in the silt road network trade network connecting london with the middle east and china via cities of renaissance italy like like florans and and and venice so there are other potentially missing links in the in the story by the 17th century amsterdam took over the button of the leading financial center in europe from antwerp which in turn superseded bruce and venice that were dominant in which were dominant in the 16th century florans venice antwerp are mentioned in the book amsterdam i don't think it is so my question is wasn't the development of london real estate influenced by the role of amsterdam as the beehive of financial innovation with its own stupendous property development during the 17th century and also by the anglots personal union that followed the glorious revolution in 1688 the book says that london with rising agglomeration of migrants flourishing intellectual activities variety of skills capabilities and focus on financial transactions was ideal for the emergence of the early real estate developers i agree but but so was amsterdam maybe before london another missing link that could be explored a building on this wonderful work is the role of offshore finance corruption and illicit finance the dark side of of things the book touches on it when it when it mentions the the plague of unoccupied luxury condos but when i think about the globalization of real estate that richard mentioned and and and manuel in the q&a 10 minutes ago it takes me all the way to a boardwalk to the boardwalk in miami beach overshadowed by a high rise residential blocks which get totally dark in the evening because nobody lives there when you read about the majority of multimillion dollar condos in miami beach are purchased with cash often i bet produced out of a suitcase a with a few or no questions asked by miami realtors and lawyers so there's much more work to be done on the abuse of tax laws the use and abuse of trusts secrecy in private property development or this note is interesting to read in the book about the 17th century bet forts and southamptons invested in the bermuda company back then it was obviously about exploration trade and slavery thrown in for good measure now it's about another form of colonialism using bermuda trusts other legal vehicles to establish and prolong modern english and other dynasties so questions can be asked both about the origins and the impacts of private property development in 17th century london that the book focuses on the book states that the model of private urban development that started in london spread across the anglo-american world and with only the slightest legal and economic modifications has been embraced by formerly known capitalist economies and other governmental systems but perhaps what i said about my my polish perspective on on these things the statement is exaggerated what for example about the lack of trust as a legal construct in in civil law countries what about traditions cultures institutions of property development which had suddenly been established in many countries for centuries and do not change so easily and there are vested interests involved in the reproduction now one of the paradoxes of real estate globalization highlighted by this book so well is that this globalization has happened without much standardization of property development as a sector or a profession so the book describes that the relative lack of professional association or regulation of practitioners for the development activity continues today and this may be related i think to the often observed loads often observed low standards and and and and also corruption uh while we read about professionalization of architects so think of the inigo jones in 17th century london property developers escape simple categorizations they are entrepreneurs they are professionals financiers and more at the same time you may want to think or not to think about donald trump i i i i lead that to you interestingly in the context of real estate as part of the financial and professional services complex a property property development is probably one of the areas where the role of big four companies has been minimal big four advisors on absolutely anything and everything even underwriters of financial deals but i think that real estate seems to be the market they have difficulty getting into and this maybe says something interesting about the sector so the book it stimulated me hugely to reflect on topics which are obviously beyond the scope of the book itself uh what about sustainable real estate development there are mentions of esg but what about green bones impact investing in relation to to real estate in addition to community impacts of real estate we have to consider global externalities to add to what manuel was talking about for example for climate you know a ton of co2 emitted from a building contributes to the global emissions with global impacts what about diversity uh i guess real estate development is male dominated with major consequences on its on its modus operandi uh many of the characters in the book itself are oxbridge educated white english males and what about technology including prop tech smart cities and internal things internal things in particular makes buildings and real estate tools of surveillance so that multiplies the dilemmas and trade-offs involved in property development as if as if it it wasn't convoluted and complex enough already and and what about covet 19 impacts so given the likely lower demand for office space higher demand for residential building and change in the nature of what is solved after so to move towards finishing here i'm absolutely fascinated by patrice's motivation as she explained and interest for this book and her interest in real estate teaching and the potential impact this book can have on teaching programs i believe as a financial geographer uh that we also need to teach geographers more on real estate proper uh i'm sure manuel does personally i'll never walk in coven garden or bloomsbury again without thinking about property development and i will thank patrice for that i hope to take my students on a field trip there interestingly the leading property development companies in the uk are still headquartered exactly between the city and west minster so you know three and fifty hundred years later uh to the events uh described in the book uh brookfield prologies well tower sagro land securities the list goes on uh all there and the book is a reminder that financial geography is not only about spatializing finance but about financializing space about financial production of space so i really also love a patrice's use of a quote from david harvey that money may be as the moralists have it the root of all evil yet it appears also as the unique means of doing good i haven't seen many people quoting that from david harvey uh so in this parting note i just want to say maybe the book is also or should also be a call for uh or their moral philosophy of real estate real estate is long-term in nature changing communities and societies in in the process as such it requires long-term commitments in other words used often in economics in the world where people use finance to turn these long-term commitments into short-term liquid money like claims to make it like money basically uh when people use law to rob a stump such financial transformations in the form of contracts and when people use accounting uh to obsess with short-term mark to market valuation and the government quietly approves or even promotes all of these processes the long-term commitment may go missing or goes missing and the result may be a short-term quest for quantity and superficial appearance so my question is can we have finance law accounting and government working towards more long-term objectives of real estate i put it to everyone here thank you great thank you um i wondered if patrice um you might have some comments in response oh i would just i'm so thankful to darious uh for expanding just my my sort of meager exploration of this to all of those key things that we are challenged with today uh and um i hope that there's you know thank you i am already making ideas for projects to continue that myself so thank you very very much and that's the whole point of opening up this uh you know doing the open commander of what real estate development is about to say where can we go from here thank you could i ask a question darick why do you think uh you make a point about real estate development in uh western cities to be in a sense under developed in terms of the institutions or organizations that would have otherwise cornered the market say for example in power generation or some or even retail for that matter why do why do you think the property market or indeed the building market is so fractured and fragmented why so uh in in general or in relation to uh other geographies the other western europe well why don't you start with with respect to western europe and indeed you know you're sort of making the contrast between whole industries in the uk being incredibly sort of there are dominant firms why aren't there dominant firms in property in real estate markets in the uk so so first what i wanted to say is that where some of my comments come from so i've been starting financial centers for a long time not a particularly focusing on real estate development and something i confess and after reading this book i want to correct and and i'm i'm myself an example how you can it's kind of easily just kind of make assumptions about about the origins of a lot of these financial innovations and developments in in western europe sometimes going back to italy sometimes going back to classical civilizations but but then for all kinds of reasons i've been in recent years i've been pushed to to read more on on china from a similar perspective on india on uh on mesopotamia and so on and so forth uh and the role of the middle east actually in the birth of capitalism itself yeah and how a lot of ideas uh that influenced renaissance italy for example actually came from the fact that also venice was the terminus of the of the silgrove network so uh so i would just say that uh i i cannot imagine these big cities in other civilizations developing so successfully for for centuries and sometimes millennia without some good solutions to the questions that we're asking now in the context of 17th century london or even 21st century western europe or or america i i sense there's a there's a huge potential there to learn and geographers should leave the charge on it okay so richard you're you're currently occupying an apartment in a building that is otherwise probably fairly empty according to darik um what is it about miami you know you're a recent joiner of miami is is it actually this coexistence of the occupied and the unoccupied in in these buildings that sort of makes the economy work well um you know partly i live in toronto where it gets extraordinarily cold in the winter yes yeah we we wanted a little bit of a getaway where things were a little bit warmer and you could have a reprieve um you know i want to ask there is i think he's very spot on on this um i want to make just one general comment and ask him a question first of all i think this globalization of real estate is happening in real time and i think you pointed out innovation property tech but the the the aggregation happening with even the big four the goldman's axis that there is a a move now for for the black stones the black rocks the brookfields to acquire lots of smaller players and it it's it's incredible right black was it black stone bought aig's affordable housing portfolio for nine billion dollars a couple of months ago this is happening in real time and i think you're going to see an industry that is more rationalized and where these players want to get more involved but and you can comment on that but i have a more specific question along the lines of gordon's question i think real estate is really a two hats a white hat black hat problem more so than most other industries i think there are organizations you mentioned brookfield i think there are large organizations and major many of the major pension funds sovereign wealth funds that gordon speak about that really want positive impact the sg sustainability affordable housing but i think there's a horrific dark side and this is what gordon was getting at in real estate where it is a massive vehicle for money laundering uh and for all of those you have the donald trump's uh and and i would just like you to reflect on this issue of not just the bark buildings but but the real estate's role in laundering money um and i think we need that's an area of capitalism that has been very not studied empirically or theoretically just like you to reflect in a minute on that thank you richard and you have one minute one minute is great it's all you need i think it does seem to me like i've been studying the financial business professional services complex for a long time and after reading this book i am i'm kind of the book confirms my suspicion that real estate is the most opaque of all of these industries i absolutely agree and the globalization also uh it hugely happens now through the real estate investment trust owned by institutional investors uh and owning shopping malls and and much else globally uh i i think it's yeah it's happening at the at the staggering pace that that has to be that has to be studied okay thank you very much um thank you darik i'm now looking for sam and i wondered if sam no no janelle janelle wonderful i'll go ahead and jump right in patrice thank you so much it was such a privilege to read the book and to contribute to the symposium i mean i think as the other commentators have said it really is a remarkable uh body of work and for me i read although the focus is largely on six sixteenth and seventeenth century london i was really fascinated by the the earlier origins or patrice begins with the kind of classical orientation of of land privatization and property and then the moral imperative that's directed through those those classical learnings so that's i i was very deeply impressed by the scope of covering two thousand years of history in some sense and then the meticulous detail of the developers of which patrice wrote so i my commentary is going to focus on these origins and then also thinking about pathways of development for the future um so let me let me see how do i move my screen uh here we go uh so patrice really organized the book around three questions i think manuel already noted this in in in the conclusion and for me this was a way to really read and organize and understand the text and so i also want my commentary to reflect this structure so how and why did such a model of production emerge when it did and become the dominant mode of urban growth why does it take the form it does and what exactly is that form and why is this form of economic production so poorly regarded and charged with responsibilities for so many urban ills where might improvements be made so for the first question of how this is where patrice delves into the philosophy of a play-doh and Aristotle and i think this is kind of fascinating because it's actually if you go deeper than the neoclassical political economist this is really where it begins at least for the western world which is this wonderful quote the better system is that under which property is privately owned but is put to common use a kind of public imperative in the writings of Aristotle that privatization is the way to maximize the value of land but it should always have this lean or this direction of facilitating common use and to that i also i think manuel already commented on this and i went back to the original thinking on use and exchange value in Aristotle's writing on the politics that he identified two uses and didn't exactly identify these as use in exchange but said one is the proper and the other is the improper or secondary use of anything and then went on to say that exchange is an in fact unnatural a mode by which men gain in the most hated sort of way and with the greatest reason usury which is gain for money for money's sake you know for money was not intended to be used in exchange but instead to be put to to sort of what he called the management of health households and so i think in this idea of the use value in exchange there's two really important principles to pick up for understanding land and the privatization of land one is that there was originally this moral imperative of public good and throughout the book patrice explores that tension how do you generate a range of different utilities for the use of real estate but with that always the public amenity and i think in that moral imperative Aristotle recognizes that privatization tends towards excess and exclusively private benefit so i'll come back to this idea in a moment the second is that in privatization the land is only realized in its productive use and to this i think is where Aristotle brings the idea of there's the proper and the improperly or secondary use of it this idea that to really fully make benefit of the land you have to understand and capitalize on its productive use and so again i'll come back to that principle but i think it's really important to patrice's question of why maximizing the use of land here she she drew from the enlightenment philosophers thomas hobs and john lock and again leaned on what is the the moral imperative land is high demand civic responsibilities there's a natural law embodied in the constitution of a civil power which provides for the governance of property rather than it's being administered through religious edict so there is a public responsibility and then with the lock this really interesting principle that first property not be wasted but rather through human labor it be used to create value and secondly that the quantum of property in an individual's possession should be limited so there would be enough as good equality remaining for others so in effect if an individual owned land enclosed or fenced it but did not cultivate it or make it productive lock argued such land was still to be looked on as waste and might be the possession of any other i think this is absolutely a fascinating principle because you can see the the positive moral intent in it that you you allow private possession of land but always with the eye towards making it productive to public benefit and problematic because it is also the logic if we look across the colonial world through which indigenous and other native inhabitants were dispossessed of their land if they weren't making so-called productive use of it or putting the land to its productive use there was this inherent argument that it could be better used by the white civilization moving into occupy the land the other piece of it that i think is also really fascinating to consider is that the conceptual age conceptualization of land value is in its nature extractive it sees only the value or the benefit of exchange value of the private benefit of the land realized through its productive use and fails to recognize the social costs or the indirect costs that Manuel Albers addressed so in my own work i sort of say well wait a second if we look at use and exchange value we're really only identifying a spatial distinction to this we also have to add the temporal distinction and to the questions of why or what is so unique or special about the developer i think it's absolutely this it's the capacity to extract tremendous future potential value of land and represent it in the present so if we add not just a use in exchange of spatial distinction but a temporal distinction and think about value already realized versus value that is potential we have not just two types of value but at least four so use exchanged derived in external and a lot of my work on carbon markets has been about theorizing externalities in external value but i think that for the relationships with land this distinction is also really important so if value is considered across not only its spatial but also temporal domains are there are these four types of value but also there's a recognition that we consider most forms of value as commensurate exchange but not all forms of value are equally capable of producing social benefit the ghost departments in miami are terrific example of this there is a sort of speculative advantage of storing wealth in these places but then there's also a distinct difference from the capacity to provide housing for residents in the city that need it and then to this i would add a third point which is the long-term or sustainable value generation must be systematic and consider not just socioeconomic but also socio-environmental systems in the assumption that land is a commodity there is this idea that the land is not a living thing development proceeds over or on top of or through what is considered to be a static environment and for a range of reasons that is incredibly problematic i thought manual albers diagram from fontuna and showing the value of different utility of land was really instructive because you saw at the end of it the thing of least value was the old growth forest and there's an incredible kind of arrogance or human human perspective that something that takes 500 or more years an ecosystem of 500 or more years of growth is worth the less than the agricultural product of a season and so in that i think you see the there's a sort of a missed opportunity to understand and fully realize the capacity of a range of values for civilization so so moving on from this i think the the third question that patrice raised about you know the what the problem why is is development so problematic she identifies from um coven garden and the development of a range of of the 16th and 17th english developers a very concrete practical model that is established a four step model of land development first obtain control of the land to calculate value based on possible uses three determine its highest and best economic use and for achieve any necessary legal um changes of use to maximize its potential and then goes on to say that this model with little alteration adapts into the present day and then perpetuates not not only across the anglo-sexan world but also with slight modification to other geographies around the world and i agree with with derrick's critique that you know there is some there there obviously there is other influence from other older models and practices of land development but i think where this is really powerful and potent is in its capacity to generate the logic of settler colonialism it is something we absolutely see in the north american context it is the logic that underwrites the history of settler colonialism and land dispossession of millions of indigenous indigenous people not only in the west but in other colonial states around the world with it there's also the challenge of of what patrice identifies as the faustian bargain the developer can never stop developing and so absent ecosystem considerations relentless development leads to a situation whereby virtually every measure the earth's biosphere is in decline i see climate change is symptomatic of that condition not as an underlying cause and finally this third issue the idea that land is a commodity this sort of unquestion assumption it is a thing to be possessed here i think it's interesting to consider the alternate logics and for most indigenous cultures land is not a thing it is relational it's not an object of control but rather an integral entity that sits in relation to the community that inhabits it and with this there's a principle of connectivity the idea everything in the universe is connected the spirit world is represented in this diagram is connected to the moral world the sea is connected to the land the sky is connected to the ground connectivity expresses the ontological foundations of indigenous society the connections that people have to their communities their traditional territories and the ecosystems on the land and so in this idea that's not an argument that we can we can undo 300 years of history and go back to where we began but it is this idea that we need to return to the principle that land exists in reciprocity it is a living system it provides the resources a community needs but only if they carefully steward and renew the land all right and so i think you know it's difficult again to conceptualize this in the context of modern capitalism of cities that are already established where it becomes more promising is when confronting climate change in the reality that 80 percent of human population lives on the coast and that in the next century these cities these civilized these settlements will have to be radically transformed these are a few images from the recent storm hurricane ida that hit new york and showcased the absolute vulnerability of the infrastructure because again it was built with this assumption it exists over a static environment the land on which it resides the natural environment is a thing that sits in opposition rather than in relation i wanted to briefly in the commentary i talked through the boston seaport district case because i think this is emblematic of so many of the principles that patrice describes in her book you see here a sign it's just for the last 20 years and a place of incredible productivity and development but in envisioning what the developer always envisions for the city you have these beautiful green spaces you see kind of the ideal of the public domain that's never actually fully realized in the city so the boston seaport this is an aerial view of the city it's a 1000 acre low lying actually built on backfield land post industrial area just east of downtown boston it's a site that's been built on landfill historically it was used for fishing piers and then for a range of industrial activities and by the 1990s was quite dilapidated so as the city cleaned up the harbor built infrastructure to connect this the transit and roadways to connect this region developers began to realize there could be potential use so a tremendous amount billions of dollars from the 1990s of both private and public investment has been poured into the seaport district originally this was planned as a mixed-use neighborhood for families with parks and other public amenities in 2010 it was re-christianed is the innovation district because again here is the highest extractive value of the property so the intrinsic benefits it was meant to create construction jobs new tax revenue it was also meant to have a housing linkage job training linkage on-site affordable housing and to connect to the regions on surrounding it and then there were a range of negotiated public benefits in in the plan including a tremendous amount of public open space of civic and cultural buildings public access and recreation of a diverse neighborhood and then water activation and transportation and over time you see how this beautiful vision of what the seaport could be evolves into something that's quickly adapted and acquired by elite tech and life sciences businesses luxury offices apartments and restaurants it now has the highest medium household income on all of boston it's predominantly white like 89 percent white exacerbating long-standing issues in the city of segregation so here you see one of the two-bedroom luxury flats that's that's recently sold for nearly two million dollars um and then i think the other really important consideration is what does this mean for the future the seaport is being built on land that under climate projections will be underwater by end of century and developers have been aware of this they're building despite the fact because they assume two things one they will acquire the return on their investment long before this problem becomes a reality so it's not really their problem and in any case it is a challenge that will be addressed in some way by government intervention so there's a range of different ideas or plans about what all of what sea level rise means for the harbor here's here's a vision of this massive harbor wall system including an outer wall and a high island harbor island wall and then an inner city wall that could be built and a recent study by the kirschen lab and umass boston is demonstrating that across all parameters environmental economic cultural this this piece of infrastructure is unviable so in effect there isn't really a plan to confront sea level rise and to deal with this challenge so in some i you know looking at what derrington wrote patrice derrington what wrote and and thinking about the takeaways for me i think there's a remarkable history and a remarkable set of principles to study and understand but in thinking about the origins of development there's also this realization that the development of past centuries will not adequately confront the challenges of the next century so we need more considered plans not just for the city of boston but for other cities that will face the same challenges for thinking about the relationship between the built environment and its natural ecosystems for ways of dress addressing systemic inequities and vulnerabilities and then limiting development high-risk areas so that we accept plan sea level rise rather than trying to build infrastructure that is unlikely to be viable in the long term all right so i'll leave it at that and and open it up to questions thank you so much it was really a pleasure pleasure to read this work i'm janelle thank you very much for your comments insightful as usual and i i might encourage those who get a chance to read janelle's commentary about the case study about boston was very i thought very revealing we've got um dare i say uh 10 minutes uh till um we have a break as i as i understand it am i right team yes patrice is not excellent i wondered if um other speakers might have comments or thoughts in reaction to janelle before i pass it over to patrice silence is gone patrice over to you right well i'll kick off then i'm sure hopefully even some folks if you have questions just please post them on the q&a we would love to you know not have you take advantage of this opportunity to us something directly of um of janelle's wonderful work um but uh very i very much appreciate your uh your ability to utilize uh the what i've revealed in terms of motivations of of land use and exchange and and so on uh what we have done as you say is is arrogantly take that as being a right to any land that we land on or that we arrive on um this is going back to the indigenous uh aspect and in fact you know i was raised by a mother who was a historian of Aboriginal art and she always said to us you know they do not own their land they do not believe that anyone should own their land they themselves the Aboriginal people who are indigenous you know indigenous to Australia and in fact um uh you often nomadic uh they just see themselves as responsible for the stewardship in return for the livelihood that it provides no one no one ever would dare to have a right to own it so very interesting um and you know of course we've only you know ignored that uh at you know a great tragedy uh but thank you for for bringing that up i know she will be very touched to hear your affirmation of that richard florida yeah thank you janelle that was just unbelievable and again for me just incredibly instructive and i learned a ton i have a really basic almost dumb question for you which which i think you would be able to answer better than just about anyone else i've heard speak um a couple of times we've touched upon the growth of real estate interest both from the development community but also from the investor community in things we would lump is esg impact investment or sustainable development goals and i myself have been asked by real estate developers to comment on that help them formulate plans i see that mark carney uh the former governor the bank of england is now a vice president at brookfield by the way a toronto-based company that operates in all these major markets um he's joined him as a vice president i think either or vice chairman in charge of impact or sustainability i wonder what you make of all of this it is this for real is is this partly for real and partly you know people trying to bolster their image so-called greenwashing if it's not for real can it be a trend for the good in other words is it something that governments or other regulatory bodies whether national or or local or global can enforce or investors is is is there something is there a there there or not much at all yeah i mean i i think it's a fantastic question richard and i think maybe it's all of those things is it you know what what is the motivation i i do think i for for work that i did several years ago documenting um systems of mitigation around the world and how markets uh emissions markets are established i interviewed or financiers and developers and regulators and you know often middle-aged white male professional um service operators in different capacities and it was fascinating because it was almost as though they had had this sort of you know the religious or spiritual journey that had brought them into the esg sector into this idea of of green finance where they'd had a very productive career and traditional finance and then realized they'd had children or grandchildren and wanted you know realize they wanted to leave something else for the future and so i think that that motivation or this realization that there is a tremendous problem and a need to generate both social and environmental um wealth or benefit is real in terms of the mechanisms again like this is where and i apologize i probably didn't let's felt rushed for time so fully explain this but i think one of the challenges is this assumption that everything is commensurate in exchange and particularly the idea of what i call derivative value derived value this idea that you can extract um potential value options swaps derivatives so much of finance and make it present make it realized in present terms and so what i'm finding with carbon markets and with other forms of externalities um or external finance it's this idea that again the path towards achieving green objectives is to creating a price system creating exchange value for those environmental parameters and i think that that that thoroughly misunderstands the nature of use and exchange value and as of external value is something sustained through use not through exchange so it's less about i think a sort of malicious intent or malicious malicious motivation and just a failure of of of modern economists or or even historical you know orthodox um or classical economists to properly theorize the nature of value and to really consider the dynamics of spatial and temporal connotation can i just catch up on that a little bit um i've been very interested in this question about why esg has got out ahead of public regulators in the us through the previous administration for example they wanted to outlaw esg they wanted to stop pension funds using esg and there was a somewhat of a constituency in the finance industry mall street to do that but it wasn't very loud and in fact actually when you look at who's peddling the esg it's often finance companies looking for an edge in a market which they think is evolving and growing and we know everyone wants to be in a growth market a declining market it's not great likewise carbon and likewise power stations systems of energy generation that rely on fossil fuel you know i would have thought cop26 was the death now for fossil fuel energy generation and it's not that anything was decided but it was the direction of travel and the direction of travel now is of course we'd better get out before we get caught if you like with our hands in the till if you like on carbon so there's a sort of a momentum that is i think it's taken the politicians by surprise i i'm shocked actually in the uk that boros johnson is interested in the environment you know there's no evidence that he is but but it's that sort of sense that the politicians are on the back foot finance industry is on the front foot but they are doing it because they don't want to be caught short that is holding at the same time they want a market edge looking forward are they genuinely esg you know heart on heart only when they put their head on the pillow and think i made a lot of money today that's a bit cynical yeah it absolutely is business interest and i this is where the short termism is so critical because if if 20 years ago you could have known google is the great you know company or tesla is the you know you could have this foresight to know what's the next innovation you would you would absolutely invest there if you could see that in the future we know renewable and we know there's going to be an energy transformation you know we absolutely if we think into the 21st century we're not going to be producing on coal and petroleum and yet there is this this latent inability to capture that advantage because there's the incapacity to think long term and to realize those gains across the long term that the short term present always overrides those considerations and so i think you know the business community is starting to move on mitigation they are realizing the advantages of of energy transformation for mitigation but they also don't want to be caught holding an asset that's going to bleed on them so there's that sort of sense of cheer you know if i don't move now when i'm am i going to move and do i want to be late or do i want to be early where's the payoff if you like right and and to extract as much value out of the conventional energy economy is they can't move forward so yeah what i think what everybody is missing is the rate of adaptation even at the COP this this sort of you know there's an undertone or an undercurrent among developing countries among the youth or non-conventional non-state actors but i like i'm doing work with tribes in Louisiana even over the last three years i and i've studied as you know gordon for 20 years from an academic standpoint climate change absolutely astounded visiting Louisiana and seeing what is happening to these communities on the ground we are in the present losing that coastline it's absolutely devastated by each subsequent year of storms ida destroyed thousands of communities and we're not seeing that because it wasn't you know one big flashy city it is a reality that we're going to be confronting around the world everyone is confronting and i think you know man well alluded to this in his talk private that the value of real estate doesn't exist in a bubble it is subject not only on its neighbors and its external conditions but it's on it's based on its socio political cultural stability climate change is going to undermine that for everyone and so while we have this opportunity to be thinking about adaptation and development we absolutely need to be doing that now before we have mass migration of millions of people cities around the world destroyed and i know that sounds alarmist but i think it's just being realistic about what is coming okay now thank you very much it's been fantastic but let me hold on sorry good we do have um we do have one question do we think we could just have uh harpere gill asks janelle tax revenues were labeled as a are you labeled them as a intrinsic um it did you know how did the question is uh they're curious harpere just curious about how that choice was made obviously between um uh you know intrinsic or extrinsic yeah and i'm i'm apologies i don't i'm not sure if internal or external maybe was the question is not seeing tax revenues as external so apologies i'm not sure i fully i'm catching the reference so for maybe for the sake of time i'll give that question some consideration and and can add something to the chat so thank you very much okay patrice um uh it is 3 30 in the afternoon my time it is and it's in 30 in the morning your time yes we have a break now until 11 a.m your time mm-hmm for a clock my time i keep saying these things just to remind me um so shall we get together again five minutes before start that that would be excellent if folks don't mind uh we would uh we will then uh have a fabulous sound chandron uh who is uh the uh dean of the school of sorry the new york university shack institute of real estate um and also a very renowned speaker globally about the pandemic and and its aspects or its impact on real estate and so on so we shall look forward to seeing sam then and seeing you all back thank you and i would like to introduce um my very well known colleague uh the uh larry and clara silvestine professor of real estate and the academic dean the new york university uh shack realist institute of real estate um sam welcome thank you so much i'm delighted to be here very flattered uh by the invitation to join you and it was such a thrill for me uh to read the book uh the thing i'd start by saying um is that i because i imagine this is something on the minds of a lot of people here um who who are both presenting and tuning you know for me patrice it's been a very long time um since i've encountered a book particularly one as substantial as this uh that i would even consider um you know assigning to my students to read uh but this is one of those uh lucky times where you know every page i turned i couldn't help but think to myself how well that particular chapter or that particular passage or graphic would fit into something i'm doing next semester um and i very self-servingly uh i am hopeful that either you or a group of us perhaps uh will develop some teaching materials that can go along with the book uh to facilitate our being able to leverage it uh with our students i think larry uh said at the outset uh this morning that it sort of has that rare combination of being so uh evidently readable uh but also so scholarly and really filling an incredible gap that has persisted for so long um in our historical uh understanding um and it really is one of those things where absent you know this book certainly i learned so much um and by the way i've been taking notes all morning the um but um you know a lot of this i think absent the book would would be sort of you know lost to you know the next generation of real estate and urban students so very grateful for uh again i think what folks have described as a labor of love and in creating this um and it wasn't lost on me that you've got sort of mark holidays new tower uh one vandy uh right there on the cover the other thing that i'd like to comment on briefly because uh you know the the conversations that we've already had this morning have been um so interesting to tune into that just before the break uh you know gordon and janelle and richard uh where we're chatting a little bit about esg um and for folks who maybe are in other parts of the world and not as familiar with you know the real estate landscape and sort of uh you know collection of players here in new york between patrice's program and mine uh we are board members and benefactors probably own almost all of the class a properties in town so uh we have a we have sort of this handle on the um we're sort of on the thought process and the thinking of a lot of people uh that trivia fall in sort of the institutional segment of the market um certainly there are uh there's an incredible need for and a lot of attention to um you know segments of the market that are not as institutional outside of the reed space outside of securitization of debt um the uh sort of in areas related to workforce and affordable housing which sort of only more recently i think has sort of taken on more institutional flavor um but by virtue of many of these conversations you know i think one of the things that really comes to mind for me um is that when sort of reflection on sort of what folks were describing just before the break you know your real estate being a little bit ahead certainly in the united states of sort of where we see policy um and i would you know looking at the examples of other countries um i would speculate that uh and i'm not a political scientist by any stretch but i would speculate part of that has to do with uh the uh through the current state of the sort of the political dialogue uh in the united states um and are being in a place now where whether you agree with the policy priorities or not um issues related to climate change the environment uh sort of you know equity in cities you know are clearly higher priorities and they might have been you know two or three years ago and again not um to review uh not casting aspersions on folks who might sort of think that you know the current environment is worse or better than than where we were but certainly we've been in a place where building a national consensus around issues related to esg um has been very very difficult and there's been a sort of a geographic element to it uh where in some parts of the country um you know there has been a sort of a different sensibility around this now richard describing toronto was very very cold i would remind him that he is quite close to the us border and that there's an entire country north of him that's even colder uh but being a canadian myself um i will i will pitch in for a warmer jacket for him uh because toronto is quite livable but the um i think when we're looking at the issues that janelle and gordon were describing i i do agree that you know while on an individual basis um it may be the case that uh there are folks within the real estate industry that patrice and i and others know that may have you know very strong feelings about the importance of prioritizing issues related to esg um when we look at sort of the way that business decisions and investment decisions are being made um and i think janelle described it as sort of you know a business imperative and a business decision for how people are pursuing things um it it reminds me of you know lead certification you know perhaps 10 years ago where it wasn't necessarily the case that the investors whether they be domestic or non-us bringing capital to the united states uh were uh you know prioritizing um to review the the importance of green building at that point in time but certainly we're thinking given their longer investment time horizons around the liquidity of those assets um and the you know whether or not um there would be a richer uh deeper more liquid market for assets that were lead certified simply because of the signaling mechanism you're completely independent of the um uh you know the you know the the energy efficiencies that that might represent um so i think there is an element of this that is sort of your market responsive you know what do folks uh you know who are developing think that or feel that sort of tenants want what do their investors want um certainly folks you know for whom uh you know some of their capital is coming from pension funds uh or from outside the united states are having to be mindful of those issues as well you know government contracts uh or government tenancies going to play a role over here but i think a lot of it is uh market responsiveness um factoring in the longer time horizon and there are people having to think ahead if i own this asset for 10 15 20 years uh you know what is my exit uh you know what is the attractiveness of the asset on an operating basis to to tenants maybe not today but but down the road um you know that being said um you know i think we also see that um you know there are a range of interpretations around sort of you know what constitutes the sg and just how far you know folks are willing to go and so um you know that continues to present an issue for us one of the things that you know you know places like Hudson Yards one Vanderbilt Scott Reckler's new building at Grand Central you know come to mind world trade center properties downtown certainly we do see um you know sort of some unevenness in the burden of um you know of meeting those goals where relatively newer properties are going to be in a privileged position in meetings or view esg goals just you know by design um you know and whether it be sort of you know uh energy efficiency efficiency you know uh spaces that are conducive to the health and well-being of uh people that are you know working uh you know in those spaces uh the ability to provide green spaces and terraces you know in a lot of these buildings who haven't visited one Vanderbilt please you know folks when you're in new york you don't want to miss the opportunity it's an extraordinary asset but you know it does raise the question of the most visible participants in the market you know are going to be in a very different situation face a very different set of constraints and meeting those goals as compared to you know the investor that um you know is owns or is you know left holding you know the b or c asset the office building that was built sort of in the pre-war uh environment and I think you know we're far enough along now that I have to clarify for my students when I say pre-war I mean the second uh world war the um the um uh so all of this becomes you know really important for us I'm really interested in hearing uh what what uh sort of what other folks today have to say about it I'm gonna share a brief deck I didn't want to overlap with you know some of the commentary from uh earlier uh this morning and so I'm focusing my comments on a slightly different aspect of uh the discussion in the book and it dovetails with you know an area of great interest for me um in the realm of public health um and you know this was really instructive for me as I was reading through uh the the text and I've included a couple of I've sort of pulled out a couple of examples here uh from uh you know Patrice's writing it was well known that the use of coal for domestic purposes brought small conditions for many months of the year and encouraged the London's wealthier inhabitants to move westwards um there are a range of a number of different sort of references to that interaction between health and well-being um and perhaps you know sort of you know in the early 17th century not cast in the frame of or through the lens of overall public health as much as you know individual households optimize optimization of their behaviors um but the interaction between the built environment and outcomes for both individuals and for um you know and for communities sort of has been a feature of the real estate markets going right back in some cases through I pulled some quotes uh from from the preface of the text uh you know that go back to to Roman times um and I think that we are at a point in the market today and in part it has been motivated by uh the more robust conversation around ESG part of it relates to sort of you know our uh response to the pandemic and our thinking about how we might need to do things differently the clear observation of disparities and outcomes you know for households in some cases that are at a minimum correlated with where they live and their living conditions how they work um the but also differences emerging you know across sort of systemically important cities around the world depending upon you know how they're built um to reveal how people access the transportation network um it's sort of and it is underappreciated that there is a deep connection between public health um and the built environment um and again it was very instructive for me to read the text and to see references to this interaction you know going back more than 2000 years and then for you in the later parts of the text you know to the 16th and 17th century the another two quick examples um health governance of the area was outside the jurisdiction of the city and relied totally on uh overburden parish officers again sort of a key thing for us here when we are thinking in a post pandemic environment around how it is that um private real estate investment and development decision making is shaped by uh or interacts with issues around the externalities associated with private development or the need for you know collaboration and partnership with public entities and I think sort of here with Hudson Yards as an example of this someone mentions sort of the infrastructure around Hudson Yards I think we can all agree without the seven line extension um and again for those who are not as familiar with New York um a real lack of subway access historically you know on the far west side in the uh in the neighborhood of um of Hudson Yards and so a critical element of this being through the public expansion of the subway system so that you know if you come into Grand Central you could immediately hop on the seven train and now the seven train will take you right to the heart of Hudson Yards um arguably Hudson Yards uh would not be viable in the absence of that investment having been made um and certainly sort of speaks to the locational advantage of building like one Vanderbilt uh where you don't need to hop on the seven train you can just exit from Grand Central and and you're right there um but this issue uh you know around sort of you where does the jurisdiction and responsibility lie for thinking about how uh the interaction of the built environments in public health are ultimately driving outcomes for households in an environment that is more attuned to uh ESG and the and the importance of equity and outcomes you know in the urban in an urban setting where we see a disproportionate number of income constrained families becomes I think critically important for us because this question you 400 years later you know has not been entirely resolved um you know and you're sort of we're at a place now where I think the absence of coordination you know between public health authorities and private real estate development uh firms um is still sort of you know a stark reality for us. Finally then they wish to avoid the unhealthy crowded and dirty conditions of the city and to locate in the salubrious emerging suburbs of to the west. I think what finally what this captures for me also is that while we often will think of that interaction between public health and development as being um sort of you know conditions in the environment in the natural environment or in the urban environment impacting people's location preferences and decisions about where to live uh that there's significant endogeneity here and what we know is that it's not only that okay you know there's and you know that example of coal you know in air quality in 1603 is so prescient because you can go to the BBC's website today and read about exactly that same set of conditions in New Delhi India. Um the um but but I think what we see here is that well Pete while individuals may and households may make decisions about where to locate based on the quality of the environment around them what we also see is that the nature of the investments we make in the environment um is driving uh to the the public health uh outcomes as well. Now why does this become important for us and I wanted to give this one example it's a little bit further along in 1854 but the origins of our thinking about sort of that formal discipline within public health of epidemiology you know we're also uh you're just around the corner uh from uh you know from sort of a lot of what uh you know sort of a lot of the uh you know the the projects and history that Patrice is describing so the the the gentleman who was considered sort of the you know the father or the originator field epidemiology John Snow you know in 1854 was conducting field research during sort of a cholera epidemic in London and in the Golden Square neighborhood was actually looking quite specifically you know at this one neighborhood he mapped out to review each one of these dots if you're able to see them clearly enough represents sort of a household with incidents of cholera and was able to see that there was a clear density pattern here and the density of cholera increased in proximity to water pump A on Broad Street in London. And I think again what this highlights for us is that you know there are going to be associations I think you're one of the big things that I know Richard and others have written about and discussed over the course of the pandemic is that we should not make the mistake of associating density with severity of epidemics or infectious disease. There are other intermediate causal drivers so density for all of the things that we know are wonderful about you know scale and agglomeration density ultimately also leads to you know some other feature of the built environment that is a facilitator of you know disease or negative outcomes but what that means for us and this is for me sort of a conceptually absolutely critical point density at this point in our history is you're perceived very very negatively I think sort of that's one of the outcomes of the pandemic but in helping people to think about how the connection between density and health outcomes is intermediated by other factors or features of the built environment like are we keeping that pump filter or a cleaning are we ensuring that there isn't sort of garbage being collected nearby you know these things become very very important for us and think about how we can mitigate you know some of the risks associated with density and ultimately arrive in a place where you know some of that you know negative stereotyping around dense urban areas is better understood now this does become I think important for us and it's a real takeaway for me from Patrice's work because we're in we're at a period in time where you know after you know 100 years of seeing improvements in outcomes for how it is that people fare from a health perspective in the urban environment we now find ourselves in a situation where probably over the last I'd say 20 years you know we've seen something of a reversal there part of that reversal is related to what we refer to as zoonoses and so about 60 percent of all emergent infectious diseases that we will be able to catalog our animal in origin and what we're going to see here and again sort of it's that endogeneity in public health outcomes impacting the built environment with the built environment impacting public health outcomes what we're going to see here is that much of the reason why we have seen an increase in the rate or frequency of emergent respiratory diseases SARS, MERS, COVID is going to be related to issues of urban development and development overall I think Gordon I just have a couple of minutes left here if that's right yeah you could see me creeping up on you yeah yeah yeah so in short I'll simply say that there's a there's a considerable body of research work that's been done to identify you know how it is that changes in the way that we are developing the intensity of development activity when it is not tempered by sort of an appreciation for you know that intermediation between density and disease outcomes is allowing for those disease outcomes to increase in frequency and so identifying sort of what that intermediation is so that we can mitigate it becomes critically important and it was it was just so instructive for me to see in Patrice's book that there were references to this you know going back you know you know very very far for those of us briefly who may be thinking of to you know that the critical conditions or to you know that the necessary conditions for the emergence of a new zoonotic disease you know being something that sort of it happens very far away you can see here on this map certainly through you know the critical sort of the necessary conditions unsurprisingly South Asia Asia Pacific but what you can also see here is that those necessary conditions you know exist in a very concentrated area in the northeast of the United States you along through the northeast corridor and in parts of Europe as well so there's something that we need to be mindful of the last piece of this is that while coming out of the pandemic we are acutely focused on the need for pandemic response and to be better prepared for you know the next time something like this happens will we the as far as the relationship to the built environment goes what we also know is that the United States and many other advanced economies over the last hundred years have experienced what we refer to as an epidemiological transition and by that I mean that we've moved from a scenario where you know most people when they die you know die of some kind of infectious disease if you look at this chart and I don't know how clearly you're able to see it you know the big killers are going to be diphtheria gastrointestinal infections tuberculosis pneumonia we didn't live long enough or have a good enough control over many of these diseases prior to the introduction of antibiotics to actually die of the things that kill us now and so while mortality rates have declined overall what we also see is that you know infectious diseases while the idea of Ebola or COVID you know sort of might frighten us and there was a clear sense that Serbia there's an increasing frequency ultimately the things that are killing us are our cancer and heart disease and diabetes and this becomes again another critically important part of our thinking about you know the built environment what this chart shows in Gordon promises my closing one is that the this is a map of you know percentage of the population in the United States that lives within half a mile of a local state or national park what we do know from the research is that proximity when we're thinking about the built environment proximity to well developed usable public spaces as was reinforced by the pandemic is actually quite critical to the public health outcomes that we observe and so our thinking very holistically about this relationship as part of the built environment the need for public spaces access to transportation good quality public schools how it is that we might think about directing some of you know that you know the largesse of of the Build Back Better Act you know becomes sort of a critically important piece of this conversation and you might you're one of my key and many takeaways from for built up is that this has been an issue that has remained underappreciated in our thinking about the built environment going back to the Roman times so Patrice I think we all owe you a great debt of gratitude for your work and again I greatly appreciate the opportunity to join you today great thank you very much Sam I'm conscious that my fellow participants might one have a question or Patrice you might want to have a brief response we've got well no I thank you Sam I you know the critical analysis is perfect and Covent Garden of course renowned for its public open space provided by a private owner and continues to be so but Richard Florida Sam nicely done and great to see you I guess my question to you is given given your role it one about public health and the contemporary scene why do you think that we have what I would call an ironic if not counterintuitive if not insane thing happening in the United States principally I don't think it's happening in France I don't think it's happening in England I don't think it's happening in Canada where the places that have done the best at protecting themselves from this virus New York San Francisco that have had the most stringent public health measures are the places that either rightly or wrongly are speculated to be seeing the greatest out migration and and one hypothesis I have is that Americans are uniquely crazy sorry you know who was it what's his name Marty Lipsett always said the best thing you can do by moving to Canada as an American has come to understand the country you could say the Americans are uniquely insane or you can say that Americans put an incredible value on liberty and I'm not just talking about Trump Trumpers or populist that Americans put an incredible value I'm not saying this is right but an incredible value on liberty and don't want anyone telling them anything else but I just think it very interesting that the places that have done probably the most to protect their people with regard to public health have seen arguably large out migrations and those out migrations have gone to the places that have done the worst whether that be Florida Miami you know Port Lauderdale Palm Beach Texas Houston Dallas I just wondered if you had a reaction to that or rightly or wrongly absolutely it's not just the pandemic when we talk about Serbia people migrating to some of the places that have performed quite poorly I think to Janelle's point earlier folks are also migrating to some of the places that are at the greatest risk for climate change and so while Serbia we profess to care deeply about ESG you know for both firms and individual households we don't always see that concern and that commitment reflected in people's location preferences and decisions I would suggest that there's two things one a broad misperception about the role and contribution of density you know where we don't see the intermediate factors the in the United States and part of that reflects you know people's reading of people's reading of of you know New York having been hit hardest first and just simply assuming that that must be a function of density the other to round it out is that I think what the pandemic has done and this is unrelated to the disease issues and the public health issues is shown for many people that they have the ability to exercise some kind of geographic autonomy at work and so the issue that is vexing New York and Boston and some others is not really density in the pandemic in some of these cases it's that we are fiscally inefficient and in terms of what the contributors to the cost of being located in these high agglomeration locations whether it be local fiscal policy the taxes that are being levied issues around the quality of life and quality of infrastructure I'm done it's a tough place to live thanks Gordon hi my word um thanks very much it really a two to four Sam a two of the four so it was really impressive now Jerry's got his hand up but I'm afraid Jerry no no no please please let him Jerry please jump in rich Rick Rick Paz is here hi Rick do you mind a minute or so well just a minute thanks I can do it in one minute yeah come on Jerry go for a few quick comments one on on Richard's comment about people moving out of San Francisco and New York for San Francisco for example they didn't move out of the bay area they just moved to cheaper apartments further out because they could they were working from home so I'm not sure that it was they wanted freedom rather than lower rents for the year that they were out and second comment on the map which I thought was really significant about open spaces relative I think one needs to dig down a little deeper so for example in Los Angeles you have high proximity to low to open spaces lots of open spaces in the mountains have run through the city but you don't have transportation from the lower income neighborhoods to those open spaces so they could be a hundred miles away as opposed to the 10 miles that they are I did that right Gordon I look you know beautiful um you've um yeah we we like both don't we Sam yeah great totally agree I think what we see is that in a lot of cases the migration is just a little bit further out if you live in New York uh you know in maximizing your utility function you need to be close to work because you know sort of it's it's costly in terms of time and patience and sanity to people to have to commute you know a lot in New York City the but I think what we see is that with people expecting that you know I'm going to go into the office three days a week two and a half um the geographic radius over which they can optimize their location preference is just wider and so they're maybe outside the core okay to someone who follows Zillow and house prices outside of New York City through not through to the Connecticut border what we saw was house prices in big blocks beautiful houses go up through the pandemic what we're seeing is them going down on the other side of the pandemic interesting moment people are coming back to the city Sam watch out for them okay um thank you very much uh Sam just super good and let me pass over to Richard Pisa Pisa here Pisa sorry I'm being English uh asking the obvious question but anyway so um Richard over to you oh it's a pleasure to take part in this and I'm very grateful to Patrice for not only writing a very provocative and thoughtful book but uh teeing up a very interesting conversation and I know I've learned a lot and I hope others have as well the uh current conversation actually tees up what I wanted to focus on which has to do with is the pandemic uh causing a return to urban sprawl uh before I jump into this let me just say that a few years ago we did a small research design project on Covent Garden by for the owner which is a big insurance company and at the time Covent Garden was actually starting to fall on hard times the the retail was really not in great shape and and they were bemoaning the fact that all the retail around Covent Garden was sort of low-end tourist stuff and and so we were looking at design interventions to take advantage of the wonderful public space around Covent Garden with temporary facilities to really enhance programming which I think just speaks to how as Patrice very so nicely notes how these critical center center city areas change over time and how they go up and down but places like Covent Garden will always be very special and I think the perspective of the forces that cause them to go up or down as Patrice emphasizes in her book or I get to the heart of why all of us urbanologists love the study of cities so with that brief preamble let me just jump into a brief presentation on some research that I'm doing right now so can people see my screen all good thanks Richie all good okay thank you so it happens that urban sprawl has been a topic I've been writing about for a lot of my career and I was pleased to see with the change from in migration to out migration from major cities that I think this raises the question again are we seeing a fundamental shift in patterns of migration and of course that has huge implications for the future of cities so as you've noted there are many stories about people moving to the exerbs and to rural areas it was brought about by people working from home the need to commute into the office either not at all or looking forward one or two times a week and the question is this really a fundamental shift in migration patterns or is it a natural change as millennial's marry out of children move the suburbs for schools and erase their children so looking back on writings about urban sprawl it's a very misused term in my view it's been a catchall time for everything that's bad about urban growth including congestion blight monotonous urban development ecological destruction and so forth there have been many strategies to try to control urban sprawl one that I was personally involved in years ago was when florida passed concurrency legislation that required developers to only develop in those areas that had traffic intersections that were rated a b or c whereas d e and f for the too much congestion and florida was very surprised to find that instead of pushing development back into the city it tended to force development even further out because the worst congestion was in the suburbs where and the city where development was occurring and the way developers could get around this concurrency legislation and fight intersections that were congestion was go out to the rural areas so it actually had a very counterintuitive impact and often I think that's what happens with urban policies designed to control urban growth so when you read about sprawling cities today Ewing and Hamedi point out that charlotte is competing to be the next Atlanta and being from Dallas Dallas is always vied with Atlanta to see who can have the most urban sprawl now we've seen an urban renaissance from 1990 to 2015 no one's written about this more than Richard florida with this fantastic work on the creative class and who is it that has helped cities turn around and I think there's a consensus that signs of intercity revitalization were appearing in the early 80s and began to grow in the 1990s and by the early 2000s especially with the growing growth of technology and life science firms wanting to move back to the cities repurposing post-industrial real estate and the focus on eds and meds we've really seen a rebirth of urban cores and one explanation for the population influx is that these are the most desirable places for young college educated migrants who desire services like restaurants bars hair salons and similar places so in a recent study by brahmbeck looking at where growth was occurring in four cities if you look at where growth was occurring in atlanta in the upper left you can see in the period from 2000 to 2010 atlantic grew even far faster farther out from the city core whereas boston was actually grew well it was quite flat philadelphia showed some uptick but comparing 1990 to 2000 the later decade the growth in philadelphia you can see actually was greater close into the center city and flatter as you move farther out and portland similarly the very high growth in the 20 to 30 kilometers from the city was reduced in the early 2000s this slide's a little bit hard to read but if you just look at the right hand corner of it what we see is that the most recent change of migration and this is after 2015 the places that were growing the fastest were suburbs followed by ex herbs followed by mid-sized metros growing less than well actually not growing we had a small metros there was an uptick in ex herbs which were still not growing there was more accurate migration than an in migration and at the bottom we saw that major metro cores actually went down now this of course is before the pandemic effects so if we look at monthly net out migration from in the last two years there's been a huge uptick in monthly urban net urban out migration now in there's some articles just came out yesterday that we're pointing out that this net out migration was more caused by not the fact that more people were moving out but fewer people were moving back into the urban core so is this a short term or a long term change is it a return to urban sprawl and I think what we find is attention between technology and life science firms who are creating the millennials desire for 24-hour cities and other firms that are not so focused on these areas that particularly cater to the to the millennials and the kinds of lifestyles they prefer and just this brings you to the end of my prepared remarks I happen to be teaching a class right now on ESG and I know that's been part of our conversation I do think that ESG we're at a pitiful moment in in development firms I think ESG is here to say while yes as was noted a little earlier there's some pandering to ESG by the financial firms are trying to get a leg up on raising money from other private equity funds and so forth I think that the development industry which in the US is probably at least six years behind Europe and facing up to ESG demands and requirements but this is the freight train coming down the track and I think is going to fundamentally change how development well how developers deliver buildings we're seeing this first I think in the office market and but it's coming to all all aspects of development and well while whereas right now there's more emphasis I think on the E on the environmental side of the equation that increasingly there's going to be a focus on the social and governance sides so let me stop my share and see if I can we can get some dialogue going thank you very much Richard absolutely you know interestingly as the development of cities occurs we have this larger dynamic of you know into the center and away from the center and all sorts of reasons driving this and I'm very you know I'm really not surprised that you're adding the ESG issues to this because they're absolutely integrated in how we go about that dynamic but thank you for that that was you know really really a wonderful parlay of what is what happened way back then in terms of the sprawl in London from the west of the city from the city center west towards Westminster and in fact then turned around to be a healthier more optimal space for people and so on and then interestingly as we see today as you say areas come and go and once upon a time that square mile of London city was not in favour in terms of location by by businesses and major major tenants in fact Canary Wharf was built and developed primarily to offer an alternative but what's happening now everyone's flooding back to that square mile of the city and those buildings are going up so you know an extraordinary dynamic that keeps that keeps changing and which you explain very very nicely in that notion of sprawl and you know back and forth so thank you um Gordon would you have a question yeah yeah I've got a couple of questions Richard I I mean I I get it gained a lot from listening to you and I was really you know a lot so the questions I'm going to ask a really sort of eliciting comment on whether my presuppositions are correct or not I've heard two comments recently about the US um housing industry and they go this follows first um the housing industry used to be are driven by the fact that people owned a lot of land and wanted to realise the value of land so they built houses on them and sold them so in a sense the argument there was that it wasn't really housing it was the capitalisation of the value of the land that they were trying to realise and that we got basically what we got in the American city by virtue of the land holdings of these developers and so sort of housing was the byproduct of realising the value of land the second comment I've heard recently is uh an immense um or accelerating concentration in the US housing development industry such that there are more and more well more and more of the housing each year is produced by fewer and fewer but larger firms so I wonder if you'd comment on those two comments that have been made to me recently first is it that actually in the past the urban world that we got was the urban world that was if you like was the property that it was built on and wasn't actually conceived other than realising the property land and then the question the second question is is the industry consolidating around really big players and what's what do you think is the likely implications of that these are two great questions first unlike England where I spent a lot of time since that's where I did my dissertation that there are very few cities where one has dominant players who have huge tracts of land and I really don't think well yes every landowner every farmer would like to someday monetize his property but I mean it's well known why people start with houses at the urban fringe that's what is in demand and if you're trying to monetize your property you just looking at where the demand is and I've worked on everything from small subdivisions my specialty is new towns and I guarantee if you if you have a 6,000 acres or up to 20,000 acres and they're trying to develop that land that the great majority of the land is going to go into housing because that's where the demand is now what to me is very interesting is the best planned suburban and ex-urban places are ones that carefully they make room for the future infill of higher density housing and also create town centers and shopping nodes that become the places that are will be very exciting I think you can look at your own new towns in England and see you know some of the earliest are still largely residential so personally I don't see this as just a phenomenon of landowners who are trying to monetize their land and put houses there I think is more a reflection of the market and supply and demand on the issue of consolidation the housing industry you have to remember that we start from one of the least concentrated industries across the whole spectrum so there really aren't that many well in the good old days and I've seen the current numbers but I think it was the five largest players accounted for less than five percent of the homes built very very different from the car industry where the five largest players would be you know almost all the cars built so yes there is consolidation in the industry and that I actually think on balance may be having a good impact at least on the quality of what gets built that firms larger firms that are doing multiple subdivisions of a thousand homes or more I think are able to maintain standards factory development processes and just efficiencies of design and building and marketing and finance that overall lead to a better product and it also in the battle between the cities and developers where you have a very large developer they will become much more of the focus and much more a balanced negotiation I think in in this developer paying for and providing more urban services than where you don't have consolidation and just small individual developers like me doing small subdivisions where we just look for land and we're not negotiating to offer any set of public goods beyond what we might be required to could can I just ask one follow-up question about housing dynamics in the US where do you place Zillow in this yes I know it's in the media and all this kind of stuff but but but it is an intervention in sort of orchestrating demand and supply transparency and pricing the visual imagery gives you some sense of what you get for your money it's really good on placing in terms of location in relation to other places is Zillow just an extension of real estate dynamics or is it actually a game changer but I was chuckling because Zillow is most in the news because of the failure of their AI to accurately predict housing prices and the fact that they've lost a couple of billion dollars I think in Phoenix which most of us academics who follow Zillow are not surprised because we think they're still and AI hasn't quite gotten the point of replacing all the factors that we humans are able to incorporate as we assess value but Zillow is one of a number of firms that are on the forefront of of proctech well the revolution in proctech that is absolutely going to have huge impact on the real estate markets through transparency, greater data, easier interface between those companies and buyers and share knowledge of the market and so I think Zillow or I may be critical that often if you look at their values they're based on property taxes and may be 50% off of what someone on the ground knows is the true value over time those get better and I think overall that's a very good thing for the real estate market and is absolutely a game changer not just for Zillow but the other firms in that space okay look I'll pass it over to Richard Florida if he's here or no I might just jump in please go ahead and yes Richard Green who will be speaking to us a little later just is providing a note here to us in our audience that there's a paper by Lewis Quintero that supports the idea that local concentration that the local concentration of house home building or house building subdivisions is actually having a price effect and they they are tracking that so that you know contributes to that discussion that Richard had raised so thank you for that Richard, Richard Green, Richard Paisa now you are renowned from even my days of studying real estate for having done the inaugural book on real estate development a textbook on real estate development published by the urban land institute I'm not going to mention the date of the original publication but now into its fifth or sixth edition called professional real estate development and so you know it was it was really your book and it's attempt to talk about well it's its success in talking about and describing the process that made me realize that there is so little known and researched and understood about this process and so and and you and I have both seen the rising of real estate education in particular even at this graduate school level over these decades since you've written the book and I was wondering if you noticed differences in how that education might proceed today with respect to you know what you what you presented in that book initially well first thanks for your kind comments about the book I'm right now in the middle of finishing up the fourth edition I write a new edition every 10 years it's pretty much a largely new book all new cases and everything but I don't want anybody to run for the hills but I would just note that every time I publish the book it's usually just after there has been a cataclysmic event starting with starting with the snell crisis then the tech crisis then the great financial crisis and now the pandemic and and we hope before the book actually hits the street in the next year or so that there isn't some other crisis but yes I as a I got my start actually as a developer I started with Gerald Heinz I'm from Houston and I thought I got my job as through my great credentials and it turned out because he knew my father and remembered him kindly and and got my start on new towns and then went into home building and apartment building and more recently industrial and other stuff so I've always had some foot in the development side and and I've just personally been fascinated by the delivery of different kinds of real estate and I found that the I know sort of my main competitor is Mike Miles book also published by the uli which takes more of a process approach and I guess the main distinction is I think each product the way it gets delivered is quite different so that I I approach it through the lens of land development apartment development office retail and so forth and of course the changes that are happening and each of those product types from retail to office residential are just so enormous you know over a 10-year span and things are happening now that one really never dreamed of 10 years ago yes she was on the horizon sustainability was but prop tech really was in its infancy and no one expected a pandemic so no Patrice I'm just thrilled that that you are both leading over the one of the great programs the other thing I just note on education is that over the last 50 years we've seen a real professionalization of how people get educated in real estate I did my degree in the Department of Land Economy in in Cambridge when I thought land economy had to do with land development it turned out it was about the conversion of the rural tribal societies to more sophisticated societies but I was there as Gordon Cameron came in and then the change to urban development as has ascended I see Richard is here maybe because Richard's similar book on the creative class and in fact we met he may not remember at the RICS many years ago as that was just coming out of so Richard I do remember Richard and thank you for that fantastic presentation we don't we don't I can see Gordon want to interject because we're almost out of time no I thank you for being part of this and thank you for all you've done I guess if I had one quick question if you can make a half-minute response is what do you think the biggest impact of the pan the single biggest impact of the pandemic will be on real estate oh that's a tough one top three well I think of it in terms of of the product types I think it's it's very much exacerbated the pace of online retail I think it's really changed totally how people are going to work and the implications of office development for my book I was talking to Owen Thomas yesterday who was pointing out how many of these older office buildings that one would like to convert to residential have floor plates that simply don't make that feasible so there are going to be so many changes related to the pandemic that I think are going to change you know what gets developed and how it gets developed and I also as I was presenting think there it I think the jury is out but I do think we're going to see a more of a return to a out migration and while certain cities that are huge and the texts and life sciences like Seattle and Boston will do very well with the core I think many other cities are going to have a real real trouble energizing their downtowns and we'll continue to see this change thank you very much Richard next time you go past Gunn Hall look up on the corner as it fronts on to what Broadway or no near looking towards Broadway that was my office once so just going knock on the door and say Gordon Clark was once here but anyway well thank you again he was yes I remember thank you thank you thank you so this brings us to Rachel weather is Rachel can you all hear me okay yes thank you welcome Rachel good to see you yeah thank you thanks Patrice nice to see you all even through this strange and disembodied format we're all we're all expert zoomers now it still feels a little weird but no no it's great to see you Rachel nice to see you all why don't you off you go okay sure well my presentation is a little different from the two previous ones and in the sort of the second panel but I'm more of a political economist or an economic sociologist or an urban planner I teach in the urban planning department at the University of Illinois Chicago and I've been conducting research on development and urban development for the last 10 or 15 years so I'm assuming that you've all read the book by Tom Wolf called a man in full it came out in 1998 and even if you haven't you're in luck because apparently Netflix has optioned the rights to the book and the actress Regina King who I love is going to be directing a six-part series based on the book um but in the book the protagonist is a developer named Charles Croker and he is a developer and he's in Atlanta and he's there's one scene in the book where he's looking out the window of his private plane and he's admiring the skyline of Atlanta and he says to himself I did that that's my handiwork I'm one of the giants who built the city I'm a star so I just want to sort of start off with the idea that developers like Charlie Croker we often see satirized in pop culture for having giant egos right from George Potter and it's a wonderful life to George Bluth in the television show Arrested Development and there's some basis for these caricatures you know if you read the autobiographies of real estate giants like James Rouse or Donald Trump these authors portray themselves as lone wolves right as lone visionaries in whose hands the keys to the city can be found um and I've been as I said sort of I've been interviewing a lot of developers over the last couple of years and I do find that they often subscribe to a theory of the world that grants them considerable agency as strategic risk takers in an environment that is according to them entirely of their own making so you can you can see how easy it is to develop a kind of god complex when you do have so much influence over the physical settings and which millions of people go about their daily lives now what I one of the one of the many reasons why I appreciate Patrice's opus is um that we get a much more nuanced analysis of these individuals um of the kind of corporate organization that development takes you know in the intervening couple of centuries you know since the you know 1600 1700s about which she's doing a lot of her writing and her history and so we really see um commercial real estate developers portrayed I think in a more realistic way we learn about how this new professional class emerged in the Anglo-American world and how certain financial and legal practices became established norms in this field and as we've already said Patrice emphasizes the significance of London in um the 17th and 18th centuries because it's during this period that we see these kind of nascent developers who were somewhat adjacent to the landed aristocracy but still were sort of titled men like like earls and we see them completing successful large-scale building projects against all odds so we hear about the Earl of Southamptons Bloomsbury and the earls of Bedford's uh you know development of Covent Gardens and even reckless Nicholas Barben who developed Red Lion Square and its environment its environs in Holborn without the government permissions to even to do so um and it's interesting I kind of thought of him uh in terms of you know his abuses of his contractors and the court system is something of a 17th century Donald Trump um but regardless their designs these these early developers became models for beneficent harmonious and high quality residential and mixed-use developments for which central London is still renowned and their methods of financing their methods of gaining site control laying out different land uses and engaging in site planning uh project management and marketing are still in use today so I think this book is really helpful for seeing this kind of uh long duray the sort of the these these historical antecedents for a lot of the practices that as I said have become sort of norms or conventions in the field and I think also from Patrice's book we see a lot to admire about commercial real estate developers that you don't you know hear about in Tom Wolf's book um Patrice makes clear that private developers were creating planned spaces long before public sector planners ever got in on the action right and we don't see the sort of um you know if you look at the sort of the history of state formation and the development of municipal governments you know it's sort of understandable that they were not yet really sort of players in this field but you see master developers in some ways um you know again sort of acting as sort of precursors to what public planners have have you know sort of learned how to do um they were able to mandate a uniformity of style that temporarily tamed the chaos of urbanism at this time and they were not seeking just to maximize the rental potential of their buildings but instead were concerned about the public types or collective amenities public gardens piazza's courtyards um and they also experimented with social planning because they were creating units with very different designs and price points and so we're sort of thinking about what kind I mean in some ways the precursor to kind of the mixed income developments that have replaced you know section eight art you know sort of public housing in the united states they were also strategic risk takers they were the first one ones on the dance floor um they helped open up new markets and absorb some of the initial risks of building in particular places and in doing so they de-risked those neighborhoods or particular building types and paved the way for others maybe with less capital less information um and you know sort of fewer social networks to follow suit and they were uh I'm not sure where I got this expression I think it was from the um uh there's a book by Miller called here's the deal which is about the it sort of tells the history of the urban development in the city of Chicago by looking at just one parcel of land and it's also a sort of a great companion piece for Patrice's book if other instructors and professors are looking for the teaching materials um but he was talking about Arthur Rubloff who's a famous developer and property manager in Chicago and called him a radical reimaginer of land and I have always really appreciated that phrase um the ability of the capacity to see the development potential in places that few others could see it so I think Patrice is trying to get a handle on and sort of define the parameters boundaries contours of this field or profession um called commercial real estate development and that's kind of hard to do that's a hard task because you know human beings have been building physical structures to house themselves and their business operations since time in memorial um you know we didn't have the urban land institute back in the 17th century so you know it's it's not it's not such a simple task and even today it's sometimes hard to get a handle on who is and is not a developer when you see uh the field is crowded as it is with general contractors and brokers and property managers and owners reps and the financiers and the corporate tenants and the architects and you do see a restructuring within this industry I mean Gordon was asking this question about consolidation and concentration you do see the sort of firms themselves the corporate organizations themselves sort of shapeshifting over time and in some sort of periods of time we do see more vertical integration so you have developers that also you know are REITs you know they're real estate investment trusts or they also have brokerage firms or they are also um lenders you know they're also um you know mortgage brokers or mortgage banks so it's sometimes tough to distinguish between who is and who is not a developer or sort of part of the development team and when I teach this material I like to tell this my students that developers are like the producers of a movie not to keep on using kind of you know pop culture references but they're involved in every aspect of the project you know they're arranging financing and hiring the general contractor they're the ones whose collateral and reputation and equity is on the line in the event that the project goes south but in some ways um it's kind of less what developers do and more sort of why they do it that helps to define them and patrice argues that what really sets the professional developer apart from the amateur from the occupant from the landlord or property manager is the act of speculation of speculating for for profit um so patrice's book for me got me thinking got me speculating about the meaning of speculation and also it's kind of ethical or moral valence so just looking at its etymology speculation has a dual meaning right just from the sentence I just spoke you can see that uh you know in on one hand speculation means to think about or to contemplate the future and in latin speculatio means observation or the act of looking but it also means to take a risky position in that future with capital that turns on an envisioned or expected outcome so there's a sort of element of expectancy there's an element of risk um and there's a kind of dependence on the future that is very important to commercial real estate so commercial developers are speculators in that they produce space to generate future income and capital gains it's really the capital gains it's that appreciation where the the real treasure lies um so they treat landed property more like a financial asset more like a stock and bond than as an input in production so writing at the in the aftermath of the great depression john maynard kaines wrote um or he defined speculation as a financial practice that involves attempts to anticipate or outwit short-term price movements ahead of the general public and he distinguishes speculation from enterprise which is in his mind earning money in the productive economy so that productive economy you see sort of reappear over and over again in these sort of um different analyses of what speculation is and kaines also famously wrote that speculation and investment that these were both subject to animal spirits right the spontaneous urge to act motivated more by emotion than rationality so during the time when patrice was writing about you know her developers in in london um speculation had a very bad rap up until really the 19th century the late 19th century when we see the development of you know the of the borus and stock exchange speculating whether it was on tulip bulbs or on property was really viewed as quite a disreputable and the sort of boundaries between speculation and sort of acceptable economic activity were policed um by religious authorities there was a sort of an irreligious or a you know sort of connotation associated with speculation I think you know it was considered wild and savage compulsive and uninformed um max vapor who manual brought up early on and who has you know no uh you know blood blood relation to myself um he felt speculation was pre-modern in that it was out of line with the protest protestant ethics of self-discipline and rationality um marx also thought poorly of property speculation because he did not believe that it involves any productive labor um and you know janelle was also talking about sort of lock and you can go back to ricardo and to henry george right who talk about this sort of the kind of unearned increment from from investing in land that you could just own land and it can increase in value without you having to do anything to it so you know marx argued that the value of land was a structurally necessary necessary fiction because so little labor went into it and marx to the to the stay continue to to prefer to talk in terms of rents right for the ground rents that can be generated by land as opposed to something like value because they ascribe to a kind of of the labor theory of value so as I mentioned speculation really only became viewed as a legitimate economic practice in the late 1800s uh the stock market channeled some of the sort of popular passion for gambling and games of chance and then you know I see a couple of decades later at least in the united states more government oversight over financial activities uh to help better inform and protect investors which with what eventually became the corpus of securities regulation so we see sort of the institutional foundations for speculative investment taking place that kind of helped to sort of stabilize and popularize um and make it more acceptable made made speculation more more legitimate so I was wondering about what the sort of ethical or moral valence of property speculation is today in an era of financialized capitalism or what some have called the asset economy so on one hand we're witnessing an extraordinary ability for you know ordinary people to engage in real estate speculation whether it's your pension fund owning a slice of you know Richard's new residential tower in in Toronto or the the new possibilities opened up by crowdfunding or the fact that shows like flip that house or house flippers are so popular either video games or that monitoring Zillow has become a national pastime apparently we are all speculators now and I don't know how many of you saw there's my prop you know the front cover of the New York Times magazine this past Sunday was about housing prices in Austin Texas and sort of made this point that you know because of this sort of um you know the fast pace of transactions and the you know very high rates of price appreciation in Austin again sort of anybody who wants to buy in that growing market is now a speculator I take issue with their definitions of speculation but anyways I've been interviewing these developers and like I say no one really wants to own up to this term right so there's still a kind of a reticence um to being called a property you know to be being called a property speculator even though developers call certain buildings of theirs speculative right if you're building a building and you don't have it released um you know if you're if you're building and you're expecting or anticipating that you know the occupants will come you know you you very casually call that spec development but the individuals themselves were reluctant to be called specular speculators and the developers I interviewed you know they were very quick to distinguish themselves from pure speculators who they call who they consider to be um folks like who are banking and flipping land he said oh don't you know some of those are the real speculators um because they're not adding to or they're not changing them physically they're just buying and selling they're just exchange you know they're investors and they're quickly buying and selling either buildings and structures uh or you know and or the you know and the land that they came on or just simply land and you do see a lot of these these kind of sort of acrobatics in order to distinguish between productive labor right when speculating you know speculation still makes people uncomfortable because of its posed lack of productive labor um economist bill jane way likes to distinguish between non-productive bubbles like the dutch tulip bubble and the recent housing bubble and productive ones such as the tech bubble of the 1990s so developers expend labor to build environments and urban spaces in which we all live and work and we play but they are still building speculatively in that they again they may not know who their tenants are um but they are also you know they are expecting the assets that they build to increase in value but it's hard to argue that they do not put any productive labor into this into their work i mean i'm i uh i'm not just an academic but i am i sit on the board of a a small development organization a public private development organization um and i see how much work is involved particularly when there's nimby sentiments expressed and i see how long and drawn out of the process is but but you know you definitely see the the the productive labor that goes into developing the built environment um but i also think again this sort of speaks to our present moment that speculation gets a bad rap because the price of property as a financial asset has become increasingly separated from the asset itself the the sort of the um you know the the the apartment building or the office tower the the asset the economic asset that is generating cash flows um and i think there's some insecurity or uncomfortableness about the sort of active sort of dematerialization um so you know i and i do think that this in this time of financialization um that development needs something very different than it did for say the second earl of bedford right whether it's you know bankers you know i feel like you know in previous eras uh bankers and investors really only entered into the picture when visionary developers sought backing to make their plans a reality and today many people would argue that you kind of have the tail wagging the dog the influence of financial markets over what gets built and where it gets built um has grown a lot right property and financial markets are much more tightly coupled and the value of property is more intimately related to risk and to the credit system and to the stock market we've got complex securities that are built on the backs of real estate assets and their mortgages um and many of the developers that i was talking about when i asked them like how did they know when it was the right time to build they weren't looking at demographic trends or market analysis they were looking at cmbs yields they were looking at commercial mortgage backed securities and how they were doing so as the instruments and processes become more dematerialized and the distance that derrick mentioned between investor and place becomes more attenuated the buildings sometimes drop out of the picture i mean you can have securities that are being hedged against other you know ostensibly property-based securities um and other people have mentioned this but that's partly driven by or the sort of short-term uh horizons of developers are partly driven by the short-term horizons of investors and of capital markets um and the key to most speculative development as patrice notes in her book is getting one's money out of the project and unloading one's holdings as quickly as possible during what property developers know are finite windows of opportunity and i think though although the book highlights the work of a few long termers most developers today tend to focus myopically on the short-term performance of their buildings rather than serving future user needs and market conditions and this is concerning obviously for all the reasons we've just been talking about in terms of esg and responding to climate change but you know the sort of accelerated path pace of transactions um is something that it's easy to get addicted to and when because when buildings are flipped um you know that that brings sort of immediate returns and benefits to the original developers prices rise and the building's occupancy becomes someone else's problem so this deeply ingrained short-termism is encouraged i would argue by capital markets who put pressure on developers to forego the kinds of improvements that patrice praises in her in her book um you know things like courtyards and um you know really sort of high quality site design because those things have high fixed costs and potentially long run payoffs sometimes they are very difficult to capitalize into the sort of immediate price of uh of property and so they often have to be sort of pride from developers unwilling hands by municipalities who bargain for them these public benefits in exchange for additional floor area and development rights so just in some i realize i'm a little out of time i just want to say that property speculation in a in a capitalist economy um means sort of building to this sort of the highest and best use which often involves uh price inflation and developers are very dependent on that on that price appreciation and and inflation uh because they're able to extract rents from their monopoly ownership of space but we also have to think about those who are not able to do that and those who do not have that property claim to space and i really do think that some of the the projects that we've been talking about today and um and the the profitability of real estate does it does have the potential to exacerbate asset and place-based inequities um you know and have and and can lead to the kinds of dispossession and displacement that we've talked about so that makes me a little shy about um trying to resuscitate the reputation of speculative developers even though i recognize all the good things they bring and that the incentive of profit leads them to do oftentimes great things in cities so appreciating patrice's wonderful historical research and compelling argument i still want us to sort of think about um the fact that the ability to accumulate capital from speculation is unevenly distributed and that also needs to be sort of part of this story so i will stop here wow that that was really um very very impressive very helpful very helpful fabulous Rachel thank you oh and your conversations with the black hats or are they the white hats um hard to say sometimes any any giveaway um clues you know you're sitting there for five minutes and you realize definitely black hat or is it maybe a white hat um you know i've interviewed all kinds of developers i mean from like i say sort of small land flippers on the south side of chicago we're just waiting until there's more speculative activity right because it's really hard to speculate on your own it's not a kind of solo activity um and again this goes back to manuals early your comments about how um there's there needs to be some coordination and cooperation and you need more of a crowd it's hard to it's it is hard to do it on your on your own no matter how big of a developer you are and how big of a project um but i've you know between talking to them but then also some of the big global real estate firms you know the what the the ones who are multi-divisional and vertically integrated and who have operations yeah around the world you know the jll's and the cdres magicians fires and so you know sort of pretty big range interesting and uh well rachel thank you so much you're absolutely right and that's fascinating and i'll be so keen to read about these people um you know one thing and you know like you i've wrestled with this who is a developer and in fact you know what i try to sort of start to unearth in this book is that speculators or flippers of land are not developers and in fact you know it although i do raise nicolas barban as the one who came and did this with you know great fervor um you know that's where i said it was all ruined what a developer could do and should be doing was all about all ruined because he was so solely interested on extracting the benefit as quickly as possible and moving it on and that benefit you're absolutely right is the appreciation of value appreciation that's speculative part whereas what originally began and what still remains important for long-term holders is the ongoing rental income from someone's productive use and so you know and that's what you refer to as enterprise and i am so grateful that is exactly the term you know real estate development should be an enterprise like being a lawyer is an enterprise we are going to put our skills to work does a lawyer speculate as to whether a contingency fee of taking on this matter is going to be hugely profitable maybe they do within the contingency fee system and and and i would say just as the contingency fee system may have created some moral degeneracy for lawyers it also creates the moral degeneracy of real estate developers so you know i think that you know we're both i really appreciate it how you've identified that developers do do something they they should do something and you know that sort of supports and the problem with what they do speculative speculatively which i really put on and as by students know i found the table on being that exit value that exit value which is all appreciation what a lot of nonsense and that speculation yes so thank you but it is hard it hard it is hard to distinguish the two right because if we if we're looking at if we're estimating the future value the sales value the termination value of a building right it's going to take into account the the you know the rental income yes that that can be generated from a place so it's not as it's it's very that's very hard to distinguish and it is very hard and the problem is we use that pro forma that takes annual in that holding period all the annual and you know net income and then takes the income and expected for the following year but the key is it's not just that rental income the real problem that is applied is called the capitalization that is applied to that and that is where you know the belief system and you know and and so on rental growth you know can be probably extrapolated by a very clever computer and there's the magic involved in choosing your cap rate right if you're off if you're you know change that by a you know whatever point zero zero the basic point whatever you love a very different project or a very different expected project or exactly exactly and that's what they'd like to believe in and that's where all the you know the the card game begins although you know so you know but thank you I appreciate that it's you know it's so so rarely do urbanists really you know break out what developers are doing and I really appreciate you're doing that for us thank you and as I said you know you've got 25 minutes max yep the if you finish earlier than that you can have more questions how about that beautiful so hi everybody I'm Ashby monk it's a real pleasure to be here this book is is a fabulous book and I I heard somebody earlier talk about just like the feel of it and like the desire to assign it to students and I have that same sense I so rarely protect books from my pen but in this case I did not mark it up with a pen because it's just such a lovely item it should be on a coffee table without my notes anyway so I'm Ashby I I run a new research program at Stanford as of Monday this week so I actually have a new job I used to be the executive director of the Global Project Center and as of Monday I'm the executive director of Stanford's research initiative on long-term investing so I as you can imagine I'm going to spend a little bit of time talking about the world of long-term investing rooting it in this fabulous book providing some interpretations out of the book and then moving into the world of the future as as an academic inside an engineering school we have a pretty unique mandate to solve problems so our literally our charter includes the solutions to big problems at the engineering school which can leave some academics feeling a little bit uncomfortable as we move into that world of normativity and subjectivity but I'll try to control it for this this group but yes we often think about how to solve problems and how to interpret from the models and there's some great models in this book so I'll jump into it I study investors and investors are in the business of making projections they have wealth today some form of financial capital today you need money to make money is the old saying and they allocate their present day financial capital to investment opportunities with an explicit expectation to receive some future economic benefit I take my cash and I don't spend it today because I want more cash in the future as this implies the process of giving up your present day consumption means having confidence in your ability to make predictions about the future about your portfolio's value in the future about the value of assets that you're investing in the future and so the the best investors according to the work that I've done with Gordon Clark and a few of the others on this conference try to understand how their own objectives interact with the investment opportunities that exist in the world they seek to define their own risk tolerance and then they seek to understand the risk and return profiles of the assets that they're going to rely on to go and generate performance and that's my co-author back there that just walked by his name is mega dog so this can be challenging because some investors have extremely long horizons and certain assets have very long life spans I can tell you that some of the pension funds that I have studied have 100 year liabilities on their books today so they are thinking about what could prevent them from meeting their objectives in 100 years the canada pension plan states on their website they have a 75 year holding period an investment period that's a very long time and then the assets themselves can have very long durations which may not affect everybody if you can sell the asset today in a viable market but it could affect the price upon which you sell it if certain risks materialize in the next 10 years even if it's a 50 year asset the price at which you can sell that asset in 10 years time changes real estate as an example we're going to talk about a lot today I've been talking about exposes investors to an intergenerational location bound risk the buildings are often seen as permanent when they're put up there is no intent to remove them and they are immovable and this means that analyzing those long-term risks is much more difficult but also much more important if you're a long-term investor investing in a long-term asset you need tools to really begin to understand what are the environmental societal and governance threats ESG that could prevent us from achieving our goals and so this is precisely why real estate has been so important in my work but also important for the transformation of finance it's one of those asset classes we might argue the first asset class that truly required investors to consider intergenerational risk the long-term value of real estate is a function of its long-term resilience and that's why the the title of my paper for this is value the city intergenerational risks returns and real estate and I've been informed and truly inspired by patrice's book to see real estate as a role model for the broader investment industry so taking that lens as I always do of the world of capital allocators the book reminds us of that interplay and I would even argue mutual dependence of real estate developers and capital markets today as in the past the book notes sorry I'm getting text messages somehow as the book notes there are really only three core goals of developing real estate and one is to create financial assets for capital markets so that's a big goal and and the book puts the provision of financial assets to capital markets on similar footing with the provision of shelter and the provision of public amenities and this means that real estate developers are incredibly well attuned to the needs of investors the developers need to understand the investors on page 277 patrice talks about how capital is a critical part of the model of urban development costs are incurred to produce assets which will deliver a regular revenue stream over the length of the leases of the completed buildings and over time that revenue will repay the capital and provide a competitive compensation to the investor for the use of that capital this is going back half a thousand years you know this is an incredible foundation upon which to begin to understand and analyze the role of financial markets and its interaction and some of our key societal needs put another way the investment community has greatly influenced the evaluation of real estate so I think there was a certain point on page 334 talked about how investors push developers to privilege certain types of assets such as the upper middle class residential projects over other types so that's an interesting influence of the financial community on the built environment at the same time the real estate developments have helped to shape financial markets the market led concept evaluation has been transformational for the pricing of all sorts of other durable goods not just real estate and so my interpretation of this is as real estate having the capacity to change financial markets and if done correctly improve them by rooting them more directly in long term is obviously we've seen the real estate industry have interesting consequences to the financial markets in the past decade but I think there's still an opportunity to use this interaction to our benefit especially as I'm going to talk about in a second to solve problems of climate change in the book's conclusion we are told that the investment community needs to change their methods of valuation to deliver a longer term understanding of the stakeholders needs and requirements patrice calls on us to focus on the long term by better calibrating the risks and returns beyond the dominant narratives of short-term capital markets I feel like I've almost written that sentence 20 times in different papers talking about my work trying to push the capital market community to move beyond short term ism it's amazing to see that reflected through the developer community in the built environment it's a very similar set of problems and I think the fact that both are suffering from those problems speaks to their mutual dependence and so that's the opportunity here and this is almost where my point of departure is because I asked the question can real estate development be the role model for long term ism among investors generally and you know the problem that I see everybody trying to focus on that is the kind of quintessential long term problem is that of climate change and it's becoming obviously increasingly clear there is an interaction between climate change in the built environment and the question that we all are wondering is where and when will the investment in capital market community truly begin to integrate climate hazards and risks and vulnerabilities into their decision making such that that decision making can then flow back into the built environment and change truly the shape of the world we live and make it more resilient and so that's what I want to speak about which builds on the model in the book there's huge vulnerability to the built environment today from climate hazards there's a bunch of data that I have in my paper on this you know the economists said that under aggressive climate change scenarios 10 percent of global assets are at risk from climate change and and there's you know Munich re said the global losses from natural disasters jumped in 22 20 to 210 billion compared to 166 billion in 2019 and all of these folks the economists Munich re project that these numbers are going to continue to rise and the kind of interesting thing here is a third of these losses are generally uninsured which means that the owners of the assets the long-term investors are getting hit with the full weight of a third of those losses and so all of a sudden climate change is becoming incredibly material to that profit motive and that at their end is the real opportunity to transform how they deploy capital and and I think the financial markets will be called upon to help incentivize and manage this transformation to a more resilient built environment just as the provision of shelter we learn in the book was intertwined with the investor's profit motives so too will the provision of climate resilience be a function of risk and return calculations of today's investors as patrice expand explains on page 285 successful real estate projects must take a long-term view which I again interpret to mean that modern successful real estate projects must consider climate this is what the entire world is searching to do and this is a focal point that could actually serve as a role model for the world if investors can get the right signals and they can meaningfully integrate climate change into their core risk decision making we can rebuild this not only capital market decision-making process but then that ideally would flow through into the real estate developers to integrate climate change into their plans and intentions building a virtuous cycle on the back of data and process and valuation and pricing. Encouragingly the risk of climate damage has triggered a huge uptake in ESG and climate data analytics being sought after by investors in May 2021 a global poll of over 40 institutional investors ranked climate change as the top issue most likely to prompt engagement with an underlying asset and also thanks to like the rise of sensors everywhere what we call the internet of things and advanced computational toolkits we really can start to collect data and analyze it in ways like never before and with these new analytics the idea would be we can shift how the investors understand their exposures to the built environment and in turn that can change the real estate while changing finance again that virtuous cycle the challenge here is to date the ESG reporting landscape has been helpful but not entirely useful environmental factors tend to include proxies for climate related risks that are kind of pulling policy statements or carbon emissions doesn't really get to the point of translating a climate risk into something an investor understands in dollars and cents terms what is missing is how material these risks can be for specific assets facilities and portfolios and ultimately that is the work that we are doing at Stanford how do we translate these intergenerational risks this long-term focus on the built environment into something an investor could quite literally drop into a discounted cash flow analysis the good news is there's all kinds of models in the insurance industry that can give us guide guides on how to do this the work of Alex Gelber he's at UCSD on a methodology for translating climate risks into damage projections is incredibly valuable he Gelber shows that catastrophe models are the foundation from which we can build climate risk pricing for property insurance premiums and ultimately this is about translating climate change risks into financial risks and he has a two-part model for doing this and you need to combine them both and I'll talk about it for just a minute you start with a hazard module that set specifies the frequency and severity of climate perils such as hurricanes wildfires that hazard module is linked to the climate scenarios into the future you can downscale it tie it to local addresses the next component is a vulnerability module that estimates how the magnitude of a physical hazard will translate into monetary value of financial damages you can think of this as an example of say how a hurricane would create damage losses related to wind speed and this is the type of data that insurance companies have today whereby we can see claims data showing exactly the vulnerabilities of locations to these different environmental factors again all of this data the hazard modules and the vulnerability modules can be developed the data exists and the tools exist it's the work to connect the hazard to the vulnerability that is the next state phase for us in developing correct pricing of these risks by combining these two sets of information again the probability of climate events and the impacts of climate events on financial outcomes we can help investors assess how climate will impact financial outcomes for assets facilities portfolios both now and in the future for any location on earth literally an address we can understand the building we can understand the vulnerabilities and we can understand will an asset be insurable will your home in Napa Valley be insurable for fire we can begin to inform you on that and help you begin to make changes to your portfolio what this means I would argue is that empowering institutions with this decision useful climate risk analytics yes it will help improve capital allocation it will also increase the incentives to launch mitigation and adaptation measures there again the financial markets creating the cost internalizing the externality today creating the cost and benefit of investing in resilience that's the goal that's a lot of stuff in 10 minutes let me begin pulling some of these threads together for you so I can start to leave you with some kind of core thoughts so the book reminded us how the profit motive investors the profit motive of investors capital market participants was important to the provision of shelter 500 years ago and similar to them the profit motive will be critical to the provision of shelter from the worst effects of climate change today and tomorrow investors saw shelter at the time as an opportunity for profit it was an objective to attract their capital into this asset class to generate returns it was partly why they avoided the construction risk and the development risk and wanted it after that as patrice talked about in her book similarly to now we can't expect investors to see climate change or resilience in a different manner it can't be and it is not their sole objective it is not their job to solve climate change the plan sponsors have set these organizations up to generate high risk adjusted returns to pay pensions or fund universities or bolster healthcare promises as much as it pains some of us they don't exist to solve climate change and yet they have the long-term horizon they have if you sum up some of the data recently about 150 trillion dollars that's a big amount of capital if we can show them that these risks are material and translate climate into dollars and cents we can begin to do what occurred 500 years ago as investors participated in the development of shelter and so that is the ultimate challenge here how do we illustrate how climate affects their portfolios and I'm convinced even more if I was already convinced I'm more convinced now that real estate is that central lens to do it patrice demonstrates the huge importance of real estate then as now for people for government and for investors and the role of the private sector in building and solving really critical problems it's also important to note the community of long-term investors truly relies on real estate to meet their investment objectives this is perhaps the biggest allocation outside of fixed income and public equities real estate is where they turn next to get diversified return streams so long-term investors are not fully integrating that risk into their decisions just yet but based on the model I think we can push them to do so to be clear this would not be financial innovation to hide risk okay this is what occurred in the subprime mortgage industry prior to the financial crisis of 2008 that was about smoothing away vulnerabilities through widespread diversification if you didn't have the data and analytics that would be the least bad strategy let's diversify with spread and let's allow investors to deploy but with today's technology we can do better the goal should not be to diversify way this risk it should be to reveal to investors the actual downside in their portfolios stemming from climate change we want granular bottom-up understanding we should not be satisfied with a top-down approach to managing this risk at the local level and so ultimately to do this we need to shift their focus to the vulnerabilities translate their hazards into dollars and cents terms and if we do that and we use similar if you read this stuff about valuation in patrice's book it's going to be similar that process of forming valuation toolkits and just the last statement the correct pricing of risk will change where capital goes thereby changing the incentives in our economy and the economy itself real estate developers can shape the future of finance which in turn can transform the entire built environment and I've tried to communicate 10 years of research in about 15 minutes so I probably left some things out I'll read it back to you guys no it was very succinct and and Ashby just you know you are taking on that exploration of you know how do we just change the thinking yeah about this how do we change we know the impact is there you know and we have one of Rachel Weber has spoken for decades you know a couple of decades about impact of capital of poor capital decisions on our built environment in terms of urban impacts and you're now saying well similarly with respect to climate you know so it takes a lot to tease out all of these pieces that make up that that clarity of understanding so you know all kudos to you it's it's fabulous and you're absolutely right you know it's I can see it having the same sort of intricate balancing of in financial impact as we go along plus that end piece that is off into the future you know where we speculate about what the world will be into the future and hopefully support speculation in a good sense of how we can invest in a better future so thank you thank you yeah yeah I think one of the points you mentioned you can't regulate in the impact and and I think similar in this world of long-term investing we can't force them to do you know to truly consider this stuff we need to reveal to them that it's in their interest and I think in thinking about your model and and how you managed to pull together that those could those different interests governments markets and developers and and the fact that like some of the people that are investing aren't using the asset that they're investing in whole set of different stakeholders very similar to the world of long-term investing and managing all these different pulling constraints yeah I was struck by young the use of property is a kind of a lens through which investors understand actually aspects of the downside if you like or the risk management part of climate change you might have and I'm sure you've got lots of experience on this you might have talked also about the opportunity represented by climate change particularly in technology production technologies but also in in sort of distribution technologies so what should take on that yeah it is a huge opportunity and I think in order to spot it part of the part of it is like understanding this risk is there to your portfolios and then taking using your fiduciary duty to manage that risk means managing the downside but also leveraging the upside and the upside are the solutions the new resilient buildings that people are going to end up moving to you know this is a two-sided coin one is let's avoid the you know the damage to the portfolio that we need to control to but also let's reposition for the upside who's who's going to pay for the investments abandoned or rather these investments discounted and dropping out of a portfolio to somebody else who's going to pay if you like for the rebalancing of portfolios so the people who haven't correctly assessed and understood these long-term risks will be left holding the back and so this is this is like why when I say to these organizations like look you need to integrate your ESG into your risk management this is what we call portfolio resilience you need to be building a long-term portfolio that correctly spots the threats to you achieving your goals holding a piece of real estate on the coast and New Orleans is probably not a risk return bet that you want to make and and so as we begin to see those properties sold and other properties purchased we're starting to put a price on this risk through that market lens sadly today the mortgage market in the US doesn't price doesn't use location as a determinant of price of mortgage so your mortgage in Ohio will have the same price as it does on the coast in Florida now that means all the other individual specific factors are being taken into consideration but not the location factors when that seems like it's a complete mispricing to me so so why do you think the finance industry has been particularly open to this conversation where other industries heads in the sand and otherwise but what's what's special about the industry that gives you if you're like an audience well the I think part of it stems from the long horizon investors I think if you go talk to the the shorter term fund managers it's simply trying to respond to the pension funds so let's differentiate the fund managers or the external asset managers that often do the investing the pension funds are the asset owners that have the intergenerational time horizon the fund managers are responding to regulators and the desires of the asset owners to consider these things they don't yet truly integrate this risk it is sadly and this is where like why we need dollars and cents pricing of this through a vulnerability model we they just don't see it as important for their investment strategy the pension funds have stakeholders that really care about this stuff you know like Harvard University divesting from fossil fuels the students care right and so the the long-term investors are going to drag the managers and the property developers who are kind of sitting there building these things ultimately are going to respond to the managers and so it's that kind of I mean I hate to say trickle down set of incentives but it almost is like if we can't get the big pensions to truly price this stuff and care about it then we're going to have to rely on government on that far side to put a price on it through regulation and maybe we need both but I'm not willing to wait for the government to put the price on it let's instead make sure the pension funds are pricing it themselves and then if we get two levers pulled great but at the very least we need that one lever pulled with the pricing of climate risk the tree sinney last comments because I can see Jerry there but Jerry's going to speak anyway so all right Jerry has to hang off okay all right uh richard um you're fine richard uh richard florida you're all good no I think it was terrific it was terrific nothing to add it was just terrific well thank you absolutely terrific Ashby and you know we we we'll prod each other along with how to better hone this understanding so really thrilled thank you thank you for having me very much thank you Ashby it was terrific okay now Jerry where's Jerry I'm right here can you see me yes I can see you it's um and you've been very patient and um but uh you get to um speakers as you know for up to 20 22 minutes take a few questions and and the and the floor is yours thank you and uh so let me make uh the comment that I wanted to make on uh Ashby's and I really appreciated uh Ashby's remarks and it's a nice segue to what I'd like to talk about but the comment that I wanted to make was um you know when we're talking about risk and climate change uh government disaster policy uh takes away that risk and that's kind of one of the reasons why we don't see as much of a shift as as we might so if you're a property owner I think Ashby you pointed out the risk of wildfires in Napa Valley uh but if you are in Napa Valley you get subsidized uh insurance through Cal Fire and you get FEMA as well and so the risk is mitigated and if you're a corporate owner you can always sell the individuals that changes you know the the risk return and keeps developers from taking climate change seriously because that residual value is really protected in that way so I think that's a real problem at least in the United States the disaster policy is doing you think Kerry um there will come a storm too big there will come a string of storms too big you know one day government won't be able to do what they've done say on on the Gulf of Mexico so do you think there's a limit I mean you would think so but when people have their homes destroyed and they're sitting out there looking at their lives uh disrupted in that way there is a tendency to say we have to help them okay I mean there is a movement to try and move you know by land and move people off away from but but it's fairly small and it's it would be expensive to do so I think it's going to be a long time coming and it won't be in response to a hurricane or wildfire but rather a more thoughtful policy which sort of turns me to my remarks so I'm a macroeconomist interested in regional economies and transportation economics but also interested in policy and policy particularly as it affects things like residential construction that gives you the trajectory or the forecast of what's going to happen in any particular economy and that's why I really appreciated Patrice's book so I'd like to begin my remarks with some reflection on the discussion about housing in the urban environment here in my home state of California and it may be sunny in the Bay Area but it is cloudy and for us it's cold here in Southern California housing is clearly expensive here and particularly in the coastal cities where most residents live and this is what's called an affordability crisis and we have vociferous discussions but they're really not discussions because people are talking past each other than with each other so between nimbies and yimbies and politicians and journalists etc and importantly the why of the situation seems to be relegated to bad policy on the part of homeowners and their elected representatives you know in counter d'orities but Golden Gates he points that out and basically says if we were only like Austin Phoenix in Seattle we wouldn't have this problem and I think it was it was maybe Rachel who mentioned that recent New York Times cover where Austin is facing this you know the same problem that that we see here in California and so that leads me to what I see is really an important contribution of Patrice's historical study of property values and urban development in London and we learn a lot from that and it should be instructive for policy today and Patrice describes a trend towards increasing outsourcing of growth of cities to the private sector in the context of this long span of of history with different economic and social and political conditions but you know it's clear to me in reading it that the incentives and the tensions that she described are very similar to the ones that we see today that that things haven't changed much if at all and so this analysis really provides a historical context to evaluate you know not just the evolution of the urban landscape how we got here today but also the current move to make high cost of living cities such as those here in California more affordable and I think the way to think about this is that the public sector is optimizing the social utility functions somehow defined by the political process and so this has got a lot of arguments in it of what is in the social good the private sector you know as was just succinctly pointed out is focusing on creating a satisfactory return for investors and these two objectives are clearly in conflict and so to highlight that I'd like to be in the balance of my remarks take on one aspect of the urban environment that's at the heart of this just the discussion of the densification of cities in the United States that are the provision of open space and we've heard quite a bit about this from Sam Richard Manuel and others and and just going going back to the history that Patrice outlined early London you had a lot of open space and you know part of that was for the commercial use for markets you needed space for markets and the 16th century enclosures you had this real conflict between those who were using the open space and those who were enclosing them and people were forced off the land and what that privatization resulted in was migration to the cities and we heard in earlier remarks about how demand was driving farmers landowners on the periphery to monetize their land by building homes and selling them and that was really part of what was going on and because of this migration you had a lot of pressure on the government to do this outsourcing that's described in built up to the private sector to build houses you know what we hear today build baby build get more supply because people need shelter and so things like open space were subsumed to having as rapid a growth in shelter as possible and today in high cost of living cities such as Los Angeles and San Francisco there's some real sense in which the same thing is going on as was described in London after the enclosures and later you know what the attitude that we hear here and you hear it in New York and other high cost of living cities but now you're hearing it in places like Austin is it's all about supply and there isn't a discussion about the externalities and open space externalities and so you know one of the things that happened in London that that Patrice describes is the set in mid 17th century the plague in the great fire really provided an opportunity for a reset and it's not that dissimilar to the opportunity for a reset that we see today in a post COVID world where one can work more remotely and we can redesign our cities around that but we had you know we have to keep in mind that that there is this tension between the private sector and the public sector now in the rebuilding after the great fire we saw things like Covenant Gardens and Queens Road those have been described earlier but they're really for wealthier Londoners and you see that as well in the United States where you can where developers are able to privatize open space and sell their homes at a higher price because they can privatize that space but it's not really for the general public and when we think about this you know for the for an individual open spaces monetized through the value of the land that they live on land closer to open spaces commands a premium over parcels further away and that's just a you know rent gradient that we see in every city and that was my earlier comment about Los Angeles has a lot of open space and it's priced into the price of land and if it's priced into the price of land a developer can't capture that because they have to pay for that in their purchase of the land so there's little developer can do in in in that sense and you know it's also really difficult to capture the externality by the private sector that is the widespread enjoyment the social cohesion and a sense of well-being of the population at large that it gains from open space so you know when I go to the beach for example I enjoy being at the beach and I would be willing to pay for that enjoyment but I don't really recognize that the other folks at the beach are also enjoying it and that is creating a social good there's an externality there and so I'm not really willing to pay for it because I don't recognize that benefit to myself and you know so you know as I was reading through the history of London I was thinking how generalizable is this it's seen clear that the privatization of development resulted in a suboptimal amount of open space in London but that might be idiosyncratic as other cities have different characteristics the availability of open space the presence of mountains bodies of water climate allowed or climatological conditions and the sorting of land between residential and commercial use are just but a few so is London and kind of the other examples in built up unique or is it generalizable and what can we learn about that so in that regard I wanted to look at the United States and started with the following working hypothesis that for cities where developers could incorporate open space so these would be cities with a large amount of flat land and and they could build their housing around some central space making it more costly for those outside of the development to use that open space could they then capture the value of that open space to the renter or buyer and that therefore the private sector would have an incentive to provide if not the optimal amount of open space at least near there and and then for cities that would be you know where we have densification it's really hard to to to achieve that because if you put open space there anyone can use it you have a lot of people in buildings that are close to that and so it is much more difficult to capture the value of the open space to the folks who are living in in those developments so there should be you know a real difference between cities such as as Dallas and Los Angeles and New York in the amount of open space is being provided by private developers and just as kind of a digression you know we know of places like Newhall Ranch that's in Santa Clarita California where they specifically advertise you know come by your home here because we have hiking trails and and we have bicycle trails and lots of open space and so in order to look at that what I did was put together some data on MSAs in the US so these are metropolitan areas and looked at some preliminary regressions and so this is not an extensive study but just really a data exploration exercise and in in that so I was looking at at the landform and the US Department of Agriculture has an index on that and comparing it to two measures one is called park score which is the amount of open space in in a city and the other is an estimate of the amount of loss of open space by development on the periphery by city and so that is from the National Wildlife Federation and you would expect you know what I just just said that cities such as Dallas where you have plenty of room to expand in Houston and the like that you would see more open space and cities that are more constrained you'd see less but that wasn't the case there was actually no correlation between between the two and and you know looking at different ways of analyzing this data you simply can't come up with any support for the theory that the private sector is providing optimal open space that is very similar to the case of London and that what in in Patrice's really amazing study of the history of development of real estate in London you know points out there is generalizable that you get suboptimal open space and as a consequence of that you know one has to think about development and in the context of making cities more affordable the public sector has a much greater role than even though the public sector may be limited in in its in its finances it has a much greater role in providing for open space in creating the kinds of cities that urban planners and urbanologists and I think we all know are going to be much better places to live and to increase the overall utility of the residents of the city but you know there are some experiences that I think we need to look at and have some real skepticism about the way in which that's achieved and so one place to look is Christine Miller's description of what happened with the POPS program in New York her book is designs on the public and the POPS system so I think that's POPS stands for privately owned public spaces and so this was an incentive that changed zoning so that developers who wanted to build higher developers who wanted to increase the value of their development could do so if they provided these privately owned public spaces and and many did that but what you found over time was the incentive for the owners of the buildings particularly when the buildings were sold to a different owner and so they didn't have the same energy and preserving that open space the incentives were to privatize that open space and and you know for example if you had some open space that you would walk through in order to get into the building by doing various things so that homeless people wouldn't come and sit in that space and so that folks who are entering the building would have a better experience that would allow you to charge higher rents and so this resulted in these open spaces not being quite so open so I think there's a real object lesson there that that the public sector has a much greater role than it has played in the past if we are going to provide the optimal amount of public goods and I'm only talking about open space there are other public goods associated with the urban environment and I think that you know as as I read through built up I see it in sort of many other dimensions but it is illustrative that to create the optimal urban environment for the city's residents one needs exactly what patrice was advocating in the last chapter of built up a new model a model that emphasizes the role of public goods in creating a quality urban environment and so with that let me stop my remarks. Jerry thank you very very much you don't need to stop it was we were really very engrossed you know there's it's it's extremely hard to see and you've you've presented that in your study there that you know case study is extremely hard to see how economic benefits of open space can be identified justified utilized and so on and you know but once again you're also you know pounding the table on the fact that we we need it for a variety of things in terms of our human condition particularly within cities so thank you very much for that Richard you got great stuff Jerry and thanks for being part of this you know it's really interesting because I remember when I met Jane Jacobs she had one of my papers marked up by hand next to her rotary phone and she said outliers really matter I remember her just focused on outliers and and I guess I keep thinking I totally agree with your empirical results and I I find them fascinating but then I see like what happens with the Highline Park right and you know I know the founders of the Highline Park and they're very well-intentioned people concerned with inclusive development there they never you know they wanted to build a park which celebrated in their view the gay male heritage of that neighborhood and real estate investors and developers took great advantage of that I mean they saw the park coming they saw the open space there and they knew maybe they didn't know quite to the extent they would gain from the availability to an open space but they knew and and I guess this is the question and and now the Highline folks have set up not only their own organization but a national organization to help open space folks not kind of figure out ways to gain some of the potentially gain some of the financial upside that developers gain so I guess that's the question I'm asking you when when we build these urban parks and public goods why do we allow developers to capture all the benefit and are there mechanisms for enabling some of that benefit community development to be plowed back into the neighborhood or into other parts of the community right so I mean the the Highline maybe the exception that proves the rule and and exactly you know because one of the things that was surprising I expected San Francisco and that's the metropolitan area it's not just the city and county of San Francisco but San Francisco to be very different from Dallas in in this respect and it's not it's not that's and and so that was a surprising result is there a way for the the city to capture these benefits I think the answer is yes but you have to start off with here's the amount of open space that we want to create the quality of life that we want for our citizens you developers are welcome to go ahead and build but we are going to tax your building so that we have the funds to develop this open space that if you do the opposite like in the pops program then that space is privately owned yep and over time it's going to be privatized I mean one of the one of the issues there is you know with the pops program and other similar programs is enforcement yep it's all well and good but those open spaces require maintenance and and they require care and feeding and once they're there the city will ignore them because they're private so I one more one more follow-up one of the things we see in the current post-covid or emerging post-covid environment is it open spaces in cities which seem to have had a glory day we want to build more of them we want to figure out public private partnerships to do that they're part of quality of life they're part of attracting talent there is a beginnings of a reversal you see it in New York with regard to Washington Square Park and other parks which are now thought to be you know bastions of attracting a all night party crowd and disrupted to the neighborhood you see it on Miami Beach on Ocean Drive where the mayor just allowed cars back on Ocean Drive because he was concerned about disruption you probably see it in parts of Los Angeles I'm guessing like Venice Beach you hear the you hear the tall tales at least out here on the East Coast I wonder if you see any of that that there is a reversal in the regards of cities about about open space which used to be seen as a talent attractor now being a kind of a void that's being filled by you know what I'm saying less in their words not my words less desirable elements nighttime activity urban disorder that is less desirable do you see any of that or sense any of that uh you know there there definitely is and and particularly with respect to homeless encampments yep you referred to Venice Beach and yep um and and there's a fairly sharp backlash against that but to me what that says is we are way below optimal open space right because we're not we're not providing enough open space for teenagers to gather for for seniors to gather and so on and so everyone is crowded into Washington Square or Golden Gate Park or or Venice Beach and and so it's not that there's a problem with having open spaces there's a problem with not having not enough open spaces one thing yes Richard you know who did reference and and Derry spoke you know mentioned this and it's not just the ownership of the public space that's one thing you know that can be uh if if it is owned and given to a municipality a municipality often says no no no we can't afford to manage it we can't afford to operate it and and and that's why I say that the very one of the key things about Covent Garden was that not only did Bedford provide this open space but also dedicated the rent revenues from three of the houses to support the open space and the church and the church was made responsible for the administration and maintenance for that public space so there was a distinct understanding that it's you know real estate once again has no value or is no good to anyone if it's not able to be utilized in the you know in the desired manner and that is as a place a safe place an inclusive place uh you know and so on and an example in recent times here in New York was Domino Park the Domino Sugar Factory was developed by two trees they gave a they they took a waterfront portion of their uh of their land and has made it a public park not only did did they make it totally open to the public you would never think it was private land which it remains but they also spend 0.9 million dollars on operating and you know managing and maintaining this park every year the fact that they can weave that in to their economic evaluation of their development project and its long term economic viability and so on I think provides hope that there is there is something important happening there but we do have to we can't just talk about the space without talking about its operation maintenance and as you say through the P O P S the P O P S were coming in with the operational budget on top of the publicly owned land which once again is a necessary combination yeah I think that's exactly right and here in California we have a non-profit organization that um that takes the so the state and and the cities will give open space land to this organization and its only purpose is maintaining the properties and it has a source of revenue from the state and so that takes it out of kind of the each municipalities budget fight every year and you know that it has a dedicated mission but I think we have to you know we have to think through these these things in order to make sure that they're not unintended consequences okay um might I just interject a little bit of comparative economics um so I've lived in um Cambridge, Massachusetts, South Shore, Chicago, Pittsburgh, wonderful places historical places history um full of parks at least parks in the inner city areas or in the city sounds a little bit not quite right but certainly um within the beltway networks that surround the cities and um so history matters a lot actually for American cities in terms of provision of open space and they matter a hell of a lot for the UK because again you know look at central London you know it's full of parks but the parks weren't made in the 19th century parks were there and have been kept and some of the parks of course owned by the crown of the state um the question is why and and the UK has kept a heritage of parks although more or less good depending on the new development isn't that in the US that the issue is confounded by the fact that you're building housing for relatively lower income to higher income that's the mass housing building market and there is an issue of disposable income which is the justification for not providing parks because you're sort of filling up the available space with a house or houses and a park would be in a sense an added cost to the sale price of the existing homes is it that it's an income problem that American cities ex-urban cities other cities they are in or is it an unwillingness to tax property developers and what would then be the basis for unwillingness to tax property developers you've got all of 30 seconds to answer okay so I think it is both property developers are politically very powerful and they don't want to be taxed and the argument that they make is if you tax us we will have to raise the price and we're trying to provide housing for middle income Americans and we're going to have to build luxury housing right okay so so then you agree with me it's actually partly of the explanation is the income of the purchaser that makes all the difference thank you very much Jerry also also Gordon if I could add one thing that I point out in the book you know Jerry said real estate developers are very powerful and they work hard to maintain that power particularly with respect to municipalities the question is why did they become that way right you know they just didn't get up and say well I'm going to throw all my money at you know local politicians but what I you know I described in the book is you know how immediately they realized this connection to local politics was critical for their success and it didn't begin in the UK you know property developers are very influential in the conservative government throughout the world in China in China yeah okay enough enough Jerry really interesting we're talking too much thanks for contributing thank you written and also your presentation very helpful okay Richard G Richard Green we're just full of Richards today aren't we is there too many I noticed past speakers have I prepared slides is that all right that's all right okay I wanted to prove to you even though I'm an economist I'm not necessarily a Philistine although you may you may decide that I'm Philistine at the end of no no no we started with an economist who claimed not to be a Philistine so you know Richard yeah I know who that economist was it was and forgive me I did not get up at five in the morning to listen to him and and so you'll be able to watch the rerun yeah yeah yeah so well again thank you very much thank you very much for having me I'm not sure why I was invited here I don't know that I'm particularly competent to comment on this book but I'll try my best anyway and it will be from the perspective of an economist and it will be from the perspective of someone who thinks there are tools and economics that can be very helpful to achieving some of the aims that are described in the book that are not used as well as they should and to some extent the the conversations uh from Professor Weber and from my friend Jerry uh pointed in that direction I think um I will say this first of all Patrice thank you very much for sending me an actual copy of the book um because I I really wasn't expecting you to buy me one I just figured Columbia has money and they could send me one uh but it is it's a beautiful book and I'm not saying that in the sense of oh I got to find something nice to say so I'll say it's beautiful it really is aesthetically a very wonderful thing to read through and uh because of that inspired me in this presentation to share pictures instead of I don't think I have an equation I have a couple of graphs but I don't have any I have quite a lot of pictures and I'm going to divide my comments sort of into three I want to talk a little bit about London I don't know anyone who doesn't like London uh I want but but that's also kind of a problem with making it as an example is it really is uh I mean Richard F talked about Jane Jacobs and you've got to pay attention to the outlier as well if any city in the world is an outlier in many many dimensions it is London I want to talk a little bit about what I think is really important in here from a real estate teaching perspective real estate education perspective and then I want to talk a little bit about some economic policies and I am going to and I'm going to focus a lot on the last chapter of the book which is about criticisms of the development process and I'm going to say something that's going to get me into trouble with the place I used to teach uh which is the I taught at the University of Wisconsin Madison for many years and while Jim grass camp was inspiring in many ways admirable person I think he actually was part of a tradition that in many ways led to some pretty bad outcomes I'm going to talk a little bit about that all right so I can't help you know thinking about London is fun but I just couple of quotes from couple of my favorite pieces about London from Pip and great expectations after this escape I was content to take a foggy view of the end through the windows and cresting dirt into standoffly looking out saying to myself that London was decidedly overrated so and and of course Dickens his love of London comes through his novels but he had a very also keen eye about its limitations and its problems and it's what made Dickens such a magnificent rider is is he could describe vividly the complexity that was London edit it during his time so well and then from my all-time favorite musical Sweeney Todd this is the more a PG rated quote about it there's a whole the world like a great black pit and the vermin of the world inhabited and the morals aren't worth what a pig could spit and it goes by the name of London so that was sort of London reflected in the mid 19th century right but whatever the development process has been since then however good or bad in a sense one could say it is London has done pretty darn well so I on the left is and I'm sure everybody in the room knows this this is my favorite part of London is on the left is Bloomsbury and maybe the reason for that is I'm an enormous fan of John Manard Keynes and actually this picture doesn't do Bloomsbury justice because the sky is blue in this picture and I actually think Bloomsbury is at its best when you have a misty rain a little bit of fog of the street shimmer it's a really beautiful place and of course on the right is Covent Garden which one of the things is so interesting is it's been repurposed many times since its original development with different uses inside of it and yet it continues to be you know there are periods when it's been better there have been periods when it's been worse but a central gathering place in London that works pretty well and the other thing about London and I to me this is the most important indicator of how good a place is to live if I could use only one statistic it is life expectancy and if you look at life expectancy in London from the late 18th century through what I will call the point where the industrial revolution really got going the metropolitan line opened in 1850 which basically transformed how London could develop as a city that was a little before things started to take off but by 1875 boy we start to see that really strong upward trend in life expectancy world war one and the Spanish flu of course interrupting that trend and now COVID and drug dependency are creating a I mean not that sharp downward phenomenon we suffer from world war two but but really problematic but nevertheless I think we need to appreciate how much better things are now in a very important way you know we think every year of life has some value to it from 150 years to 170 years ago so okay two of the problems that you know developers to London faced that patrice brings out in her book that are remain difficult for us to come to grips with our first the problem of land use succession and this is one of the places in the world that actually allows it to happen this is the HSBC headquarters on the left before the foster HSBC headquarters succeeded at same location look at that building on the left that looks like a pretty much a fortress building that's never going to get torn down but given the density levels in Hong Kong it didn't make sense economically for that building to remain in that place and so it was torn down and the problem is if I'd scaled this right if I had the pictures reflect the size of the building the one on the left would be I don't know about a fifth the size that it is compared to the one on the right the one on the left is not even 20 stories tall the one on the right is well over a thousand feet tall people sometimes economic pressures really do tell you that give you the right answer which it is time to do something different with this property and convincing others and developers had a hard time in Patrice's book convincing lenders investors etc that it was time to transform farmland agrarian land on the edge of London into urban land is a problem that remains people want things to remain as they were even if what was it's not very productive anymore and something I find remarkable about Hong Kong is it still has land zone for industrial use the government is hanging on to the idea that maybe manufacturing can come back to Hong Kong someday it's not going to happen it's too expensive to do it there and so using that sort of romantic view of the past as a way to prevent the development of and I'm going to come back to this phrase highest and best use I think is is misplaced and was so 300 years ago the other thing the thing I really liked in the book and and is absolutely relevant today is relying on this kind of cash flow as a mechanism for determining use and I've become a person who in general prefers just income capitalization to determining what to do right now because at least then there's lots and lots of market signals forecasting for you whereas when you use a DCF model you're making forecasts about values in 10 years and about discount rates in 10 years things that you can't possibly know about and on the left I have the history of 10 year I'm sorry the left I have the history of commercial property values in the United States going back to the 1950s as you could see it's quite volatile and on the right is the 10 year treasury maturity just going back nine years and you could see it's also quite volatile and one of the things about real estate is it has lots of what we call duration and finance and the thing about duration is it means its value will be very sensitive to changes in interest rates but you could see in just the past four years we have a 200 basis point swings in interest rates that long term interest rates that's actually a pretty modest swing by historical standards but basically that means if you're looking at a 10 year horizon you get a 20 swing in value based on that two percentage point change in interest rates so the problem with DCF I think is it lends a patina of scientific respectability to what people are doing where there is nothing scientific about it because we don't know the parameters we don't know the appropriate parameters going forward and we should be modest enough to accept just sort of what the market is telling us at the moment when we're looking at cap rates we can argue they're too low or they're too high a little bit here and there but in general that makes more sense the only place for DCF in my view is if you are acquiring a building you have a bunch of leases expiring during the time that you plan on holding it of course you need to think about that from a risk management standpoint you want to identify that but yeah I think uh let's do a static analysis less dynamic analysis when we're making these decisions all right I want to move on to and I can see I'm running out of time already um you know imperfections of the development process well you know I've heard Ricardo already mentioned I don't know if Henry George has been mentioned yet by a previous speaker I look through the book for Henry George I think Henry George certainly didn't get everything right but he had very useful things to say about this problem of the the monopolist owning land but there are some correctives to that from economics on the left you have um uh Frank Plumpton Ramsey who is one of the great economists of uh the early part of the last century he died at age 28 being as one of the most productive economists of his time and he had this idea called the Ramsey tax which is it taxing inelastic things is an efficient thing to do and land is by its very nature particularly well located land is inelastically supplied and as a consequence let's go after that um and Henry George said let's do that with the Henry George tax which is about you apply taxes to property to land but not to improvements now I think that's naive because I don't know exactly how you measure one and the other always but nevertheless I think the principle is the correct one and on the right was William Alonzo who wrote um the competitive theory of the land market which pointed out that if you don't allow people to have concessions in lots and lots and lots of applications not all of them you actually do get quite a lot of competition in property markets and so you don't have these regarding rents as a result of that and very often what I see through the regulatory process is effectively the creation of concessions that lead to the possibility of these monopoly positions in the property market beyond Ramsey tax is something I love is value capture and this is not a sort of theoretical construct there's a place in the world that where it's done really well which is Hong Kong and basically what they do is they put property out to bid in auctions there's a reservation price so that if the highest auction value bid is not sufficient to deal with the infrastructure necessary to support Hong Kong and by the way that infrastructure includes subsidy for housing for lower income residents of Hong Kong but it's also this is the MRT one of the most magnificent transit systems in the world don't give property away and in the context of an American city don't give entitlements away so here in LA we are under zone we need to be zoned more densely but instead of just deciding this developer gets more density but that developer doesn't auction off development rights auction off air rights and use that as a mechanism for returning that property value increase that happens from the development rights and put it into things like housing subsidies transit parks etc i think this is a much more sensible thing to do than community benefits my problem with community benefits is i see the money gets given to people and i don't know actually what happens to the money i don't know how the community benefits from it but you put it in metro line or you put it in BRT or you give people vouchers for housing then i think you have something that is tangible and useful to the people who are surrounded by um or nearby to the property that is developed uh okay pollution obviously there are a lot of externalities involved and again it's so i like pagoo let's let um let's tax externalities again i think we know how to do it i'm a big fan of carbon taxes why we're not spending 80 bucks a pound on carbon emission is something i don't know uh but we're not but but that would certainly change the shape of cities and and go a long way toward making the more environmentally sustainable and that said of course in general cities you know to the extent you keep people from living in cities you're worsening the planet right to the extent you're restricting the ability of people to move into cities you are not living lightly on the earth you're making the earth worse off and one of the ironies is when cities become regulated you have more greenfield development which is environmentally work and on on the right and when you have um arguments over how to use property this is one of my favorite pictures this is crocker's spike fence to uh he couldn't acquire a neighbor's property and so he decided to basically put a fence around it that kept it from getting any sunlight you can't allow that sort of externality to happen all right um i'm going very fast i just want to start with how planning is part of the problem and jane jacob's and ellen burto wrote a wonderful book called order without design about the development of cities as organic instruments and i highly recommend it but i want to finish because i'm running i'm out of time already but um in her book patrice talks a lot about rethinking the highest and best use and she refers to james grass camp who talks about most probable and fitting use and here's where i have a problem with that is it leads people to claim that things are externalities when they're not externalities at all and if we go back to this wisconsin tradition of urban led economics it's one rooted in richard e lee and john r commons who were among other things eugenicists and led to a movement that proclaimed that you wanted to keep people of certain races and ethnicities out of certain neighborhoods within cities this was followed up by homer hoit um with his um dissertation at the university of chicago 100 years of land in chicago 100 years land values of chicago and who we wrote the fha manual that specifically maintain the places that permitted african americans um mexicans and my favorite category because i would have pit fit russian jews of the lower class from living in particular cities um because they were not considered fitting people and and grass camp didn't do this himself at all and i wouldn't want to imply that he did but he came out of a tradition that countenance the idea you had to basically manage the kind of people who were living cheap by jowl with each other and that's really problematic and people use the externality argument as an argument of exclusion it's why i was thrilled when minneapolis got rid of a single family zoning making the argument that zoning had been used as an instrument of exclusion for many years until i want to finish with just a little trivia question which is i wonder if anyone knows the large american city with a substantial african american population that is the most racially integrated is measured by the similarity index and i don't know if anyone wants to guess i i guess i could just say and the answer is dallas texas okay the most the least segregated city in america large city is actually san francisco but basically it's lost all of its african-american residents it's five percent african so i don't think it really counts dallas is about 20 african-american if you look at this dissimilarity index it does far better than cities that purport themselves to be much more progressive and dallas is a city in which it is pretty easy to build and i think there's something to be learned from that and i have gone on too long thank you for allowing me to speak today not at all richard no not not too long at all but thank you very very much for that i truly truly appreciate you know the uh the macroeconomics and these these aspects are central to what real estate uh is about can do and is able to utilize in its role within urban areas and society and so on and so i very much appreciate your you're coming in strongly and and talking about you know let's not get too fuzzy on you know what is really driving these things here um and you know and you're absolutely right raising the notion of you know are there are there things which we falsely categorize as externalities which in the end aren't they're part of what we actually do they're not external uh and uh and you know we so where's our responsibility for them um i think that you know we could look we we unfortunately we don't have james grasp camp around with us these days but uh you know we could we could certainly spend some good time you know talking through how we saw things and he was of an era you're right he was of that coming out of that 60s 70s 80s era where the notion of urban planners defining how cities should be and who should be there and how they should be you know was was definitely still a force uh of uh of the urban uh evolution um i think he you know one thing he was trying to say when he said you know probable and fitting was um yes the planners uh would have their say but he also did concede that it wasn't just an economic a purely economic decision but you did have political salience you did have community issues community concerns and so on coming into way on these things and whether they would impact it so um but thank you very very much for that it's you know it i love the way it goes back and forth between social concerns macro economic issues and so on and i will send you larry's little snippet so you can see how you're providing a wonderful bookend to his launch this morning but thank you um richard well richard it's great to see always good to see richard it's been far too long it's been far far too long it's great to see you and i know you're in your in your actual office i know your office so that's particularly nice i i don't think i'm not in toronto but i don't think we're still we may be allowed back but it would be just the beginnings of us being allowed back um it's interesting some you you were not the only person to use slides someone this morning had a very wonderful slide deck um and i i i sent to you in the chat i mentioned henry george and i i would just like your reaction to the comment i made on patrice's wonderful book because i said she's done a great job of bringing real estate back back into urban theory and in a way her book reminds me of henry george and and i contrasted george and marx and i said that where marx denigrated real estate thought and he actually denigrated george there's correspondence of him denigrating george uh he saw the world is as pit the modern world his modern world the industrial world pit against capitalist and laborers and the capitalists made off with a surplus george not only in progress and poverty but in that wonderful pamphlet on whatever it was on land or something wherever yeah i think it was called on land yeah the empirical one he kind of says no no no no no no there are three classes there are capitalists and workers and there's these people called landlords and and indeed the last one is the one who runs off with the surplus produced by the former two and it kind of reminds me of today like like so much of the wealth that's being produced is sort of just finding its way back to land prices um and it's if they're surging all over the country you know i'm talking to you from miami beach where prices are up with austin we can go down the list you know i just wondered what you thought about this conceptually and also not just with regard to those two you have a great sense of economic history with regard to other contributions in economics and land economics how to how to think about that issue of who's making off with the surplus yeah so so i think a couple of things one is just the world is a wash of savings right now and it needs to it needs to show up somewhere yeah and i think that reflects the fact that we're aging as anyone with any society with money is aging and the places that are young don't have any money and old people are afraid of running out of money so they say so ironically you'd think hey i'm only going to live five years might as well party on but that's not how actually people behave is is is they save um and so they need or you know in any elastic repository is something that is a natural place for money to go but i do think the city elasticity is created in part by the political process and particularly by so i don't object to regulate land use regulation per se um what i object to is when it is bespoke and untransparent and political and let's talk about to play let's talk about los angeles where i am let's talk a little bit about london on that so here in la basically all new zoning is spot zoning which means everybody is competing for the politician and they're giving political contributions and so on and but if they get it if they get the entitlement they get an enormous windfall which leads them to have an enormous incentive to bribe city council people and it gives city council people an enormous incentive to accept bribes and again this is not hypothetical is we've had three of the 15 city council people in los angeles are died by the FBI over the course of the last two to three years and it always revolves around land dealing somehow uh so i think if you have a transparent process that allows for the change in use and that's why i like auctions and again this is not a hypothetical they do this in hong kong they do it in singapore it actually i think it works it gets the money also government more money than other mechanisms the other thing is i'm a big fan of property taxes and i look at texas and you know people here in california yell at me for saying nice things about texas but and there's stuff about texas i think is awful but they rely very heavily on pure ad valorem property taxes for raising money and i think that does a really good job of basically capturing most of those land rents maybe not all of them but but a good share of them in london i think one of the issues is and this stunned me but i learned that there was no zoning in london and that doesn't didn't mean that people could do whatever they want admit that people needed permission to do anything including like refan a string a building and so that gives enormous opportunities for mischief that gives enormous opportunity for monopoly uh and and so that's why the alonzo point about making the land market as competitive as possible is another important element of this you're very true and uh you know competition is also a way into having um to stopping exclusion and allow much more inclusionary entrance of people and so on so i'm gordon um yeah i'll look richard um richard green it was it was great to hear you give you a presentation not least to which to talk about bill alonzo so that was uh that was a blast from the past which and i was a faculty member with him and um i thought he was a really well an imaginary guy who who did excellent urban economics and there was a there was a funny year but some of the some of the brethren your your brethren sort of cast him a little bit as a sociologist to sort of running in guise but um no he's a very imaginative guy about land and land pricing and these types of things so that was that was excellent about london and actually the uk in general um if we wanted to put a shed at the bottom of our garden we would have to go to the city council in oxford and get permission and they would say yes you could do that but look this is what it has to look like oh by the way it can't have running water or a sewage um it can't actually it can be insulated but it can't in a sense be permanent you know so so it's and and this person will come around and actually look over your shoulder as it's being built and say oh no this doesn't really so there's that level of intrusion as you say it's not zoning but it is actually land use regulation against norms rather than standards that are sort of set out in concrete so to speak and it's a very interesting thing to watch and i get really irritated at times because we put a big skylight and we wanted a big glass canopy oh you can't do that you've got too much glass what how can you have too much glass in in in england but anyway these things are important but they also go to a really fundamental issue that is the relationship between the form that regulation takes and the choice of that form and then what you want to achieve for society and you and jerry are beating the drum properly so i think about not just what is the form of the city but its equity consequences and then if you sort of take that a little bit further green space a living organism of the city as opposed to something simply built around tarmac and lines on a road so i really value your presentation and and i think in lots of ways you've sort of captured patrice's sort of big agenda because patrice has written a book that's big it isn't bill alonso doing a sort of handbook on on heavy heavy that's heavy as well bills books were small you know yeah i know oh look don't it's valuable don't don't throw it around i was doing i was weightlifting with it no i'm i i i hope i can get a signed copy at some point no a doorstop weightlift many users enjoy no thank you richard great very very helpful and can i say it was a pleasure you know i'm just quickly on alonso it was fun to have to write something although i i'm i'm a little annoyed that i had to keep it to thousand words that were where i think almost all of i think alonso might be my most recent reference from 1961 or something yeah yeah 64 is the book i know there you go those were the days okay i think patrice is over to you oh thank you yeah thank you very much thank you no it's definitely not my turn i feel um i feel very indebted and um and as i say you know really humbled by this uh array of scholars and and the fascinating insights that uh the scholars have provided that they've sparked in terms of additional uh comments by other speakers uh questions from the floor uh and so on so one thing i just would like to do before i uh do some final comments is ask if there's anyone uh any of one of from our audience who would like to throw a question into the mix at this stage i'm pretty saying that you know many people are weary we're in between we're keeping people between their uh various uh after work activities on a friday evening but uh is there anybody who'd like to chime in uh richard green to kendra wants to say um welcome to kendra steve stenson stenson wonderful great to see you uh kendra stenson and uh you know to have richard green be able to speak to you over these you know across the years across the geographies uh as part of this so that just indicates uh how many folks we've heard come in from all uh all different perspectives and that's been the key um so perhaps uh if there's no more questions uh what i i i wanted to continue that and say you know that driving my exploration of this book was to understand all of the many details the nuances uh the contradictions the the frisson that is part of this process of how the built environment is envisioned and delivered for us in our cities globally now and as i said the utilization of the model has expanded from the that anglo-american beginnings uh you know to now being adopted through many parts of the world um i i thought so uh i i was interested but you know what made me think it was worthy of a book was how many other people how many people are just generally interested in real estate and whether it is uh speaking about their uh apartments between toronto and miami as per uh our richard florida and um and the changing pricing uh that occurs during our holding periods and so on uh to what it means for us status-wise uh it means in terms of economic security uh it means in terms of inclusion or exclusion from communities this is what occupies you know many many people and probably all of us in many ways so i thought you know to really explore how how this gets delivered was worthy because of that broad general popular interest um what today's symposium has done and and you know as i say i am i'm overwhelmed and i'm very very very very grateful was how many areas of scholarship can adopt you know what i provide in terms of this exploration of this real estate development process can adopt it into their critical uh and important areas of uh of of research on the human condition as a generality we're all concerned essentially with our human condition and for instance these speakers today and i'm just going to run through and thank them all firstly our Gordon Clark um someone i've just known and respected enormously over over many many years who who has led the way in fact probably influenced my thinking in terms of constantly relating what happens in our economic world uh to the impact on society on communities on on people and so on and he has taken this uh to talk about the rise of institutional capitalism of course and the you know the challenges for responsibility that come with that um and you know and and how it then works back to being a responsibility for real estate its production its ownership its management and the occupation of it um and then Richard Flora my uh the co-host of today thank you very much uh Richard Richard of course is well known for having having uh having spurred our interest and understanding in in actually how people live who are the people who live in cities who are the people who thrive in cities why do people want to do that and why do they want to be there and uh and of course you know to to be able to contribute a little to his discussion of that about that behavior and the clustering and how things how things play out offering you know some of the economic or the financial understanding behind that um i'm really grateful to Richard for including that thank you um Larry Summers of course uh you know is uh has a macro view of the world uh and uh but he and you know his tradition his family tradition has been one of um economic behavior and uh of course you know to talk about how real estate uh shapes us and how we shape our world uh you know was a very very nice compliment and you know in in support of the book i appreciate that of course it makes me feel even more responsible for trying to get this right uh but um uh manual albers uh who has also been at Columbia University um and done his studies uh early on and has really made an impact now in talking about how this financialization we heard it many times today how the financialization the players the financial players the capital players all over the world are affecting how decisions are made because they are influencing decisions that were once just so qualitative aspects of our human condition uh they're financializing it they're turning it into a financial metric and therefore changing the way in which it's incorporated um so i'm very very grateful for manual for including that um and and linking uh real you know appreciating and and pointing out how i'm i'm reintroducing real estate into that discussion that he he he leads on labor and capital um and of course Derek uh Wajek has you know so well known uh for looking at uh these um you know the the sort of economic uh financial economic economic geographies and so on of the world and to include real estate into his discussion um of of that and and the total economy um you know thank you very very much um you can see it so much so much more clearly than i but it does it does make me feel uh very very uh interested in pursuing this with rigor um Janelle reminded us Janelle Knox Hayes of course reminded us that when we're talking about real estate we're talking about people and their conditions and reminding us that that condition is uh is particularly pertinent to people who are indigenous landowners uh and all of those who are vulnerable to the problems of climate change and how it will affect our relationship to our land our real estate and so on so Janelle um thank you very much for including me into that and and really then launching the discussion of climate change and the pandemic and our you know our health and our social uh situation uh which Sam picked up on and uh you know linked once again the the question of the pandemic uh through to notions of urban density and reminded us or warned us not to just make a very simplistic an overly simplistic and erroneous um a translation of pandemic to density but to look at actually what we do as human beings in terms of once again our economic behavior how we actually build our buildings how we create spaces between ourselves and so on uh that is the intermediary between the pandemic and and the density of the urban city uh and Rick Pizer whom as I said uh you know has had inspired me about the education of future real estate developers um and you know for for Rick to be working continuing to work with this question of urban sprawl the dynamics the back and forth between urban centers and urban outlying areas and what it means uh to how our environments are are managed and and support communities or don't support communities um that was very very very uh pertinent I think um and of course Rachel Weber who is um you know who has had my uh most profoundest um recognition for her incisiveness I mean she is the one who really zeroes in with the laser beam on developers and what they're doing and how they're acting in the city uh in urban construction and talks about the things that are motivating them uh and you know the and helps me uh understand the difference between the provision of shelter as you know a very valid professional and and economic activity within a community the provision for shelter for a decent economic reward uh and that is what we could call enterprise to going too far with that and raising the notion of speculative self-interest and how that that begins to undermine the whole productive process um so Rachel thank you very much and and of course then you know Ashby uh takes it further to say uh you know it's real estate is a perfect manifestation of all the problems of climate change uh it's it's there it's fixed it's suffering it's vulnerable and you know if we can use it as a sort of you know as as a proxy for ourselves and and what's going to happen to us um by looking at the financial impact on buildings uh with respect to um ignoring uh the building for resiliency and and environmental conditions um then you know that's uh you know that's obviously going to be an important role for understanding real estate um which cannot be anything uh removed from from the climate and the impact of climate um and and once and not only climate but even specifically that open space um I'm really grateful to Jerry uh forward and Jerry Nickelberg for reminding us that you know the question of open space is something that we all think just a knee-jerk reaction we've got to have we've got to have it and it's got to be there and so on but how does it how does it how is it how does it appear who looks after it who what does it what impact does it really have and so on and the details of that are much more complex and of course you know that was followed up by by Richard Green who reminded us that you know some things some external externalities and you know we can give macro economists full credit for this for really not taking the notion of uh externalities uh at face value but rigorously checking to see what can be regarded as such and what what can be responsible for such so such a tremendous input by so many people today uh I'm very very grateful uh hopefully the discussion uh around the book uh the book itself will continue to drive some interest and thought and discussion about all of the things that impact our built environment and and our human condition within it um I want to thank my students of course who over these years have have asked the hard questions and have refused to take pat answers and really were uh the compelling force for doing this book if this book and its discussion continues to inspire them then it has been worth every minute of the writing of it thank you once again to our hosts and to all our fabulous speakers for being here thank you thank you I'm honored and sincerely very very grateful Richard well thank thank thank you patrice and thank you Gordon and uh thanks to all of our contributors I I don't think that I have anything additional to add and it's Friday afternoon other than what I've already said but it just to echo I think what we heard from every single presenter it's a landmark achievement it's a majestic work of history it synthesizes that work of history in the context of urban theory and on top of that it's beautifully done it's it's just a beautiful book and so most of all I just want to convey my congratulations to you patrice and I guess we've known each other for for a long time brought together by Gordon and I and I hope I really get to see you in person soon and I would say that for all of our our participants I I'm now up and around in traveling again a little bit and I'm paying the price with back and shoulder ailments it's funny which my physiotherapist said you haven't done this for 20 months it's no no wonder you know you've been exercising been doing all these things but you're back so be careful when you get back to travel but I I hope to be able to see each and every one of you and patrice particularly you and congratulate you in person in in in New York City again thank you so much for such a marvelous contribution so patrice this this started off as an idea rather than a fact matter and I think I was taken by the sheer scale and significance of the book and and it's been astonishing achievements and you should be very proud indeed of what you've accomplished I think I've been very impressed by the commentary that's been presented today not least of which they've engaged with your book in a detailed way in a sort of in a conceptual way they've marveled at your history so so that that doesn't happen that much in academic life and you know it's a hell of a compliment for the for the book that you've written the the other thing is all of us have got sort of an angle on the book and it's been great to hear some of those angles you know I was very impressed by each one for their specifics if you like and their take and the confidence in which that their take is presented you know they're not intimidated by your book they learn from your book but they've also built on your book and that doesn't come a big compliment than that so just to last sort of points of organization we will be back in contact with all the contributors if they're on the line or still still listening in but we will be basically collecting the final drafts of the commentaries I guess Patrice you will either make them available when they're complete or when they're final but equally these commentaries are going to be part of a be published in Environment Planning A when they're sort of complete and full and that's I think also going to be something to watch and look for as well because in lots of ways the written commentaries they sort of go deep and are interesting in their own right that go well beyond actually what is being presented today so in my world it's 10 to 8 that is 10 to 8 p.m in London time and I'm sort of keen to finish the last couple of chips on my fishing chips and have hope something you know nice and rare than you know that goes down smoothly will accompany that yes and I must say again to thank Richard Flora because between the two of us we really been able to put together speakers and ideas here that I don't think ourselves we could have possibly done so you have you have and you know if you think you know the trio began many many years ago when I'm going to give them but thank you to come around and recircle back with this it's so delightful and I'm truly so so grateful thank you to everyone and we will look forward to publishing and talking further