Context and Publisher Information

The item titled "Social value is the key to unlocking urban transformation" was created by Mark Edward Rose, Chair and Chief Executive Officer of Avison Young, and published by the World Economic Forum (WEF) on September 24, 2024. This article addresses the urgent need for urban regeneration in the wake of the COVID-19 pandemic, focusing on the concept of social value in transforming urban environments.

🏙️ The Need for Urban Transformation

Cities are facing significant challenges, including increased inequality and urban decline, exacerbated by the pandemic. Issues like online shopping, flexible working, affordable housing shortages, rising crime, and inflation have intensified these problems. The real estate sector, however, is beginning to embrace its role in addressing these challenges, moving beyond simple financial returns to consider social value outcomes.

🌱 Growing Focus on Social Value

There is a notable shift in the private sector towards a broader environmental, social, and governance (ESG) agenda. Companies are beginning to prioritize social value in urban regeneration projects. For instance, Nuveen Real Estate aims for $15 billion in real estate assets under management by 2026 to address social deprivation and inequality. Similarly, Legal & General plans to invest £4 billion into urban regeneration in the West Midlands by 2031, highlighting a growing trend in impact investing, which has expanded by over 60% since 2020.

🤝 Mobilizing Investor Capital

Public-private partnerships (PPPs) are increasingly seen as essential for unlocking large-scale urban development projects. These collaborations allow for shared resources, such as public land and favorable borrowing rates, which can de-risk projects and stimulate further private investment.

⚠️ Key Challenges to Urban Transformation

Despite the increasing willingness to collaborate, three main challenges persist:

1. The time required to deliver urban regeneration projects amidst political changes.

2. The need for shared risk and return among participants, balancing social benefits with commercial viability.

3. The difficulty in quantifying and capturing non-financial social value benefits, especially in long-term projects aimed at improving community health and social integration.

🚀 The Path Forward

While solutions exist for these challenges, there is no one-size-fits-all approach. Avison Young is collaborating with the World Economic Forum to address these issues, focusing on how local governments can effectively partner with the private sector to achieve social value outcomes that are crucial for revitalizing urban communities.