4 reasons the real estate industry should invest in open spaces
The Urban Land Institute makes the case for open space
Parks and open spaces are essential for vibrant and healthy communities. But with tight public budgets, it can be challenging to create the high-quality open spaces communities need.
Recent research by the Urban Land Institute (ULI) may help encourage developers and investors to support parks and open spaces. In The Case for Open Space: Why the Real Estate Industry Should Invest in Parks and Open Spaces, ULI contends that there is a strong business case for the private sector to invest in places we all share.
The report identifies a range of reasons why investment in open spaces benefit the private sector, from increased business for retail tenants to faster zoning approvals for real estate projects. It also demonstrates that developers can assume a range of roles and responsibilities in the creation of public space, providing flexibility and opportunities to collaborate and innovate with non-profits and the public sector.
Here we highlight four of the reasons for the real estate industry to invest in parks and open space and share projects that present compelling examples of why these types of investments by the private sector make good sense for both communities and businesses.
1. Equitable access to parks can enhance a project’s financial success
When private entities invest in park and open space improvements that help a community thrive, it benefits both the community and those involved with the associated development project. Community engagement, a commitment to equitable access and project plans adapted to local needs build trust and buy-in for the project among residents. A commitment to workforce development, small business retention and affordable housing can also advance job creation, boost local economic development and support existing residents in the neighborhood.
Hunter’s Point South is New York City’s largest new affordable housing complex in more than 30 years, including 925 permanently affordable units, a new public high school, substantial retail space and essential community assets such as a waterfront park. As part of the project, private developers creating Hunter’s Point are required to provide annual payments to the City to help fund maintenance for the waterfront park. The 11-acre park serves as a model for waterfront resilience and acts as a buffer against storm surges. Upon full completion, the Hunter’s Point South development is anticipated to catalyze over $2 billion in private investment and create more than 4,600 jobs.
2. Parks can enhance long-term real estate value
Numerous studies have shown that when a property is adjacent to a park or open space, its value is significantly increased — by up to 40 percent. In contrast, poorly maintained parks can detract from the vibrancy and value of nearby properties.
Developers and building owners can support this increase in value in their own properties by providing funding for new or improved parks and open spaces, either through individual project investments or through financial contributions to intermediaries such as conservancies or business improvement districts.
Steady revenue streams for operations can also help. These funds can transform underused public assets into accessible, vibrant, inclusive and financially sustainable spaces, while also supporting additional development.
Levy Park is a 5.9-acre public park in Houston, Texas, that was renovated to become the central component of an urban activity center. The park renovation — spearheaded by the Upper Kirby Redevelopment Authority (UKRA) — was completed with public funds, but maintenance is funded entirely through a partnership with Midway, a Houston-based real estate investment and development firm. As part of the agreement, Midway was allowed to develop an office building, restaurant space and residential tower adjacent to the park. The park now hosts up to 10,000 visitors per week (up from 75 visitors per week) and was globally recognized as a ULI Urban Open Space Award winner in 2018.
3. Community-driven programming in parks strengthens the marketability of private developments
The best case for everyone is when the open spaces developers invest in remain well-maintained and activated. In fact, sites that are not well programmed or maintained can become underutilized and susceptible to vandalism.
Developers can contribute in a range of ways to keep spaces vibrant — from providing financial support for community-driven programming to fully managing programming and operations — while still leveraging community input. Thoughtful programming can promote social interaction, community ownership and pedestrian activity, boosting economic development and supporting vibrant, thriving neighborhoods.
Guthrie Green. Built and managed by the George Kaiser Family Foundation, Guthrie Green in Tulsa, Oklahoma, transformed a truck-loading facility into a vibrant, highly programmed urban park that now serves as a model for sustainability. The foundation oversees ownership and maintenance of the park, including a robust community outreach process that invites all local residents, business owners, cultural organizations and city officials to submit ideas for programming on a weekly basis. The park has become the area’s leading destination since its 2012 opening, drawing 3,000 people every week to daily activities and sparking $150 million in public/private investment to a variety of commercial and residential projects in Tulsa’s emerging Arts District.
4. Investing in parks can help developers secure valuable zoning incentives and needed public support
By prioritizing the development, maintenance or operation of parks and open space from the start of an associated project, developers can garner public support (including from influential members of the community), be competitive in bidding for development opportunities on publicly controlled land, and more quickly receive the necessary approvals from public agencies to move projects forward. Local jurisdictions may also offer innovative zoning incentives for including open spaces as project components, allowing developers to build larger, higher-density projects than would be permitted under traditional zoning.
Solaris Plaza is a 30,000-square-foot open space in Vail, Colorado, at the center of a mixed-use project that replaced a parking lot and an aging shopping center. The town of Vail allowed the adjacent development to be built at additional density and height because the project included the public plaza. Since 2010, it has become the central gathering place for residents and visitors to Vail. Capital expenditures for the plaza were privately financed through the development of the larger Solaris project. The town of Vail operates the space and manages on-site programming through a business improvement district and easement, while the developer maintains the plaza.
Interested in compelling your real estate sector to invest in public space? Download the full report here.
ULI is grateful to the Robert Wood Johnson Foundation for its support of this research.
Reimagining the Civic Commons is a collaboration between The JPB Foundation, the John S. and James L. Knight Foundation, The Kresge Foundation, The Rockefeller Foundation and local partners.
