Washington, D.C. A new report released Tuesday by the Urban Land Institute uncovered a series of factors that are expected to guide real estate investment and shape urban growth in the years ahead.
The report, Finding Certainty in Uncertain Times, found that even in economic uncertainty, there are still some elements of certainty, such as demographic shifts, financial industry restructuring, global competitiveness and sustainable building, that will guide real estate in the future.
The collection of commentaries from ULI’s five senior resident fellows -- Stephen Blank, Edward McMahon, John McIlwain, Thomas Murphy and Michael Horst -- examines trends in population growth, consumer housing preferences, employment, real estate finance, environmental conservation, energy efficiency, venture capital investment and public leadership. These factors, according to Finding Certainty, are converging to shape a new era of urban economics within which cities and urban regions will have to compete in order to be successful in the 21st century.
“These trends will continue regardless of location, of which political party is in power, and of how quickly we recover from the recession,” said the report. “Taken collectively, they will create the ‘new normal.’"
“As the housing markets recover, demand will increase significantly for smaller, greener homes, more rental than in the past, and more compact, walkable urban centers in the suburbs as well as in many, but not all, central cities. The biggest challenge (in center cities) will be finding suitable, affordable locations,” McIlwain wrote in the report. “There will be metro areas that will attract the brightest and best, and will continue to grow and provide opportunities for development. Within these metro areas, some local markets will thrive; these are the compact, walkable communities, which are finding increasing demand as people look to new ways to define livability.”
McMahon, ULI’s senior resident fellow for sustainable development, maintained that the push for more environmentally conscious development practices will be driven at the state and local levels of government, and by the private sector, rather than at the federal level. He cited a steady increase in the number of buildings entering into the U.S. EPA’s Energy Star program, and a surge in the number of Leadership in Energy and Environmental Design (LEED)-certified professionals as evidence that interest in green building has remained strong, despite the recession.