World Economic Forum develops a framework for the Future of Real Estate
Building back better – shaping the future of real estate where buildings are liveable, sustainable, resilient and affordable.
For years now, many of us in the real estate community have recognized the pressing need for change. The COVID-19 pandemic has accelerated certain trends and affected many of the underlying demand drivers of the real estate industry. The convergence of multiple crises – public health, social, economic, and planetary – has served to drive home the urgency of our efforts to identify a few simple imperatives and create a set of signposts that could help the industry ‘build back better’.
In our report – A Framework for the Future of Real Estate – we have developed a vision for a future in which buildings provide us with comfort, are equipped for the most unprecedented of events, support our health and the planet and are affordable and accessible for all of society.
We resolved that real estate should be liveable, creating suitable habitats for a rich, culturally vibrant existence. Typically, in major cities around the world, people spend about 90% of the day indoors, which makes buildings instrumental in ensuring liveability. A combination of factors contributes to a good quality of life, including well-developed buildings and human-centric and inclusive design.
We resolved that real estate should be sustainable, optimized for zero carbon output in every aspect from construction to operations. The environmental impact of real estate assets is highlighted by the fact that buildings account for 40% of global greenhouse gas emissions, 50% of the world’s energy consumption and 40% of raw materials. If we are to meet net zero carbon goals, we need to accelerate action; action that will require large-scale energy retrofits of older existing buildings and, crucially, the renovation or repurposing of buildings rather than demolition.
Real estate should also be resilient, capable of adapting to whatever exigencies might arise, by mitigating the effects of unforeseen natural and man-made events, such as climate, financial and health crises, and to preserve the cultural identity of communities. Assets need to withstand a variety of unpredictable shocks and be flexible to adapt to changing patterns of working and living throughout their full lifecycle.
And real estate should be affordable, with housing, transportation and essential services available to all. The provision of fair access to quality space to live and do business is essential to the overall health of society. Affordability must comprise both financial access (affordable rents, low barriers to home ownership) and access to the appropriate standard of assets in terms of space, health, location and access to basic services.
Realizing this vision and delivering buildings that are liveable, sustainable, resilient, and affordable will require the use of five critical enablers:
- Digitalization and innovation
- Robust regulatory frameworks
- Talent and knowledge
- Proof of value
- Stakeholder engagement
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