Sustainable Development

Leverage a higher return on place-making assets through quadruple net value analysis.

Green-labeling and building to a code should not be the measure of sustainability.

The book that makes Urban Design and the Bottom Line stand out is the incorporation of visual elements to impact value and the sense of place (sense of identity). Financial returns are possible without a holistic approach to design, but good design creates value perpetually through satisfied consumers who create habits of repeat visitation to a well-designed place. The places that people live, work, visit, and recommend to others are attractive for certain reasons, and this book provides the criteria for creating attractive places. The idea of attracting people is the goal of any developer: pleasing the public/market. The design approach provided by this book is considered holistic and even interdisciplinary because the value compounds on itself, with no specific starting point. Economic value (revenue from tourism and taxes) is added to place because a well-designed place is inviting due to its environmental value (green space) which develops the opportunity for social interaction (residential amenities or community facilities), leading to the enduring iconic recognition of a well-designed place (visual value).

Cradle to Cradle follows the idea of what true sustainability is which is similar to the concept of zero net impact in development. Zero net impact is mostly used in terms of storm water drainage, stating that the development should not produce more storm water runoff after development than what was present on the site prior to development. the same concept should be applied to the term sustainability. Sustainable development by definition is, "development that meets the needs of the future without compromising the ability of future generations to meet their own needs." I believe the key concept to understand is the "without compromising the ability of future generations." The book suggests that the only way to ensure one's version of sustainability is not only through recycling the end product but instead from manufacturing/production throughout the life cycle of the product.

Sustainability Dividend

The sustainability dividend concept revolves around an asset's increased financial performance by reducing operating costs through environmentally-conscious design choices that add to the overall value of an asset and that prove to be cost-effective in the long-run. Lower operating costs will equate to additional net income for an asset. In the case for commercial properties, increasing rental rates does not always equate to an increase in net income. A sustainability dividend is created when an enduring increase in net profit is obtained by lowering operating costs, keeping rent at a marketable rate.

The goal of the sustainability dividend is to increase the net profit generated by real estate assets. The capitalization of net income stream method of property valuation proves that when an asset increases profit, one of two things happen:

The rate of return for the property increases, meaning the asset is generating more income while the value of the asset decreases or remains the same. The sustainability dividend suggests that this occurs because the property has no additional and enduring return on investment. Simply increasing the income for an asset does not result in additional value for the asset.
The rate of return for an asset decreases. This means that as the income of the property increases, the value of the property also increases. The rate of return can also decrease if the value of the property increases and the income remains constant.

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