The way in which value is conceived is slowly changing in the property industry.
As Mariana Mazzucato states in her recent book The Value of Everything, capitalism has become too heavily focused on value extraction rather than value creation – the process that drives a healthy economy and society.
This is becoming more apparent in the property sector, where developers are starting to notice the importance of well-designed public realm and are paying greater attention to the demands and experience of the end users. When the approach towards measuring and creating value alters, so does the role of the architect, developer and operator.
Traditionally, development focuses solely on the building itself rather than the purpose of the development and those that will occupy it. The structure of the development process dictates a narrow focus. The project’s proposed and predicted economic value is the starting point and while environmental and social factors are important considerations for the architect, they are rarely internalised by the client. If they are, they are seen as an operational matter instead of a foundational aspect of each project.
Yet, as an industry, we are moving away from this insular and dated approach to value. This is driven in part by the Social Value Act, introduced in 2013 to raise public procurement standards, alter investor expectations and show businesses the intrinsic value created by making a positive contribution through their work.
Capturing and understanding the social value of a development does not neglect the importance of sound finances. After all, to make development possible, the sums need to add up. But by widening our scope to consider the social value – the development’s impact on the people and place that surround it – we gain a greater, more complete image of a project, beyond its status as simply an asset.
The concept of social value in development becomes even more important when you consider the situation we now find ourselves in. In the midst of a housing crisis, tackling the interrelated issues of undersupply and affordability means that the entire sector faces pressure to deliver homes – and fast.
While this is undoubtedly important, it is also essential that the right type of homes are built in the right places. This requires us as an industry to think about the end user and how the surrounding environment will interact with the buildings, using them as the focal points for all developments.
A variety of processes and procedures are available to raise the importance of social value in development. One example is the use of post-occupancy evaluation, outlined by RIBA, to help improve design standards and ensure that the building’s user-friendliness and performance is maximised. These evaluations help get to the root of developers’ and occupants’ needs, understanding how a building works in practice and how each building can be fine-tuned to meet the demands of the developer and occupant.
With architects increasingly being asked to demonstrate the value they create, establishing social value as an empiric measure that can be applied throughout the built environment, rather than just a procurement standard question, is a decisive step in the right direction.
A social value measurement that architects and developers alike can use must go beyond a development’s economic concerns. As an industry, we need to understand the impact of our work and the best way to do that is by pursuing social value. Designing and delivering buildings that create value for areas, rather than extract value, are what a modern, customer-centric property industry must endeavour to do.
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