Global Perspectives on Real Estate and Urban Development in a Time of Stress

The 2020 John M. Quigley Medal Lecture to the American Real Estate and Urban Economics Association

In January 2020 I was honored, and humbled, to receive AREUEA's John M. Quigley Medal.  I've described the award, and other awardees to date, in a previous post.  Yet another post describes some of John's life and work, and will explain to anyone not in our field why this award bears his name.

One reason the Quigley Medal is such an honor is that the recipient is provided the opportunity to make a presentation to the members of AREUEA at the National Meeting, held in late May, normally in Washington DC.  This year, because of the coronavirus, the physical meeting had to be cancelled.  Fortunately, through the efforts of meeting chairs Lauren Lambie-Hanson, Mike Eriksen, and Karen Pence, and many others, AREUEA was able to use the teleconferencing facilities of the Philadelphia Federal Reserve Bank to hold a virtual meeting of some 400 AREUEA members, many of whom attended the Quigley Medal presentation.

When I began work on the presentation, I quickly determined that it would have a global focus.  While I've done plenty of work on U.S. urban development, especially housing markets and policy, it was doubtless my international work that prompted colleagues to seriously consider me for this award.  Plus, among many other accomplishments, John Quigley was one of the early driving forces in expanding AREUEA's horizons beyond the United States.

The next decision was about framing the substance of the talk.  For some time the following "eight big ideas" has served as a useful framework:

1. Stylized facts about urbanization and development around the world
2. Why cities exist; trade, economies of scale, agglomeration
3. Location within cities
4. Key assets: housing (the “real side”); housing finance; and commercial real estate
5. Transportation and other infrastructure
6. Local governance and finance
7. Environmental problems
8. The urban economy and the aggregate economy

In addition to the "big ideas," the Quigley presentation is an opportunity to make a few observations about how we work, who we work for, and where.

As I filled in the presentation, two further challenges presented themselves.  First, by the time March rolled around it was clear that I couldn't ignore the elephant in the room, the coronavirus pandemic.  That's been addressed in many other places, of course, but it had to be brought into the discussion.  Second, even superficial discussion of all eight "big ideas" would take us far over time for any such presentation.  So I chose to highlight just two, a look at some global patterns in urbanization and development; and location within cities.

The decision to use the phrase "time of stress" in the title instead of "pandemic" was deliberate.  The pandemic -- and possible future pandemics -- is not the only thing that could shock our economies and markets and societies in profound ways.  In other work, with Morris Davis and Julia Coronado on "The Future of Real Estate," we are examining a number of risks that could shock cities and our real estate markets.  Here's a "prescient" slide from our 2018 presentation to the AREUEA/AsRES conference in Songdo, Korea:

Slide from 2018 presentation to AREUEA/AsRES, Songdo Korea

Well, weren't we special -- we managed to squeeze "pandemics" in as the last bullet point on the slide, with little more to say about it.  Were we truly prescient?  Or were we the Jeane Dixons of real estate economics -- make enough predictions and maybe one of them will come to pass?

If the coronavirus was one elephant in the room, by the time of the presentation, there was another source of stress.  Three days before our virtual meeting, George Floyd was killed by a Minneapolis policeman, and by the time of the presentation, demonstrations against his killing, and against a wide range of racial disparities and injustices, had begun around the U.S. and, eventually, the world.

Racial (and ethnic) disparities, discrimination, segregation, and a host of related issues can be examined under each of the eight "big ideas."  My own modest work in this area has focused mainly on housing.  It could certainly be argued that the topic is worthy of separate recognition as a ninth "big idea."  And it fits into the global perspective of the presentation, since issues of race and ethnicity are hardly unique to the United States, although our history has produced some outcomes that are unique to this country.  The issues are large and require more than brief discussion.  Therefore I've abstracted from them in this presentation.  In due course I'll have more to say in this blog about some of them, separately.

The Links You've Been Waiting For

Shortly after I made the presentation, AREUEA posted a pdf version of the slides here.

The native PowerPoint contains notes attached to many (not all) of the slides, which will help decipher some of the material.  Download the PowerPoint slides here.  Anyone interested in using some of these slides in their own teaching or presentations can easily pull them out and add to your own PowerPoint.  Feel free to do so, though attribution is always appreciated.

Thanks to the good offices of the Philadelphia Fed, we have a video of the original presentation, which you can download here.  Haircut during a pandemic?  Not for me!  Also, you can see I'm a bit out of practice, since I insert an "uh" about every other sentence.  Students:  be warned, learn to excise these kinds of tics from your presentations.  Do as I say, not as I do!

More to Come

I will, in due course, add an expanded version that touches on all eight of the "big ideas.  Watch this space!