Level Of Development Activity Research Articles

Real Estate Insights Property development activities: value creation or distraction for REITs?

PurposeThis paper examines the evolution and impact of property development activities on REIT performance. The paper provides insights on whether REITs should venture into property development in addition to their core-business of holding income producing properties.Design/methodology/approachThis paper charts and highlights the evolution of development activities of US REITs from 1992 to 2020. The Tobin's Q of property developing REITs and non-property developing REITs are compared using univariate analysis.FindingsDevelopment activities of US REITs grew dramatically during the run up to global financial crisis (GFC) in 2008. The level of development activities has dropped since the GFC and it has not return to its pre-crisis peak. In comparison, development activities of listed property investment companies and homebuilders are less volatile over the same period. The data reveals that property developing REITs enjoy significantly higher Tobin's Q as compared to their non-developing counterparts.Practical implicationsOur graphical evidence from a market without development restriction suggests that development restriction in other REIT regimes has it value in limit REITs' excessive risk-taking tendency during a booming property market. The positive relationship between Tobin's Q and the existence of property development activity support the value creation of this business activity to REITs.Originality/valueThis paper raises overbuilding as a potential cause of the underperformance of the REIT sector during the GFC.

The Relationship between Streetcars and Development Activity: An Examination of Portland and Seattle

In most U.S. cities, streetcars are not primarily pursued for the transportation benefits they might provide but instead for their anticipated development impacts. This paper examines the experiences of Portland and Seattle in order to better understand the nature of development activity around their streetcars. Using a multivariate analysis, the authors found that areas around Portland’s initial line experienced higher levels of development activity than areas not served by the streetcar, although the differences in activity between served and not served areas since the opening of the second line have been insignificant. In Seattle, areas around the first streetcar line experienced greater commercial development activity but less residential activity than nearby unserved areas. These results remained consistent when focusing on the expanded Seattle Streetcar system since the opening of the second line. These findings indicate that in certain contexts streetcars are associated with increased development activity. The results also suggest the need for a more nuanced understanding of the relationship between streetcars and development.

A new deal for displaced people: Orissa's involuntary resettlement policy

Because of its rich natural resources and the new investor-friendly development policies, Orissa in recent years has become an attractive investment destination for large corporations, but the increased level of development activity has only led to displacement on a scale much larger than before. Recognizing the urgent need for a comprehensive policy to address the emerging problems of development-induced displacement, the government of Orissa in 2001 accepted the offer of UNDP assistance in preparing a comprehensive resettlement policy. In July 2005 the UNDP submitted to the government a comprehensive policy draft which was based on an in-depth and a wide-ranging desk study, field research and stakeholder consultation processes. Taking the UNDP draft policy into consideration, the government of Orissa finally announced its own resettlement policy in May 2006. A leading Indian newsmagazine has described this UNDP-initiated resettlement policy as the best policy in India. It is a big step forward; certainly a timely and a very significant development. The new policy demonstrates the commitment of Orissa to an investment climate which is both pro-business and concerned with human welfare.

Measuring Efficiency in Local Governments' Planning and Regulatory Function

Local government in advanced economies is undergoing a period of rapid reform aimed at enhancing its efficiency and effectiveness. However, despite the importance of efficiency measurement in local government it is only relatively recently that mathematical frontier techniques have been applied to local public services. In this study, data envelopment analysis (DEA) is used to measure the technical and scale efficiency of the planning and regulatory function in 173 New South Wales’ local governments. After allowance is made for nondiscretionary environmental factors which may affect the provision of these local public services, such as the level of development activity and heritage/environmental sensitivity, comparison of efficiency across geographic/demographic criteria is made. The results suggests that, on average, planning and regulatory inputs could be reduced to 83.8 percent of the current level based upon observable best-practice whilst productivity losses due to scale effects account for 5.87 percent of total inputs. The results also indicate that inefficiency in smaller rural councils may result from the need to maintain a minimum feasible planning and regulatory department, suggesting that efficiency gains may be obtained from regional co-operation in this area.