Public health crises such as the COVID-19 pandemic, the obesity epidemic, and heat-related illnesses exacerbated by climate change spotlight the social, economic, and political forces that underlie disparities in health outcomes across different groups of people in the same community. These so-called “social determinants of health” contribute to differences in life expectancy of a decade or more across different neighborhoods in the same city. Architectural design and land-use configuration can increase or decrease that disparity by controlling people’s exposure to environmental hazards, such as extreme heat and toxic chemicals, and access to health-promoting behaviors like physical activity and healthy eating.

In light of these concerns, policy makers and public health advocates are focusing on how large-scale private real estate developments can help address health disparities. Social determinants of health play an increasing role in the approval process for such projects. Community groups and permit-granting boards expect developers to demonstrate how a proposed project would benefit the surrounding neighborhood. Often, these conversations focus on social benefits: job creation; housing access; and improvements like parks, walking paths, and better public transit. Separately, ever stricter land-use and environmental-permitting programs require developers to address greenhouse-gas emissions, climate resilience, and other environmental impacts.

At the same time, recent moves by the US Securities and Exchange Commission to standardize reporting of climate risks have prompted publicly traded or regulated investors, such as commercial banks and real estate investment trusts, to include screening questions about greenhouse-gas emissions and climate-change risk in their evaluations of real estate development projects. Developers have long been adept at evaluating how market factors outside their direct control will affect their projected return on investment. But they are now under increasing pressure to assess the effects of their projects, positive and negative, on society and the environment as well. So-called environmental, social, and governance (ESG) frameworks have become the predominant way for impact-oriented investors to evaluate investments.

But ESG screening is not well suited to evaluating the positive social and environmental effects of an individual real estate development project. ESG generally opts for universal measures even though real estate values are rooted in the contours of place. And even when ESG screening uses building or site-specific measures such as LEED ratings, it does not address the ways in which a development parcel affects and is affected by its surroundings. Finally, the ESG framework addresses each of its three factors separately, when in fact they are interrelated and often synergistic in real estate projects.

The real estate industry needs a better approach for evaluating the impacts of development. In what follows, we propose applying the principles of a public health method called health situation analysis. This superior path brings a systematic approach to defining, measuring, and addressing public health challenges in a context-sensitive way. When applied to commercial real estate development, it can reengineer the public approval process by anchoring social impact in neighborhood health and well-being in ways evident to residents and community members.

Read the full article about health situation analysis by Adele Houghton and Matthew Kiefer at Stanford Social Innovation Review.