Juan Huicochea Mason MSRED ‘22 and Fábio Duarte published an article in Urban Land magazine last week. They discuss how green financial tools can be used to foster transit-oriented development (TOD) in cities, with mutual advantages to residents, government, and real estate developers. According to the article, the world needs, “more than $6 trillion in annual infrastructure commitment to achieve proper sustainable development by 2050,” the problem of funding this actually comes from a lack of projects in which to invest.
Duarte and Mason outline a framework for making TOD projects attainable involving six key points:
- Revenues – top priority
- De-risking liabilities – should help link revenues, financial vehicles, and policies with legal liabilities.
- Local policies – significant for TOD’s short-term financial performance.
- Governance – has direct influence over a project’s financial performance.
- ESG market maturity – comes from the achievement of a more scalable, transparent, and liquid market.
- ESG finance and asset liabilities – the rapprochement of asset and financial standards.
The authors want to thank: Siqi Zheng, Juan Palacios, James Scott, Steven La, Kairos Shen, Sara Anzinger, Zachary Solomon, Roger Mann, and Christina Marin for helping with this research.
This article is based on a full research report, by the same authors, to be released by CRE. The research was supported by CRE’s Wang Award.
