The Predistribution Initiative (PDI) is focused on ESG implications of investment structures and practices. There is growing concern that as institutional investors migrate up the risk-return spectrum for yield and allocate more to residential real estate (RE), they are driving up valuations and competing with potential individual homeowners, thereby exacerbating the affordable housing crisis. Institutional investors are typically not intentionally causing harm and likely want to avoid these negative impacts, so are there more regenerative investment structures that they can allocate to with exposure to residential RE and risk adjusted returns?
Recognizing that this is a topic with huge impact, and there are many approaches to solutions, PDI curated a 1.5 hour roundtable for diverse stakeholders to discuss the issues, potential solutions, and learn from one another’s perspectives. Attendees included asset owners and allocators, asset managers, lenders, project developers, companies, activists, and community members.
Because this roundtable was held under Chatham House Rule, participant comments captured in this key takeaway document are anonymized.
Given interest by participants in continuing the discussion, PDI is planning additional programming on this topic in the future. Participants noted the importance of including additional people who were not already focused on this topic, but who play a critical role or have important relevant perspectives. For more information, please contact: firstname.lastname@example.org and sign up for updates via the PDI newsletter at www.predistributioninitiative.org.
This document includes key takeaways discussed during the July 21 discussion. Sections include:
Housing is a human right which may be threatened by current investment structures
Potential solutions and the opportunity for institutional investors to play a role
Examples of investment structures aiming to more equitably distribute risk and return