Worrisomely, I have been somewhat conflicted over the past few weeks. Academically and philosophically, I am engrossed in conjuring up a Keynote Address for an international conference in the autumn proselytising “A Commons Transition” in which a post-capitalist market and a more enlightened state are at the service of the citizens as commoners. Professionally and practically, I have been engaged, on behalf of a property development company, in disentangling the intricacies of the Social Value Act.

“Doing well by doing good” has long been a familiar dictum in both the ethical business and the responsible built environment milieux. Sometimes attributed to Benjamin Franklin, the phrase seems forever fashionable, yet remains remarkably vague. Its latest manifestation over recent years has been in the field of Social Value (SV), which has grown out of the thinking surrounding corporate responsibility, ethical economics, social enterprise and valuation.

All responsible parties to the process of urban development are becoming more keenly focused on ensuring ‘genuine’ value for money in the delivery of improvements to the built environment for everyone concerned. But it takes time, and the property industry is already finding it a lengthy, tortuous and formidable journey.

Real Estate Realities

Whilst recognising the growing need for better ways to account for social, economic and environmental value in framing property investment and development decisions, a range of issues worthy of consideration emerge regarding present practice. Some of these can best be summarised as follows:

1. The present process is complex, time-consuming, expensive, cryptic, concealed, and extremely volatile in both adoption and application.
2. Context should be everything. Social value can mean different things, to different people, in different places at different times. Especially true when it comes to urban developmentInvestors, developers and professional teams are having to learn how to understand and demonstrate the way their buildings can add significant value to society and the local community through the manner in which they are located, designed, built, managed and occupied. Some of this is genuine, some artifice, but the game is on! (See, for example, “Measuring the Social Value of Offices”, BCO, 2016).
3. SV is becoming ‘big business’; and, in the usual way of things, the big players will best be able to ‘game the system’. Witness the springing-up of specialist SV consultancy services and the promotion of modish valuation methodologies.
4. Likewise, while the precepts of ‘proportionality’, ‘comparability’ and ‘standardisation’ proclaimed by Government are seemingly worthy ones, they preclude the situational exercise of good sense and professional judgement. This is compounded by the mushrooming use of automated evaluation tools.
5. An intrinsic ambivalence exists between consistency and discretion. On the one hand, investors and developers seek confidence and certainty in their dealings. On the other, they contend that ‘no-one-size-fits-all’ in terms of specific location, design, operation and disposal.
6. The ‘March of the Measurers’ is relentless, and though more information, better benchmarked, is always welcome, there is a certain need for caution, as measurement in the built environment is inherently idiosyncratic given the diversity of the sector and the vast range of outcomes it is trying to achieve.
7. The problem of ‘additionality’ appears largely to be ignored. Additionality is all about the marginal difference a project makes, and what value it adds. For, in a social value context, it is relevant to ask the question: what difference is the development making compared to another proposal? Or, what would happen if the project did not proceed?– Professional valuers will be all too well aware that relatively small changes in the constituent factors of time, cost, income, interest and yield can collectively have massive impacts upon value – especially if all are moving in the same direction. And this just concerns the ‘tangible’ elements of a valuation. Once you start adding intangible proxies to the equation the result becomes a delusional fantasy.
8. There is sensitivity about the use of ‘financial proxies’ and other estimates and assumptions made in the Social Return On Investment method. Sometimes described as “dressing up one’s own prejudices”, sometimes seen as “professional judgements”. (You pays your money, and you takes your choice!).

Enigmatic Epitaph

Reframing a recurring ideal frequently reorders and refreshes purposeful ambition; but it can also confuse and complicate public perception and professional practice. Arguably, this seems to be precisely the case with Social Value as an instrument of policy formulation and plan implementation. As with the notion of “sustainability” some 30 or so years ago, the theory is unquestionably a force for good, and assuredly will have a positive influence over time. It would be rather surprising if it wasn’t and didn’t. But the present bandwagon on which many social value devotees travel has created a vehicle promising all kinds of exciting destinations and fancy fare structures. A force for good it might be – but presently it is one full of flattering rhetoric, false prophets and flawed measurement.