Return on Investment

The ROI on a place development project will either enable it to happen or leave it as an idea on the shelf.

In some markets, the ROI is why some places stagnate and decline with time rather than climb the next S-Curve.

ROI will always be with us. It's how the marketplace works.

In transformative place development, three ecosystems increase ROI potential: People, Land, and Marketplace. Not focusing on the three can cause specific neighborhoods, commercial districts, and city regions to stagnate or decline over time.

Creating a sense of place requires a wide-angle lens to solve problems that affect your ecosystems of people, land, and the marketplace. Over time, the ROI for physical development projects moves positively.

What holds transformative place development varies across neighborhoods, districts, and city-regions. In some cases, the ROI gets better when the public sector reduces the tax burden and regulations increase the cost of construction.

In other cases, it could be the lack of a 4th or 5th bedroom that led some people with the means to choose neighborhoods elsewhere that match their needs. 

Or, the hotel project doesn't get financed because the market demand is lower in a pandemic than in an environment of high travel.

Something within the ecosystem needs tinkering that switches a line or two in the proforma that makes a development project viable. With the right mix of creators, critics, and tinkerers, a project idea on the shelf might get new life. It's just a matter of time.