In case you missed it, ESI, along with Diamond and Associates, Catharine Street Consulting and Danielle DiLeo Kim, LLC announced the launch of a new line of advisory services to developers incorporating social impacts into their real estate projects. We decided to ask our social impacts team a few questions regarding its importance.
Those interviewed for this blog post include Danielle DiLeo Kim (DDK) with Danielle DiLeo Kim Urban Design + Planning, Adam Wodka (AW) with Catharine Street Consulting, Roy Diamond (RD) with Diamond and Associates, and Andrea Mannino (AM) with Econsult Solutions.
Why is it important to measure the social impacts of a real estate project?
DDK: Development projects that positively contribute to their immediate neighborhoods and the economic vitality of a city will soon be the expected norm, just as sustainable or LEED-rated buildings are necessary for efficient building performance. Many urban communities are informed, mobilized, and engaged in the positive evolution of their neighborhoods, and I believe they have a right to request that private development contribute positively to their neighborhood efforts.
AW: Measuring social impact allows developers to quantify the benefits of their projects for three primary reasons:
- To clearly communicate these benefits to members of the local community, advisory boards, funders, and local elected officials;
- To remain competitive for the increasing number of funding and development opportunities that require social impact metrics, such as subsidies like the New Markets Tax Credit or RFPs from the Philadelphia Redevelopment Authority; and
- To improve decision-making for developers and mission-driven funders to better understand what types of projects most efficiently produce the greatest impacts.
AM: We have seen in City Council and with the administration, changes to requirements for development of City owned land and now with many different policy agendas and proposals, new requirements for commercial development in the city. No matter your views on whether the city faces a poverty problem versus an affordable housing problem, we have families in need of affordable housing, we have communities in need of social services, we have children in need of safe parks, we have adults in need of entry level jobs that lead to career paths, and the list goes on. While the bottom line is important in commercial real estate development—it has to be paid for somehow—there are intentional ways that developers can incorporate social impacts into their projects to create more equitable and greater economic benefits for the communities in which those projects are occurring.
What does social impact mean to you?
DDK: Positive social impact means that a community is made better as the result of a development project being located there. That can mean opportunities are created such as job creation during construction and in the long-term uses of the building, or neighborhood resources that didn’t exist before that are now serving the local community. Additionally, positive social impact can mean the design of a building’s public realm contributes to the vitality and safety of a neighborhood.
RD: “Social impact” is based upon the economic calculation of designing investments to have both a market return and a social benefit which is then more likely to enhance the economic return. Take for instance, a healthcare company builds a research center to attract smart scientists to invent new products; it could stop there and the return would be a measure of the capital investment against the profits of the products created and sold. But perhaps better scientists could be recruited and retained, and more of the products created would be sold, if:
- It sets aside laboratory space where students from the surrounding high schools are exposed to the research techniques and challenges, which potentially grows additional human capital for the company, distinguishes it from its competitors, and strengthens its brand externally for consumers and internally for employee morale;
- It makes adjacent land available at below market prices to developers for the development of affordable housing, thereby improving the safety and attractiveness of the research center’s location. In addition, the research center can provide opportunities for entry-level and blue collar jobs for those living in the affordable housing, which could reduce turnover when the labor force lives in close proximity.
AW: “Social impact” is a concept that acknowledges the fact that all buildings—commercial, residential, institutional, and industrial—house uses that have profound impacts on the organizations, businesses, and families with and around them. It captures the positive impacts of real estate projects on people, particularly low-income and vulnerable populations in need of support and stability, in order to uplift others, create economic opportunities, and reshape the physical and socioeconomic landscape in our communities.
AM: “Social impact” to me is intentional, inclusive, and equitable; it is community and person focused, and when done correctly, can raise the profile of a commercial real estate project beyond just the square footage, number of units, and tenants. Commercial real estate development has a large impact on its surrounding community and should be respectful of that community, and be a positive addition to that community in the eyes of that community, in that the benefits of development are spread across a wider population.
How can social impacts be used to address the challenges faced by the City of Philadelphia?
DDK: Parts of Philadelphia are experiencing tremendous growth. This growth is perceived by some as good and others as creating an inequitable divide. Likely it is both. The threat of gentrification throughout Philadelphia has mobilized many transitional neighborhoods to negotiate for and expect to receive better terms through the development process and final project. The City’s zoning code and Civic Design Review process help to facilitate important dialogue about building use, design, and public realm between communities and developers, but more can be done proactively as well.
Professionally, I have been asked to prepare urban design guidelines in advance of an RFP being issued to developers to establish best practices for neighborhood-sensitive urban development. This has resulted in the inception of a project that begins with an expectation that its physical form and programmatic arrangement on the site will positively impact its neighborhood.
AW: Social impact real estate projects are already having a significant impact on addressing Philadelphia’s challenges, including several clients of ours such as the BOK building in South Philadelphia which offers affordable rental rates to catalyze job creation for local entrepreneurs, and the future Equal Justice Center which will co-locate over a dozen legal aid nonprofits to improve access to free legal services for low-income Philadelphians. While these projects are making a real difference in the City, the more projects that introduce social impact components, the more we can work together to address unemployment, food insecurity, homelessness, and rising rents.
AM: Incorporating social impact into real estate development can’t cure all of the city’s ills, but it can be an important component in addressing needed structural changes by providing accessible jobs with livable wages and growing the city’s tax base. Social impact in commercial real estate can foster partnerships and leverage resources for important and needed developments that are very difficult to provide financially, such as affordable housing. Social impact can be a way for Philadelphia to help change its commercial development narrative from being over-taxed and over-regulated to one of being innovative, positioning itself for long-term and sustainable growth, encouraging smart development, and creating dialogues between commercial developers and its communities.
Andrea Mannino is a director at ESI where she leads projects on economic development and market studies for both market rate developments and affordable housing. Prior to joining ESI, Ms. Mannino worked at the Department of Revenue, City of Philadelphia, as the Special Assistant to the Revenue Commissioner.
Danielle DiLeo Kim, AIA leads, manages, and delivers transformational urban development projects for city agencies, non-profits, and developers. Leveraging her passion for long-term planning and community development in Philadelphia, she is consulting as Launch Director for USA250, Inc. which is leading the celebration of the country’s 250th anniversary in 2026 nationally and in Philadelphia.
Roy Diamond has served as a lawyer, planner, developer, policy advisor, and development consultant in the affordable housing arena for 38 years, in which capacity he has been responsible for the completion of approximately 8,400 units comprising approximately $1.5B. He is currently the Principal of Diamond and Associates, Multifamily Management of Philadelphia, and a Consultant to Rittenhouse Affordable, a real estate broker of affordable multifamily properties.
Adam Wodka is a community development professional with over 10 years of experience in the public, private, and non-profit sectors. As Principal of Catharine Street Consulting, Adam has supported social impact real estate projects in Philadelphia and beyond in securing financing, quantifying economic and community impacts, and incorporating feedback from stakeholders