Social Equity Means Development Needs to Benefit Surrounding Communities

For years, sustainability in real estate has focused on the environment. We’ve prioritized lower emissions, better resource conservation and energy-efficient design. But the story is evolving, and the next chapter goes beyond green. 

Enter social equity — a new dimension that’s not just about checking boxes but also about recognizing the full impact of real estate projects on people and communities. For developers, this means ensuring that development benefits the communities we shape, not just the land we build on. It’s about seeing ourselves not only as builders but as essential partners in creating resilient, welcoming communities that endure.

Certifications like LEED have already begun leading the charge, adding social equity components to their sustainability frameworks. But make no mistake: LEED is only the beginning. A focus on social equity will continue to grow, with similar guidelines likely to emerge across other certification programs both in the United States and globally. This shift isn’t about added tasks — it’s about helping developers identify where their projects can make a meaningful social impact, offering a more holistic and lasting value. Instead of asking, “How much extra work will this mean?” a better question might be, “How can we showcase what we’re already doing to create long-term positive outcomes?”

To understand where we are headed, consider the LEED social equity checklist as a starting point. It’s no longer just about meeting environmental targets. The framework expands to include considerations like cultural awareness, community resilience, and access to shared spaces and amenities. These are not abstract goals; they are the building blocks of vibrant communities. Frameworks like these will soon become the standard playbook for creating lasting community value.

At first, this might feel like uncharted territory for developers focused on schedules and ROI. However, developers are already engaging stakeholders in informal ways. These guidelines encourage a more intentional approach, making community involvement an essential part of project design. The result? Developments that are better accepted and more likely to thrive over time.

Social equity frameworks also push us to consider how climate risks impact people, not just buildings. How will rising temperatures affect community health? Does the development worsen or improve flooding in the surrounding area? How will heat and flooding impact lower-income residents? This expanded perspective ensures climate resilience protects people as much as property.

Real estate history offers valuable lessons. Paseo Caribe in Puerto Rico was a high-profile mixed-use development featuring residential, retail and hotel components, intended to spur local economic growth. However, the project faced significant local resistance due to perceived issues with its permitting process, concerns over public access to coastal areas, and the use of land considered historically and culturally significant. The lack of meaningful community engagement resulted in protests and lawsuits, ultimately leading to foreclosure — a cautionary tale for developers who ignore social considerations.

Similarly, Porto Maravilha in Rio de Janeiro was launched as part of preparations for the 2016 Olympics. This ambitious redevelopment aimed to transform Rio’s historic port area with commercial spaces and public parks. However, the project displaced local communities and failed to deliver on promises of affordable housing and job opportunities. The resulting public discontent highlights the risks of overlooking social equity.

In contrast, Essex Crossing on New York’s Lower East Side shows how socially conscious design benefits all stakeholders. It added affordable housing, supported local businesses, and created shared spaces for new and longtime residents. Early community engagement and local hiring fostered a vibrant neighborhood and a lasting asset.

Globally, Fishermans Bend in Melbourne, Australia, demonstrates a similar commitment. Guided by the Green Star rating system — a framework akin to LEED — the redevelopment integrates environmental priorities like energy efficiency with social goals such as accessible housing and community services. This highlights the global expansion of sustainability frameworks addressing both environmental and social needs.

The difference is clear. Projects like Paseo Caribe treated social considerations as secondary, while Essex Crossing and Fishermans Bend embraced them, achieving greater success. Ignoring community perspectives is a risk few developers can afford.

That’s because sustainable development is no longer just about green roofs, solar panels and heat pumps. It’s about creating neighborhoods where communities grow, thrive and connect. Emerging standards like LEED’s social equity guidelines deepen our impact, leaving a legacy of environmental responsibility and respect for the people and cultures that define each community.

By embracing social equity, developers can redefine sustainability, serving the whole community while benefiting the bottom line. As frameworks like LEED’s new social checklist become industry norms, real estate is pivoting toward principles that respond to the challenges of people and nature. Real estate has always been about more than profit — it’s about envisioning livable spaces that meet long-term needs.

Suhail Y. Tayeb is a clinical assistant professor at New York University’s Schack Institute of Real Estate. Amy Myers Jaffe is director of the Energy, Climate Justice and Sustainability Lab at NYU’s School of Professional Studies.