December 2022

Nicholas,

If we’ve learned anything these past few years, it’s that we need to be intentional about protecting and caring for our minds and bodies. That’s true for ourselves and our families, and it’s true for the people who live in the properties our industry owns and operates.

So much so that we made physical and mental health one of the Multifamily Impact Council’s seven key principles. And I’m thrilled to count two highly respected and trusted health and wellness organizations among the Council’s members: Fitwel and the International WELL Building Institute (IWBI).

You’ll find interviews with leaders of both organizations below.

Kelly Worden, VP of ESG and Investing for Health, and Dr. Renee Christensen, Director, Standard Development, Mind Concept Lead, speak about IWBI’s WELL Standard, performance ratings, and how IWBI supports the multifamily industry. And Joanna Frank, CEO of the Center for Active Design and Fitwel, discusses their data-driven approach and COVID-19’s impact on multifamily real estate.

As our final newsletter of 2022, I also want to thank you for being here. I’m grateful and humbled that you have joined us on this journey, and I’m excited to work with you as we build multifamily impact investing’s future. We’ve only just begun. In the new year, we’ll unveil our Impact Framework, host more illuminating Multifamily Impact Collaborative calls, launch an online resource center, and more.

You won’t miss a thing by staying subscribed to this newsletter and following us on LinkedIn. It’s been a fantastic year. And I’m confident 2023 is going to be bigger and better.

Happy Holidays,

Bob Simpson

President, Multifamily Impact Council

Multifamily Impact Collaborative call with FHFA Director Sandra L. Thompson at 11 a.m. Eastern time on Jan. 12, 2023.

Q&A with Kelly Worden and Dr. Renee Christensen from the International WELL Building Institute

Kelly Worden, MPH, is VP of ESG and Investing for Health at the International WELL Building Institute (IWBI). Kelly leads development of resources to help organizations place people at the center of their ESG (environmental, social, governance) strategy and investment.

Kelly's spent her career working upstream to promote population health and social equity. Prior to joining IWBI, Kelly co-directed the Green Health Partnership, an applied research initiative of the University of Virginia School of Medicine and the U.S. Green Building Council with funding from the Robert Wood Johnson Foundation. Kelly also has experience working in global health advocacy at the World Heart Federation in Geneva, Switzerland.

Kelly holds a Master of Public Health from George Washington University and a B.S. in Human Biology from the University of Texas in Austin.

Dr. Renee Christensen has spent more than a decade studying the importance of psychosocial processes and how temporal and spatial factors link the built environment to physical and mental health outcomes. Her previous projects linked crowding, lack of privacy, institutional-oriented spatial organization, policies, practices and stigmatization within the community to adverse mental health outcomes and identity formation. She currently serves as Director and Mind Concept Lead at IWBI where she oversees the development of all Mind related activities.

Dr. Christensen has presented her research at international conferences such as Environmental Research Design Association and Academy of Neuroscience for Architecture. She leveraged her knowledge in long-term care facility design during her previous position as a senior research fellow at National University of Singapore, School of Design and Environment where she worked with internationally renowned experts in the field of environmental gerontology.

Dr. Christensen holds a Doctor of Philosophy and a master’s degree in architectural studies from University of Missouri, Columbia, Mo., a master’s degree in education and a bachelor’s degree in psychology from Drury University, Springfield, Mo.

What is the International WELL Building Institute?

Kelly Worden:

IWBI is a public benefit corporation that's focused on promoting a culture of health through the way that places and organizations are built and maintained. We have the WELL Standard, which really drives that focus on best practices through both real estate and organizational leadership. Andwe are able to organize our broader global community through the WELL AP credential, which is focused on equipping individual professionals to deliver the WELL Standard.

Today, WELL is being used in 125 countries, by more than 100 of the Fortune 500 and across more than 4.5 billion square feet of space.

Can you tell us a little more about the WELL Standard?

Worden:

The WELL Standard has really grown over the past couple of years and evolved quite a bit since its initial launch. The focus of it remains the same, creating places for people to thrive and applying it to spaces of all types. But with the launch of WELL v2™ and then, more recently, the launch of various WELL ratings and the WELL at scale program, we've made the program much more accessible and flexible.

Dr. Renee Christensen:

The WELL standard is divided into 10 different concepts, which address various environmental issues. It has Air, Water, Light, Nourishment, Community, Movement, Thermal Comfort, Sound, Materials–and, in my case, Mind–aimed at incorporating building and design elements and policies and programs to enhance human health.

Worden:

Ratings represent themed subsets of features from the broader WELL standard, allowing organizations to focus on relevant strategies as an entry point to the WELL Ecosystem. The WELL Health-Safety Rating, IWBI’s first rating, launched in response to the COVID pandemic and includes a number of evergreen strategies around emergency response and resilience that remain relevant and popular in the market. And it helps organizations maintain that focus on promoting health and well-being and fortifying them during times of disaster.

There's also the WELL Performance Rating, which is a collection of the best evidence-backed strategies around understanding indoor environmental quality, air quality, thermal comfort, etc.

And then we just recently launched the WELL Equity Rating, which is focused on promoting diversity, equity, and inclusion in organizational management and practice.

How did the pandemic impact IWBI's work?

Christensen:

I think one of the things that really brought people back into the workplace was their confidence that when they went back, there would be measures in place that would promote healthy workplaces. These could those to help decrease transmission of the virus, such as increasing outdoor air circulation, and increased cleaning practices.

Worden:

I think a big aspect of that, too, is communicating, being transparent about what those practices and policies are, and communicating those clearly to the people that are interacting with a space. So much of the anxiety during the pandemic was our fear of the unknown.

What groups like ours are able to do is provide a level of transparency and a mechanism for real estate companies to demonstrate accountability to the high, lofty goals that they're saying externally. But then also being able to follow up by actually demonstrating and sharing the science-based strategies they are deploying in those spaces to promote a healthy environment.

In response to the COVID-19 pandemic, the International WELL Building Institute (IWBI) also initiated a Task Force on COVID-19 and Other Respiratory Infections, bringing together nearly 600 leading medical and public health practitioners, business and real estate professionals, building scientists, sustainability experts and members of academia.

IWBI issued a special report, Prevention and Preparedness, Resilience and Recovery, which was at culminating resource that showcased strategies from WELL and expertise from IWBI staff and Task Force members. The WELL Health-Safety Rating is one of the earliest outcomes of IWBI’s Task Force on COVID-19, providing a centralized source and governing body to validate efforts made by owners and operators.

When do multifamily owners/operators engage with WELL? Is it during the design-build phase?

Worden:

We spend 90% of our time indoors–a majority of that in our homes–so how they function matters. The WELL Standard, and when you’re pursuing WELL certification, encompasses both design, construction, and also operations. That’s the difference from your traditional green building rating systems. In practice, that means that lots of different decision makers throughout the real estate delivery process are engaging with the WELL Standard to apply various features, whether they be design, construction, or at the operations stage.

That said, the WELL at scale program, which we rolled out in earnest earlier this year, allows organizations to engage with WELL throughout their real estate portfolio and really prioritize action throughout their portfolio, making incremental progress toward some of those milestones, whether it be a WELL rating or a WELL certification.

Christensen:

And the process includes a variety of stakeholders. When we look at multifamily residential, we want to include a lot of the stakeholders in the design process through something like a design charrette.

What examples can you share showing the impact IWBI is having in multifamily real estate?

Worden:

IWBI recently worked with Enterprise Green Communities to inform the development of the Enterprise 2020 Green Communities Criteria. Understanding the long history Enterprise has within the affordable housing market, and in particular, the number of funding streams that require Enterprise Green Communities’ criteria, IWBI worked with them to increase the focus on health within Enterprise Green Communities. By integrating WELL features into the 2020 Green Communities Criteria, Enterprise and IWBI have provided affordable housing developers with a flexible roadmap for achieving higher levels of health and well-being benefits that are rooted in the latest scientific evidence and best practices. As a result, projects utilizing the Enterprise 2020 Criteria will also achieve WELL certification.

There are a few case studies that have come out since that launch that demonstrate the ability to promote health alongside environmental and green features within the affordable housing setting. This resulted in the first affordable housing development in the country to receive joint certification from Enterprise Green Communities and WELL, demonstrating leadership across health and well-being,energy and water efficiency and other important environmental categories.

Christensen

The project at Thessalonica Court, which Kelly mentioned, incorporated windows to let in daylight, a gym the residents could use, a co-working space, and exposure to biophilic elements. I think that was almost like a proof of concept where they were able to really make impactful design decisions to support mental health.Additional projects include Essex on the Park in Chicago, as well as HALL Art Residences in Texas.

Aside from the partnership with Enterprise Green Communities, multifamily projects can use the full suite of WELL ratings and certification. For example, Lendlease’s Ardor Gardens senior living facilities achieved the WELL Health-Safety Rating across its portfolio in Shanghai in 2022: over 85,000 square meters of space across 20 buildings with 800 apartments.

Worden:

Christensen:

What are some things you’d like multifamily owners/operators to consider with their properties?

Worden:

We have a greater understanding now of how buildings impact our health, and especially when it comes to residential spaces. We’ve spent an increasing amount of time at home; that's certainly been true throughout the pandemic. If you think about more vulnerable groups, such as children or older residents, it really matters that we actually take an intentional approach to how we're building and designing these places.

I think one of the most important things to incorporate is a focus on the specific context of any given project and the specific populations impacted by that project, especially within the residential space and affordable housing projects. We have the integrative design feature within WELL, making sure to incorporate a stakeholder charrette. And really be specific about the unique needs of the population impacted by a project and then being intentional about prioritizing strategies in order to meet those needs.

That approach is built into the way we're rolling out the WELL at scale program. When new companies sign on to WELL at scale, the first thing they do is go through a goals module to be clear about their goals.

What I've seen through my time working within the real estate industry is that being explicit about those goals is really important because there are so many different decision makers involved throughout the entire process. If you're not explicit about what the goals of a given strategy are, it becomes easier for those to fall off the plan during the value engineering process or not be properly communicated to the contractor.

What are some ways to think about mental health in building design and operation?

Christensen:

Including mother nature in place. Focus on designing environments which expose occupants to natural elements. It can be views to the outside or natural landscapes, but also the materials you use inside the buildings that can promote biophilia. Whether it's natural wood flooring, natural coloring on the walls or the floor coverings, or other elements like that.

Especially in urban environments, we really need to pay more attention to allowing people to interact with natural elements. For example, Thessalonica Court is located near a park that the residents can walk to. So, it's a little bit about site location, but also things such as natural elements that you can bring inside of the building. Greenery in plants and the building materials you use can go a long way in enhancing the environment–greenery and biophilia in offices improves mental and physical health and productivity, while increasing rent premiums. More biophilia, based on high Green View Index scores, creates a 5.6% to 7.8% rent premium for offices in New York City compared to those with very low scores.

Q&A with Joanna Frank from the Center for Active Design

Joanna Frank is a real estate entrepreneur who oversees the global expansion of Fitwel, the leading people-centric healthy building certification platform. She is the founding President and CEO of Active Design Advisors, Inc. (Adai), and nonprofit research organization, Center for Active Design (CfAD), the operators of Fitwel. Originally created by the CDC, Fitwel translates global public health evidence into practical, implementable design and operational strategies to optimize the built environment.

Prior to launching CfAD, Joanna spearheaded data-driven, health-based real estate initiatives under the Bloomberg administration, including NYC’s FRESH Program and the Active Design Initiative. She started her career in real estate development as a partner at Bright City Development, LLC, where she led sustainable mixed-use residential projects.

She serves on the editorial board of Propmodo and is a member of the Urban Land Institute's Affordable/Workforce Housing Council and Fannie Mae's Multifamily Housing Taskforce. In 2022, she was featured on the Commercial Observer Power 100 list and was named one of GlobeSt’s Women of Influence and one of real estate’s Women of Influence by PERE.

What is the Center for Active Design?

The Center for Active Design (CfAD) is a nonprofit organization that launched in 2012 at the end of the Bloomberg administration to expand New York City’s Active Design program. The thesis behind it is that you can translate data and health research into practical and implementable design and operational strategies at all scales of the built environment.

In New York City, we used it to inform how the streetscapes were redesigned, and how money was invested in a much more people-centric, quality-of-life focused approach. Then we launched to continue that work across the U.S. with the private sector. And that's what we've been doing ever since.

In essence, the question is: How do you translate data and research from the field of public health into all facets of the real estate industry? Whether you're an architect, designer, operator, manager, facility manager, or real estate investor, all of your decision-making can be supported by evidence to help you create environments that are focused on people.

Can you tell us a little bit about Fitwel?

Fitwel is a people-centric healthy building certification system. The Center for Active Design was awarded the license to operate Fitwel in 2017 given our track record and expertise in health-promoting design and operational practices. Fitwel was originally created by the Centers for Disease Control and Prevention and the General Services Administration to review and analyze the global evidence base that looks specifically at how the built environment impacts people's health.

Essentially, Fitwel defines the attributes of a healthy building and community. We have scorecards that specify health-promoting strategies for different asset classes, including multifamily, commercial, and industrial – both at the asset level and at scale.

Fitwel is run by Active Design Advisors (Adai) and CfAD. CfAD is responsible for maintaining the evidence base and standards of the certification process. Adai is a proptech company that owns the technology, platform and data. Adai does all of the business side of running a global certification. We are in over 40 countries at this point.

Has the business always been this data driven?

We started off understanding the power of having a body of data to inform market transformation, which has been our ambition from the start.

The way you'll bring about market transformation isn't by issuing solely asset-level certification, it's really about collectively looking at and turning the data into insights. In other words, the focus is on how you can use the data about the physical and operational attributes of properties and then correlate that dataset against value KPIs, including tenant satisfaction, net promoter score, lease up rates, tenant stability, etc.

That's where the magic starts to happen, because then you can start to see insights like, "This subset of strategies is most strongly correlated with net promoter score. And we already know, as an industry, that net promoter score directly correlates to value." It's going to be different for every portfolio, for different populations, as it should be. There is no one-size-fits-all when it comes to the strategies that define a single health building. When we say “What is a healthy building?”, it is a process.

"Becoming a healthy building is a process. It begins with an assessment of the needs of the occupants, as this will determine which evidence-based strategies you use in order to meet those needs. Then you implement those strategies and measure those results. And continue to use that feedback loop."

We recently worked with QuadReal Property Group, a Canadian pension plan, which has a large multifamily portfolio. They benchmarked all of their multifamily assets against Fitwel. We were then able to use that dataset and overlay it with the data they have from tenant satisfaction surveys, which were done independent of us. We analyzed the correlations between operational strategies, design strategies, etc., and different outcomes as far as net promoter score value, asset value, etc. The result of this was our recent report, Health Drives Value in Real Estate, which found the positive outcome that health and wellbeing strategies have on tenant satisfaction and financial outcomes.

Those are the types of insights we can give the industry as a whole and, for specific portfolios. Of course, there may be some nuances depending on the portfolio.

How did the pandemic impact your business?

We had to create an entirely new certification in response to the pandemic. Fitwel addresses health as an interconnected system. As a standard and as a philosophy, we're looking at all aspects of public health, so looking at chronic disease prevention, holistically looking at mental health, and then the social health piece. And we have more than 5,600 peer-reviewed research articles that have been analyzed behind Fitwel that are translated into practical, implementable strategies.

But when you’re looking at an infectious disease, that is a very specific part of health. The evidence base is a subset of what we're looking at.

We worked with experts at the CDC and around the world, including leaders in the field and academic institutions, behavioral experts, and mental health experts, because it was clear from the start of COVID that this would be both a physical and a mental health crisis.

With their advice, we created a new module that focuses on mitigating infectious respiratory disease and mental health consequences of a heightened state of emergency. We call that the Viral Response Module.

According to a survey from the Kaiser Family Foundation, about a third of adults under thirty describe their mental health as "only fair" or "poor." And we know that the pandemic has exacerbated the mental health crises.

The pandemic has been a game changer for the multifamily sector. Employees and tenants were already putting pressure on the commercial sector to create healthy environments prior to the pandemic. Individuals in the workplace were already demanding a healthy work environment. It was unmistakably a matter of tenant or staff retention and attraction.

But there really wasn't demand from individuals for healthy homes before the pandemic. The demand multifamily was feeling was really coming from investors pre-pandemic, because investors were focused on ESG performance.

That has completely changed. People are now well aware that where they live, the design of where they live, the location of where they live, and the maintenance operation of that building all have an impact on their health. That connection has been made. One of the investors we work with said you can't unsee the last few years.

Individual resident demand is there. Multifamily is our fastest growing asset class, with a 122% increase in multifamily users over the last year. We recently took on investors and our investor's limited partners are all multifamily owners. They're not going to invest in us unless their partners are saying to go out and find a solution for health. So, yes, multifamily is a very exciting space.

Do you expect the trend of multifamily owners/operators focusing on health to continue?

I would say for the next three years, yes. Because multifamily is starting from a much lower point. In terms of the ESG conversation, multifamily is also not as developed as commercial.I think there’s progress and an adoption happening at the ESG level, as well as demand coming from tenants at an individual level. You’ve got that market pressure coming from both sides.

Much of the value of multifamily is determined by the perceptions of what people value. Why is location so fundamental in the value of a property? It’s because we as a society have a certain set of attributes around location that we value.

We’ve moved into this age of awareness around health that’s not going away any time soon.

Industry News and Updates

Have news to share? Send your links to nick_barron@multifamilyimpactcouncil.org and we'll do our best to spread the word in this newsletter and on our LinkedIn page.

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