Pricing office rents in Sydney CBD: testing the water on automated rent reviews

PurposeAutomated valuation models (AVMs) are statistical asset pricing models omnipresent in residential real estate markets, where they inform property tax assessment, mortgage underwriting and marketing. Use of these asset pricing models outside of residential real estate is rare. The purpose of the paper is to explore key characteristics of commercial office lease contracts and test an application in estimating office market rental prices using an AVM.Design/methodology/approachThe authors apply a semi-log ordinary least squares hedonic regression approach to estimate either contract rent or the total costs of occupancy (TOC) (“grossed up” rent). Furthermore, the authors adopt a training/test split in the observed leasing data to evaluate the accuracy of using these pricing models for prediction. In the study, 80% of the samples are randomly selected to train the AVM and 20% was held back to test accuracy out of sample. A naive prediction model is used to establish accuracy prediction benchmarks for the AVM using the out-of-sample test data. To evaluate the performance of the AVM, the authors use a Monte Carlo simulation to run the selection process 100 times and calculate the test dataset's mean error (ME), mean absolute error (MAE), mean absolute percentage error (MAPE), median absolute percentage error (MdAPE), coefficient of dispersion (COD) and the training model's r-squared statistic (R2) for each run.FindingsUsing a sample of office lease transactions in Sydney CBD (Central Business District), Australia, the authors demonstrate accuracy statistics that are comparable to those used in residential valuation and outperform a naive model.Originality/valueAVMs in an office leasing context have significant implications for practice. First, an AVM can act as an impartial arbiter in market rent review disputes. Second, the technology may enable frequent market rent reviews as a lease negotiation strategy that allows tenants and property owners to share market risk by limiting concerns over high costs and adversarial litigation that can emerge in a market rent review dispute.

Active design of built environments for increasing levels of physical activity in adults: the ENABLE London natural experiment study

Background Low physical activity is widespread and poses a serious public health challenge both globally and in the UK. The need to increase population levels of physical activity is recognised in current health policy recommendations. There is considerable interest in whether or not the built environment influences health behaviours, particularly physical activity levels, but longitudinal evidence is limited. Objectives The effect of moving into East Village (the former London 2012 Olympic and Paralympic Games Athletes’ Village, repurposed on active design principles) on the levels of physical activity and adiposity, as well as other health-related and well-being outcomes among adults, was examined. Design The Examining Neighbourhood Activities in Built Environments in London (ENABLE London) study was a longitudinal cohort study based on a natural experiment. Setting East Village, London, UK. Participants A cohort of 1278 adults (aged ≥ 16 years) and 219 children seeking to move into social, intermediate and market-rent East Village accommodation were recruited in 2013–15 and followed up after 2 years. Intervention The East Village neighbourhood, the former London 2012 Olympic and Paralympic Games Athletes’ Village, is a purpose-built, mixed-use residential development specifically designed to encourage healthy active living by improving walkability and access to public transport. Main outcome measure Change in objectively measured daily steps from baseline to follow-up. Methods Change in environmental exposures associated with physical activity was assessed using Geographic Information System-derived measures. Individual objective measures of physical activity using accelerometry, body mass index and bioelectrical impedance (per cent of fat mass) were obtained, as were perceptions of change in crime and quality of the built environment. We examined changes in levels of physical activity and adiposity using multilevel models adjusting for sex, age group, ethnic group, housing sector (fixed effects) and baseline household (random effect), comparing the change in those who moved to East Village (intervention group) with the change in those who did not move to East Village (control group). Effects of housing sector (i.e. social, intermediate/affordable, market-rent) as an effect modifier were also examined. Qualitative work was carried out to provide contextual information about the perceived effects of moving to East Village. Results A total of 877 adults (69%) were followed up after 2 years (mean 24 months, range 19–34 months, postponed from 1 year owing to the delayed opening of East Village), of whom 50% had moved to East Village; insufficient numbers of children moved to East Village to be considered further. In adults, moving to East Village was associated with only a small, non-significant, increase in mean daily steps (154 steps, 95% confidence interval –231 to 539 steps), more so in the intermediate sector (433 steps, 95% confidence interval –175 to 1042 steps) than in the social and market-rent sectors (although differences between housing sectors were not statistically significant), despite sizeable improvements in walkability, access to public transport and neighbourhood perceptions of crime and quality of the built environment. There were no appreciable effects on time spent in moderate to vigorous physical activity or sedentary time, body mass index or percentage fat mass, either overall or by housing sector. Qualitative findings indicated that, although participants enjoyed their new homes, certain design features might actually serve to reduce levels of activity. Conclusions Despite strong evidence of large positive changes in neighbourhood perceptions and walkability, there was only weak evidence that moving to East Village was associated with increased physical activity. There was no evidence of an effect on markers of adiposity. Hence, improving the physical activity environment on its own may not be sufficient to increase population physical activity or other health behaviours. Funding This project was funded by the National Institute for Health Research (NIHR) Public Health Research programme and will be published in full in Public Health Research; Vol. 8, No. 12. See the NIHR Journals Library website for further project information. This research was also supported by project grants from the Medical Research Council National Prevention Research Initiative (MR/J000345/1).

Rent dynamics in France between 1970 and 2013

Purpose The purpose of this study is to highlight the determinants of market rents and to build a hedonic market rent index for each urban area and rental sector in France for the period 1970–2013. The authors also analyse the market rent dynamics over this period, with a special attention to the turning points in the French housing policy. Design/methodology/approach For this purpose, the authors implement a hedonic model, called stratified time dummy variable, using the Box–Cox transformation as a functional form. Findings The contribution of this study to the housing research is threefold: First, the study improves our understanding of the French’s rental submarket specificities and their valuation. It sheds new light on the determinants of rents. Second, this study builds a hedonic market rent index over the period 1970–2013 for each geographical and sectoral segment (Paris urban area, urban areas of more and less than 100,000 inhabitants and private and public rental sectors). Third, this study explains rent dynamics focusing on the turning points in the French housing policy. Originality/value Finally, the authors provide the first long-term market rent index in France by submarket (geographical and sectoral). In the case of the French market, no long-term market rent exists. The only long series available is an indexed rent.

Evaluating the Effects of a Rent Subsidy and Mentoring Intervention for Youth Transitioning Out of Homelessness: Protocol for a Mixed Methods, Community-Based Pilot Randomized Controlled Trial

Background Although the risk factors associated with young people entering and becoming entrenched in street life have been thoroughly investigated, peer-reviewed evidence is scarce to nonexistent for rigorous interventions targeting social integration outcomes for young people who have experienced homelessness. From the limited research that has been done, emerging evidence signals that, although structural supports such as subsidized housing and social service providers are important, these resources alone are insufficient to help young people integrate into the mainstream society. Objective The overarching aim of this study is to assess whether and how rent subsidies and mentorship influence social integration outcomes for formerly homeless young people living in market rent housing in 3 Canadian cities. The primary outcome measures for this study are community integration (psychological and physical) and self-esteem at 18 months. Secondary outcomes include social connectedness, hope, and academic and vocational participation at 18 months. Exploratory outcomes include income, perceived housing quality, engulfment, psychiatric symptoms, and participant perspectives of intervention barriers and facilitators. Methods This is a convergent mixed methods, open-label, 2-arm parallel randomized controlled trial (RCT) with 1:1 allocation embedded within a community-based participatory action research (CBPAR) framework. The intervention will provide 24 young people (aged 16-26 years), who have transitioned out of homelessness and into market rent housing within the past year, with rent subsidies for 24 months. Half of the young people will also be randomly assigned an adult mentor who has been recruited and screened by 1 of our 3 community partners. Data collection will occur every 6 months, and participants will be followed for 30 months. Results Ethical approval for this study has been obtained from the Providence, St Joseph’s, and St Michael’s Healthcare Research Ethics Board (number 18-251). Enrollment took place from April 2019 to September 2019. Preliminary analysis of the baseline quantitative and qualitative data is underway. Conclusions This pilot RCT will be the first to test the impact of economic and social support on meaningful social integration for formerly homeless young people living in market rent housing. We believe that the mixed methods design will illuminate important contextual factors that must be considered if the intervention is to be scaled up and replicated elsewhere. Importantly, the CBPAR framework will incorporate the perspectives of the community, including formerly homeless young people, who are in the best position to determine what might work best in the context of their lives. Trial Registration Clinicaltrials.gov NCT03779204; https://clinicaltrials.gov/ct2/show/NCT03779204. International Registered Report Identifier (IRRID) DERR1-10.2196/15557

Evaluating the Effects of a Rent Subsidy and Mentoring Intervention for Youth Transitioning Out of Homelessness: Protocol for a Mixed Methods, Community-Based Pilot Randomized Controlled Trial (Preprint)

BACKGROUND Although the risk factors associated with young people entering and becoming entrenched in street life have been thoroughly investigated, peer-reviewed evidence is scarce to nonexistent for rigorous interventions targeting social integration outcomes for young people who have experienced homelessness. From the limited research that has been done, emerging evidence signals that, although structural supports such as subsidized housing and social service providers are important, these resources alone are insufficient to help young people integrate into the mainstream society. OBJECTIVE The overarching aim of this study is to assess whether and how rent subsidies and mentorship influence social integration outcomes for formerly homeless young people living in market rent housing in 3 Canadian cities. The primary outcome measures for this study are community integration (psychological and physical) and self-esteem at 18 months. Secondary outcomes include social connectedness, hope, and academic and vocational participation at 18 months. Exploratory outcomes include income, perceived housing quality, engulfment, psychiatric symptoms, and participant perspectives of intervention barriers and facilitators. METHODS This is a convergent mixed methods, open-label, 2-arm parallel randomized controlled trial (RCT) with 1:1 allocation embedded within a community-based participatory action research (CBPAR) framework. The intervention will provide 24 young people (aged 16-26 years), who have transitioned out of homelessness and into market rent housing within the past year, with rent subsidies for 24 months. Half of the young people will also be randomly assigned an adult mentor who has been recruited and screened by 1 of our 3 community partners. Data collection will occur every 6 months, and participants will be followed for 30 months. RESULTS Ethical approval for this study has been obtained from the Providence, St Joseph’s, and St Michael’s Healthcare Research Ethics Board (number 18-251). Enrollment took place from April 2019 to September 2019. Preliminary analysis of the baseline quantitative and qualitative data is underway. CONCLUSIONS This pilot RCT will be the first to test the impact of economic and social support on meaningful social integration for formerly homeless young people living in market rent housing. We believe that the mixed methods design will illuminate important contextual factors that must be considered if the intervention is to be scaled up and replicated elsewhere. Importantly, the CBPAR framework will incorporate the perspectives of the community, including formerly homeless young people, who are in the best position to determine what might work best in the context of their lives. CLINICALTRIAL Clinicaltrials.gov NCT03779204; https://clinicaltrials.gov/ct2/show/NCT03779204.