Dynamics of Real Estate Development in China: Theory and Education

PIs: David Geltner (Center for Real Estate, Department of Urban Studies and Planning, MIT)
       Richard de Neufville (Institute for Data, Systems and Society, School of Engineering, MIT)

Abstract

This project extends current research exploring the dynamics of real estate development. It brings new perspective to the issue by using engineering systems and management tools such as systems dynamics simulation (SD).

It focuses on China. Recognizing that its real estate development involves substantial unique forms of governmental intervention, SD provides a more flexible tool to analyze the stock flow of housing than classical microeconomic models. Being intuitive, it also offers pedagogical opportunities.

The project combines academic research and course development. The research models interactions between the supply and use of real estate for urban housing. It explores potential dynamics that lead to unsustainable conditions. It seeks to identify specific factors that promote vicious cycles (bubbles), and thus to explore countermeasures that might promote more sustainable development.

The educational effort implements computer-based ‘games’ to illustrate the range of possible effects (as motivational cautionary tales), and display real estate dynamics graphically. We would use them to explore these dynamics with practicing professionals. We anticipate disseminating results through academic presentations and educational activities in person and through MITx opportunities the STL Lab will develop.

The project team features long-standing US and Chinese collaborators spanning real estate economics, urbanization, and civil engineering.