Center For Real Estate

The Center for Real Estate (CRE) was founded in 1984. The mission of the center is to improve the quality of the built environment, improve the quality of the real estate industry, and serve the Institute as a resource and focal point for real estate-related academic activity. To this end, it carries out teaching and research programs in the field of real estate development, investment, and management. It also provides a forum for the exchange of information and the discussion of issues by real estate professionals from around the world. The center's principal activities include an 11-month professional degree program leading to a Master of Science in Real Estate Development (MSRED) and a research agenda of issues relating to the planning, development, and management of real estate, including its financial performance.


Twenty-six members of the Class of 2002, the 18th class of MSRED graduates, received their SM degrees in real estate development in September 2002. Two other members of the class will receive degrees upon completion of their academic requirements. The 35 members of the incoming Class of 2004, which includes 6 joint degree candidates, were selected in April from an applicant pool that was both strong and 20 percent larger than last year's. The new class of 9 women and 26 men includes 8 international students. Six incoming students already hold advanced degrees—in architecture, landscape architecture, city planning, civil engineering, architectural engineering, and business administration.

The center is fully supporting one ongoing PhD candidate jointly in the Departments of Economics and Urban Studies and Planning.

The 31 members of the MSRED Class of 2003 had some revised course options in academic year 2003. David M. Geltner, professor of real estate finance in the Department of Urban Studies and Planning, in his first year at MIT offered 11.431/15.426 Real Estate Finance and Investment I in the fall term, followed by 11.432/15.427 Real Estate Finance and Investment II: Macro-Level Analysis and Advanced Topics in the spring term. Gloria Schuck, lecturer in the Department of Urban Studies and Planning, offered a new elective, 11.945 Leadership in Real Estate. The beginnings of a track system were set up, with certain courses defined as appropriate electives for students who want to concentrate in the development aspects of real estate. A different set of electives was identified for students who want to specialize in real estate finance.

A team of students from MIT—which included Robert Morgan '04, currently also a candidate for a MArch degree—was selected as one of four finalists in a nationwide urban design competition, sponsored by member firm Hines and the Urban Land Institute.


Center faculty membes are engaged in a number of research projects. Professor of Economics William C. Wheaton has been researching the impact of metropolitan government on the operation of local law enforcement agencies and the resulting impact on crime incidence. He finds that with greater jurisdictional fragmentation, there is less expenditure on law enforcement because smaller jurisdictions reap little of the benefit of criminal incarceration. At the same time, smaller jurisdictions appear to be more efficient (per dollar of expenditure) at controlling crime. Professor Wheaton is also working on several papers studying the influence of metropolitan government structure on the performance of real estate markets. In a joint paper with Professor Bengte Evenson (Indiana), he argues that metropolitan areas with numerous small jurisdictions have a greater incentive to set aside land from development, which then drives up the long-run price of housing. Finally, Professor Wheaton has presented a paper at several university seminars that models how an interspersed land use pattern of population and employment generates travel patterns and urban congestion. These turn out to result in housing price gradients that are extremely flat with distance. Henry Pollakowski, visiting scholar in the Department of Urban Studies and Planning, is continuing work on a model projecting state sales tax losses due to internet retail sales. He also completed a follow-up to his study of the effects of rent decontrol in Cambridge and Brookline and a study of who benefits from New York City's rent regulations.

The center hosted visiting scholar Marietta Haffner, a housing analyst at the Delft Institute of Technology in the Netherlands, for spring term this year and continued to host housing economist and editor of the Journal of Housing Economics, Henry Pollakowski, for a seventh year.

Professional Education

The 18th summer of professional development courses brought 222 attendees to campus in June and July of 2002, a substantial decrease from the previous summer's attendance. Attendees enrolled in seven courses, including two new courses, Real Estate Debt, taught by Timothy Riddiough, now professor of real estate finance at the University of Wisconsin at Madison, but recently of MIT, and Negotiation in the New Real Estate Context, taught by Sandra Lambert, lecturer in the Department of Urban Studies and Planning. Both courses were well received, but by a disappointing number of attendees. Professional development courses for the summer of 2003 include the return of Professor Riddiough to teach a two-day course, Current Issues in Real Estate Finance and Investment.


Income from membership declined as the center closed the year with 61 supporting members (including 5 international members). This represents a net gain of 3 from the previous year; however, restructured membership fees enabled members to decrease their previous levels of support and several did so, providing less revenue overall. In addition to annual fees, many members supported the center in nonfinancial ways by providing case study sites, lecturing in class, and supporting student thesis work. For a seventh year, Robert Danziger, retired chairman of member firm Northland Investment, organized and led the well-received Real Deals speaker series.

The center hosted a lively meeting in November for corporate supporters, current students, faculty, and members of the public. The symposium was organized to discuss the reasons and possible solutions to the high housing costs that afflict many parts of the country. The dinner speaker was Rick Davis, president of the Homeownership Alliance, a consortium of organizations interested in home ownership. The following morning, a number of speakers outlined their perspectives, including MIT graduate and economist Denise DiPasquale, Freddie Mac chief economist Richard Green, Harvard professor Edward Glaeser, and the renowned economist from the Brookings Institution, Anthony Downs, who concluded by pointing out the political difficulty of enacting meaningful local regulatory reform where two-thirds of voters are already homeowners whose self-interest is threatened by promoting greater homeownership opportunity in their area.


John T. Riordan continued as chairman of the center this year, with plans to assume the voluntary position of honorary chair in July. The director, Professor of Economics William C. Wheaton, served the last year of his 11-year tenure as director. He will be succeeded by Professor Geltner in July. Associate Director Marion Cunningham continued in her post this year.

The redesign of the center's web site was completed in August 2002. Since then, the new site has attracted more than 40 percent more requests for information than the previous version over a similar period of time. The web remains the primary source of inquiries by the public about the MSRED program, professional development courses, and working papers.

William C. Wheaton
Professor of Economics

More information about the Center for Real Estate can be found on the web at


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