elana panaritis

© Elena Panaritis 2330 Massachusetts Avenue, NW, Washington DC, 20008

[email protected]; [email protected]

The Role of Property Rights in Green Investments on Real Property and Land

Elena PanaritisTBLI CONFERENCE EUROPE 2011

10-11 November 2011 – Grange St. Paul’s Hotel London, United Kingdom



Who and What

The job of a SE is to recognize when a part of society isstuck and provide new ways to get it unstuck

Invents new sustainable solutions to change the system Spreads the solution Persuades entire societies to take new leaps!!!



Who and What

Institutional economist and social entrepreneur

Transforming illiquid / informal / unreal to liquid property

Pioneered it in Peru

Applied methodology with

Panel Group LLC PG Thought for Action Authored Prosperity Unbound: Building Property

Markets with Trust



The World in Perspective

The world in illiquid / informal property

US $9 trillion of US $9 trillion of

informal /illiquid property informal /illiquid property

Over 4 billion people Over 4 billion people affectedaffected



No Boundaries…

The phenomenon does not recognize geographical boundaries …

Traditional Economists take property rights for granted Frictionless market with minimal transactions costs Downplay institutions and property rights Markets function with reliable and enforceable RIGHTS



Distressed Markets & Property Rights

Illiquid Real Estate is an outcome of a

Broken Property Rights System



Illiquid property varies Illiquid property varies

from from fully fully informal to informal to semi-informalsemi-informal



Broken property rights system

The extremes

Fully Informal:

Inaccessible

Formal:

No RiskSemi Informal:

High risk



Environmental Impacts

…because of a broken property rights system

Environmental distortions

SYSTEMATIC EROSION OF CITIES AND RURAL AREAS

▪ Urban sprawl ▪ Land quality degradation ▪ Ineffective waste management▪ Increased carbon footprint



Economic Impacts …because of a broken property rights

system

Economic distortions

FRAGILE UNDERLYING ASSET

▪ distorted valuations UP and DOWN ▪ distressed property markets▪ illiquidity of savings▪ limited labor mobility▪ weak capital markets▪ limited/ investment in infrastructure;

▪ e.g. telecom / utilities / energy / building improvement ...



Impacts of a broken property rights system

Social distortions

ENDURING INEQUALITY – POVERTY – SOCIAL DISORDER

▪ growing violence – corruption – criminality▪ child labor increase▪ weak middle class▪ reduction of women’s (minority’s) participation in the wealth

pool and political voice▪ serious social discontent – weak political participation



Solution: Transformationto tap on the socio-economic aspects

Successful Transformation requires Vision, Rigor, Trust

Understand the asset

Diagnose with Reality Check Analysis - Untangle

Align the interests of all key policy and market players – build partnerships



A Patchwork



Reality Check Analysis

Identify & Isolate the problem

Check institutions’ evolution throughout time

Diagnose / Design Solutions



Align InterestsKEY: TRUST

Establish Trust through partnerships Align the interests of key policy and market players:

Private Capital

Government Citizens

Trust



Success Stories: Margarita in Peru

Margarita: seamstress worth ~ $80/month in 1990today she is worth ~Thousands

Peru 1990: Hyperinflation, lawlessness, joblessness … and over 70% unreal estate

Staggering break-through results … $60M investment gave a 200-multiple return 12 agencies turned into 2 $7,000 to $14 7 years to 2 days No more intermediaries



Success Stories: Peru Continued

Rapid increase in secure liquid property ownership ▪ With over 6 million beneficiaries

-

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1992 1995 2001 2002

Years

Peo

ple

New formal owners

“the big jump”



Peru: Positive socio-economic impacts of secure property rights issued by the

program

Reduced

levels of..

Increased

levels of..

Security

Property value

Investment

Probability of child labor

Women’s involvement

Labor mobility

Cottage industry-60%

-40%

-20%

0%

20%

40%

60%

80%

100%

120%

Percent Change

Factors affected by securing property rights



Success Stories: Deborah in the US

Deborah in Washington DC:

was worth a welfare check….

mobilized the transformation of unreal to real estate in her neighborhood





14



Less Successful Stories

Ismini: Fights in the Greek courts to prove ownership of family property owner since 1880s….

Albania / Bulgaria / Romania: costs to clean up possible claims can reach 50% of the transaction itself. Uncontrollable urban sprawl and environmental degradation



How can we keep on having success stories

Build Triple Bottom Line businesses

Partner with players that are willing / share the vision

Use Reality Check Analysis

Get involved…!!!!



www.prosperityunbound.com/blogFacebook: ProsperityUnbound group

Twitter: Elena_Panaritis

Elena PanaritisFounder and Director Panel Group LLL

[email protected]@prosperityunbound.com

http://www.prosperityunbound.com/blog

mailto:[email protected]

elana panaritis

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