Startup Brings Public Real Estate to Life with Data
The 1980s brought a wave of privatization upon government. Yet today we find that it missed a vital asset—real property.
In fact, the public sector has since expanded its holdings in troubled private property and assets damaged by natural disaster. City government and local agencies in particular own an immense amount of land and buildings. A surprisingly large amount of that portfolio is unaccounted for or underutilized. The Economist reckons that Western nations are sitting on $9 trillion in saleable state-owned property. These parcels act as a vast weight on cities already suffering from a shortage of privately-owned space.
That’s where OpportunitySpace comes in. Founded as the result of a Kennedy School Master’s thesis, the Boston-based startup maps, markets, and manages state and local government-owned real estate. Property listings are placed online together with specifics on zoning, planning, financial incentives, and the like. Developers, neighbors, and place-makers then have a chance to buy. The company’s mission is to make government a more user-friendly development partner, and enable public, private, and civic sectors to work together to convert these liabilities into assets.
OpportunitySpace began with a pilot project in five municipalities, including Louisville, Kentucky, and Providence, Rhode Island, and has since begun expanding into 15 new markets. Louisville offers perhaps the best example of what it looks like to jumpstart a city’s idling properties, as The New York Times describes:
Louisville is using OpportunitySpace to showcase an old, vacant armory downtown that is ripe for redevelopment. “Our aim was to raise the visibility of that armory before some savvy developer that was clearly pro-forma-driven grabbed it up and pursued whatever vision that they had,” Mr. Kapur said. “There has been a lot of community engagement and discussion around this property.”
The database also supported a Louisville-sponsored contest seeking suggestions for creative uses for publicly owned vacant lots. Louis Johnson, an urban designer, worked with a winning team that he said used OpportunitySpace to pinpoint lots in a postindustrial neighborhood they knew to be experiencing a resurgence. In partnership with a nonprofit group, Anchal, Mr. Johnson is building a demonstration garden to introduce people to plants that can be used to make natural dyes.
At the time of writing, there were 8,670 property listings on OpportunitySpace for Louisville alone. They include the old U.S. Marine Hospital, a 6,000 seat arena that once hosted Martin Luther King, Jr., and countless parcels of empty land. Compare that to the three properties on Boston’s page (two of which are underpasses), and you see how much further cities have to go in unlocking their real estate portfolios.
Importantly, OpportunitySpace lists both property the public sector is actively selling as well as all government holdings in an area to enable government entities to spot where to gain efficiencies in their portfolio and to field unsolicited proposals for sites.
The beauty of what this startup is doing is that it offers a win-win-win scenario. Government gets a handle on its assets and potentially new revenue streams from property taxes and property sales, for instance. The private sector gains access to a new market. And society benefits from increased accountability and the removal of deadweight assets. Absent the marketplace, wasted property is wasted opportunity.
What OpportunitySpace is doing may sound familiar. Companies like Uber and AirBnB thrive on bringing idle assets to life by using data and technology to efficiently match sellers with buyers. OpportunitySpace recognizes that dormant property assets hide in the corners of state and local inventories, and that they can be put to productive use simply with a better application of data-driven tools. Urban areas tend to have a critical mass of these assets, and they can be used as catalytic sites to promote density or even enable creative greenspaces and art.
Incredibly, and despite public land being the largest source of our public wealth, very little data exists on the amount of underutilized property in the United States. Even less is known on how much is owned by which part of the public sector. These are spaces that should be filled and reanimated by a local community. But to do so this market must first be unlocked. This is the value of OpportunitySpace.