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Dealing with an Angry Public: The Mutual Gains Approach to Resolving Disputes on a Real Estate Project

Written by Posted On Sunday, 13 August 2017 07:23
Dealing with an Angry Public: The Mutual Gains Approach to Resolving Disputes on a Real Estate Project Image Credit: The New York Times

Why will a real estate developer skip the preparation of an EIA and SIA?

There are several reasons why a real estate developer will want to skip preparing the environmental impact assessment and the social impact assessment for a particular real estate development. The usage of the impact assessment tools is considered by some real estate developers to be a never ending process because of the duration it takes. Some real estate developers fear that the preparation of the environmental impact assessment and the social impact assessment will cause a lag in the schedule for the project. Developers want to complete projects on time so that they can meet the projected demand for the property. The preparation of an environmental impact assessment and the social impact assessment is viewed by many developers as a distraction that will waste their time. Again some developers believe that if information about the project is exposed to the public, it is likely to generate a strong opposition to the project. Some developers are of the view that if the public is fully aware of the adverse effects of the project, they will make sure that the project is not built in the community. In such situations, the developer will rather choose to build the project in silence. Such incidents are mostly recorded in less developed countries where there are no effective regulatory bodies that will make sure that developers use impact assessment tools. Developers operating in these regions form alliance with political authorities rather than engage the public.

What are the costs or effects of not preparing an EIA and SIA?

The real estate developer will be exposed to many uncertainties if the environmental impact assessment and the social impact assessment are not prepared for a project. As the project advances, the cost associated with each level of development will be unfolding. Notable among the costs of not preparing an environmental impact assessment and a social impact assessment is the opposition of the public. The opposition of the public can result in several lawsuits. These lawsuits will put an injunction on the real estate project. This gesture from the angry public will mean that the project will be put to a halt. Thus the developer cannot meet the deadline for the completion of the project. The developer will incur additional cost in paying compensation to the affected victims.

What are the problems likely to arise if an EIA or SIA is required after a project has begun?

It is extremely difficult to prepare an environmental impact assessment and a social impact assessment for a real estate development when the project has already began. Normally the usage of the impact assessment tools precedes the building of the project. To prepare an environmental impact assessment and a social impact assessment for an ongoing project will require that the activities on the project be brought to a premature halt. At this stage the angry public does not trust the developer. It will be an onerous task to involve the angry public in a problem-solving process to prepare an EIA and SIA because there is no trust and transparency between the public and the developer.

In dealing with the angry public, the real estate developer has to involve the representatives of the public and other relevant stakeholders in a problem-solving process in a way that will affect the final decision. A survey can also be conducted to receive the opinion of those who cannot make it during the scheduled meeting. If the interest of the various stakeholders is fairly represented then the interest of the public will be fairly represented in a way that will affect the final decision. The occurrence of future public conflicts is mitigated when the interest of the public is fairly represented.

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Alexander Ayertey Odonkor

Alexander Ayertey Odonkor is a chartered economist and a chartered financial analyst with expertise in real estate finance and investment . Alexander completed a professional education in electronic trading in financial markets from the New York Institute of Finance. He holds a postgraduate certificate in real estate development from the Massachusetts Institute of Technology. He is a fellow of the Global Academy of Finance and Management. He has a stellar international experience in financial programming and policies from the International Monetary Fund.

www.alexanderayerteyodonkor.com

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