Draft 12.15.20
PUBLIC AND PRIVATE DEVELOPMENT
Harvard GSD 5103/HKS SUP-668
Professor Jerold S. Kayden
Tuesday, Wednesdays, 11:40am to 1:00pm
Spring 2021
Jerold S. Kayden
Frank Backus Williams Professor of Urban Planning and Design
jkayden@gsd.harvard.edu, 617-496-0830
Office Hours: Wednesdays, 2:00pm to 4:00pm; sign up through Calendly
Teaching Associate: Julie Perlman
juliezperlman@alumni.harvard.edu
Office Hours: to be announced
Teaching Fellow: Yihao Li
yihao_li@gsd.harvard.edu
Teaching Assistant: Nora Tufano
ntufano@gsd.harvard.edu
I. COURSE DESCRIPTION
Who develops cities? A complex blend of private and public actions craft the buildings,
physical infrastructure, and public space that constitute urban environments. Why do private
actors originate some activities while public actors originate others? Are there universal rules
governing allocations between the actors? When and how should government offer incentives to
private developers to encourage provision of public benefits? To what extent may private
deelopers be required to provide public benefits? Are public-private partnerships a solution or a
problem? How illuminating, finally, are the labels “public” and “private” for purposes of
studying the creation of productive, equitable, sustainable, and attractive cities?
In the United States, the map of public and private responsibilities for urban development
has changed over time. Starting mid-twentieth-century and accelerating to the present, some of
the traditional boundaries have blurred. Strained public budgets and development industry
pragmatism have coalesced to encourage formal and informal arrangements between public and
private sectors in conceptualizing, financing, building, and managing urban development.
Incentives and mandates are the order of the day. Governments provide financial subsidies,
physical infrastructure, land, and enhanced development rights to secure desired public benefits.
Private developers provide infrastructure, affordable housing, public space, and other public
benefits as their contribution to the bargain. Participation of citizens groups and public planners
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are routinely accepted at earlier stages of project development. Calls for inclusive development
and climate-change resilience are accelerating the pace of public-private cooperation.
The complex blend of public and private responsibilities for urban development requires
application of customized analytic methods and conceptual frameworks, a specialized body of
knowledge, and critical theories if urban planners and designers, public policymakers, real estate
developers, and other interested parties want to be effective city builders. Private actors must
acquire navigational skills befitting a world in which public claims to private profit may be
expected to increase. They must understand how their developments must serve the public
interest along with their own self-interest if they are to be successful developers. Public actors
must grasp the financial exigencies of private development in order to negotiate viable publicprivate deals or obtain public benefits through the development approval process. At the same
time, they must take on the critique that engagement with the private sector may privatize cities
in ways harmful to democratic and equity aspirations. All parties must comprehend how publicprivate collaborations often reassign oversight and risk in ways that can produce unintended
consequences for social, economic, and physical aspects of cities. In sum, a new class of
professional practitioner, the public-private entrepreneur, located in either public or private
sectors, needs a new type of education to address new conditions of urban opportunities and
constraints.
This course employs a combination of lectures, discussions, guest case presentations,
readings, and individual and group exercises to introduce students to the analytic methods,
contextual frameworks, implementation methods, practice areas, and critical debates and theories
necessary to successfully engage urban development from any point of view. The course
commences with instruction about analytic methods, emphasizing real estate financial analysis
while also addressing use of modified cost-benefit, economic impact, and fiscal impact analyses.
Early classes also explore legal, institutional, administrative, political, and ethical frameworks
governing public and private development. Together, the analytic methods and contextual
frameworks allow for elaboration of decision rules for determining public and private financial
contributions, provision of public benefits, deal structures, and similar issues.
Specific implementation methods and practice areas covered in the course include the
following:
• public subsidies (direct grants, subsidized loans, tax incentives, etc.)
• provision of physical infrastructure (capital budgets, exactions, PPP, BOT, guided
land development)
• value capture/value sharing (exactions, inclusionary zoning, incentive zoning,
linkage, valorization, betterment, tax increment financing)
• public approval processes and community benefit agreements
• land disposition (requests for proposals, requests for qualifications, auctions, sole
source)
• land acquisition and ownership models (eminent domain, purchase, land
readjustment, community land trusts)
• business improvement districts, conservancies, and friends organizations
Most of the implementation methods and examples explored in the course are drawn
from United States practice, but international comparisons are often made to demonstrate the
range of variation. Students are encouraged to pose questions about the applicability of United
States implementation methods for any context outside the United States.
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II. COURSE REQUIREMENTS
A. Class Attendance and Participation
Students are expected to attend every class in real time unless individual circumstances
prevent them from doing so. If you are unable to attend in real time, choose not to use your video
camera, or choose to use an alias, please let the teaching fellow know. Each student is asked to
speak in class at least three times during the semester, with the choice when to do so left to you.
Alternative class participation arrangements will be made for those unable to attend in real time.
Class recordings will be posted on Canvas after each class.
B. Reading Assignments
Students are expected to spend an average of two hours per class on reading assignments.
During times that individual and group assignments are underway, reading assignments are often
reduced. Readings come from articles, book chapters, professional reports, and legal documents,
and are available on the Canvas website.
C. Written Assignments
There are two individual assignments and one group assignment. The first individual
assignment asks students to complete a real estate financial analysis proforma and is ungraded.
The second individual assignment asks students to determine appropriate amounts of public
subsidies and compare delivery mechanism. The group assignment places students in either a
private developer or government team for purposes of negotiating a deal for the sale/lease and
subsequent private development of a government-owned land parcel.
D. Final Exam
There is a three-hour, open-book, take-from-anywhere final exam scheduled during the
Design School’s final exam period. The day and time of the final exam will be announced as
soon as the Design School administration sets it, an announcement usually made several weeks
into the semester.
E. Grading
The final exam counts for 40% of the grade, the individual assignment counts for 30%,
and the group assignment counts for 30%. For the group assignment, students will receive the
same grade as other members of their group unless assessments of individual contributions
indicate that an adjustment is appropriate. Meaningful class participation over the entire semester
may increase a student’s grade if that grade is on the margin between two grades.
F. Review Sessions
There will be voluntary review sessions, taught by the course Teaching Associate,
focusing on how to do real estate financial analysis and how to use Microsoft Excel as a software
platform.
G. Software
Real estate professionals from private and public sectors often rely on Microsoft Excel
for conducting real estate financial analysis. Although the course does not require students to use
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Excel, it is recommended that students learn how to use it. Live review sessions and on-line
materials are provided.
H. Office Hours
In a class of this size, it is not easy for me to get to know everyone. I have weekly office
hours on Zoom and am delighted to meet with you then or, if you cannot make office hours, at
another time. For office hours, please sign up through the Calendly link posted above.
I. Ethics
You are expected to abide by all school policies with regard to academic integrity and
honesty. Please consult student handbooks for further information.
III. CLASS SCHEDULE AND ASSIGNMENTS
Classes normally meet on Tuesdays and Wednesdays, 11:40am to 1:00pm ET. I will join
students at 11:30am for an informal gathering before the formal 11:40am start time. I will also
stay around for 10 minutes after each class. Please note that, occasionally, the class schedule and
reading assignments may change. Announcements will be sent to you when that happens.
Class 1. Tuesday, 1/26
Who Develops Cities?
No reading assignment
Class 2. Wednesday, 1/27
Using Real Estate Financial Analysis to Think About Development: The Setup
1. Harvard Business School, Financial Analysis of Real Property Investments (2013), pp.
1-17 (Reading should be purchased directly from Harvard Business School Publishing.
The website address will be provided. ***)
Class 3, Tuesday, 2/2
Using Real Estate Financial Analysis to Think About Development: The Setup (continued)
Start work on the Real Estate Financial Analysis Exercise, due 2/10
Review Session #1, Tuesday, 2/2, 6:00pm: The Setup
Class 4. Wednesday, 2/3
Using Real Estate Financial Analysis to Think About Development: Discounted Cash Flow
Analysis
1. Harvard Business School, Financial Analysis of Real Property Investments (2013), pp.
18-25
Review Session #2, Thursday, 2/4, 6:00pm: Discounted Cash Flow Analysis
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Class 5, Tuesday, 2/9
Comparing Real Estate Financial Analysis with Other Analytic Methods to Think About
Development
1. Harvard Graduate School of Design and Kennedy School of Government, Note on the
Differences between Social Benefit-Cost, Financial, and Regional Income Analyses
(undated), pp. 1-9
2. Kenneth Arrow et al., Is There A Role for Benefit-Cost Analysis in Environmental,
Health, and Safety Regulation?, Faculty Research Working Paper Series R96-04,
Kennedy School of Government, Harvard University (February 1996), pp. 1-6
3. Anthony Downs, Neighborhoods and Urban Development (Washington, D.C.:
Brookings, 1981), pp. 72-85
4. Economic Development Research Group, The Economic Role & Impact of Lincoln
Center, October 2004 (skim)
Background Reading:
1. Glen Weisbrod and Burton Weisbrod, Measuring Economic Impacts of Projects and
Programs, Economic Development Research Group (1997) (consultant that prepared
Lincoln Center report)
Meltzer chapter ***
Class 6, Wednesday, 2/10
Legal and Institutional Frameworks
Real Estate Financial Analysis Exercise due.
1. Gerald E. Frug, City Making: Building Communities Without Building Walls
(Princeton: Princeton University Press, 1999), pp. 45-53
2. Brian W. Blaesser and Thomas P. Cody, “Key Actors and Institutions in the
Redevelopment Process,” in Brian W. Blaesser and Thomas P. Cody, eds.,
Redevelopment Planning, Law, and Project Implementation, (Chicago: American Bar
Association, 2008), pp. 3-10
3. Robert Hamilton, Fundamentals of Modern Business (1989), excerpts from bottom of
pp. 303-311 (skip sections 13.3.5, 13.3.7, and 13.5.1)
4. Charles Haar, “The Joint Venture Approach to Urban Renewal: From Model Cities to
Enterprise Zones,” in Harvey Brooks, Lance Liebman and Corinne Schelling, eds.,
Public-Private Partnership: New Opportunities for Meeting Social Needs (Cambridge:
Ballinger, 1984), pp. 81-84
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Background Reading:
1. Mike E. Miles, Gayle L. Berens, Mark J. Eppli, and Marc A. Weiss, Real Estate
Development: Principles and Process, (Washington, D.C.: Urban Land Institute 4th ed.
2007), “Meshing Public and Private Roles in the Development Process” pp. 323-352
Review Session #3, Thursday 2/11, 6:00pm, Using Microsoft Excel for Real Estate Financial
Analysis: An Introduction
Class 7, Tuesday, 2/16
Political and Ethical Frameworks
1. Alan Altshuler and David Luberoff, Mega-Projects: The Changing Politics of Urban
Public Investment (Washington, D.C.: Brookings Institution Press, 2003), pp. 45-75
2. Marc V. Levine, “The Politics of Partnership: Urban Redevelopment Since 1945,” in
Gregory Squires, ed., Unequal Partnerships: The Political Economy of Urban
Redevelopment in Postwar America (New Brunswick: Rutgers University Press, 1989),
pp. 12-31
3. Susan S. Fainstein, The Just City (Ithaca: Cornell University Press, 2010) pp. 170-175
Class 8, Wednesday, 2/17
Public Subsidies
Public Subsidy Exercise is assigned, due Tuesday, 3/2
1. Excerpt from United States Housing Act of 1949
2. Robert A. Beauregard, “Public-Private Partnerships as Historical Chameleons: The
Case of the United States,” in Jon Pierre, editor, Partnerships in Urban Governance:
European and American Experience (New York: St. Martin's Press, 1998), pp. 52-70
3. United States Government, Catalog of Federal Domestic Assistance
http://www.cfda.gov (skim the Catalog and locate national public subsidy programs
within the Department of Housing and Urban Development, the Department of
Commerce, and the Small Business Administration)
4. Paula Duggan, Making Sense of Federal Dollars: A Guide to Understanding
Allocation Formulas (Washington, D.C.: Northeast-Midwest Institute, The Center of
Regional Policy, 1992), pp. 15, 21-22, 48-49
Background Reading:
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1. Roger Biles, The Fate of Cities: Urban America and the Federal Government,19452000 (Kansas: University Press of Kansas, 2011), Chapters 3-8, pp. 82-286
Review Session #4, Tuesday 2/18, 6:00pm, Using Microsoft Excel for Real Estate Financial
Analysis Intermediate
Class 9, Tuesday, 2/22
Public Subsidies (continued)
1. Brian W. Blaesser and Thomas P. Cody, “Federal, State, and Local Laws That Control
Redevelopment,” in Brian W. Blaesser and Thomas P. Cody, editors, Redevelopment
Planning, Law, and Project Implementation (Chicago: American Bar Association, 2008),
pp. 11-17
2. Terry Moore, Stuart Meck, and James Ebenhoh, An Economic Development Toolbox:
Strategies and Methods, Planning Advisory Service Report Number 541, Chicago:
American Planning Association (2006), pp. 33-59
3. Harvey Brooks, “Seeking Equity and Efficiency: Public and Private Roles,” in Harvey
Brooks, Lance Liebman, and Corinne Schelling, editors, Public-Private Partnership:
New Opportunities for Meeting Social Needs (Cambridge: Ballinger, 1984), pp. 19-20
4. Avis C. Vidal and W. Dennis Keating, “Community Development: Current Issues and
Emerging Challenges,” in Journal of Urban Affairs, Vol. 26, No. 2, pp. 125-137 (2004)
Background Reading:
1. Michael Porter, “The Competitive Advantage of the Inner City,” in Harvard Business
Review (May-June 1995), pp. 55-71
2. Oak Hill CDC By-Laws (2006)
3. Opportunity Zones
4. Low-Income Housing and New Markets Tax Credits
Class 10, Wednesday, 2/23
Public Subsidy Case, with guest Larry Curtis, President and Managing Partner,
WinnDevelopment
1. Reznick Fedder & Silverman, “Overview of the Low-Income Housing Tax Credit”
(undated) (note that some of the tax credit provisions have changed since preparation of
this overview, but the basic approach is the same)
2. Reznick Group, The Low-Income Housing Tax Credit Program at Year 25: A Current
Look at its Performance (August 2011): skim report
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3. Additional guest-specific readings, if any, will be announced.
Class 11, Tuesday, 3/2
Public Provision of Infrastructure
Public Subsidy Exercise due.
1. Boston Capital Budget Five Year Plan
2. John Donahue, The Privatization Decision: Public Ends, Private Means (New York:
Basic Books, 1989), pp. 215-23
3. Jaime Rall, James B. Reed, and Nicholas J. Farber, Public-Private Partnerships for
Transportation: A Toolkit for Legislators (National Conference of State Legislatures,
October 2010), pp. 3-13
4. World Bank Group et al., Public-Private Partnerships Reference Guide Version 2.0
(2014), skim pp. 17-63
5. Tax Increment Financing Documents
Class 12, Wednesday, 3/3
Land Acquisition
1. Kelo v. City of New London (2005)
2. Boston Planning and Development Agency Legislation
3. Yu-Hung Hong, “Assembling Land for Urban Development: Issues and
Opportunities,” in Yu-Hung Hong and Barrie Needham, editors, Analyzing Land
Readjustment: Economics, Law, and Collective Action (Cambridge: Lincoln Institute of
Land Policy 2007), pp. 13-25
Background Reading:
1. New York State Urban Development Corporation Legislation
Review Session #5, Thursday, 3/4, 6:00pm, Review of Public Subsidy Exercise
Class 13, Tuesday, 3/9
Land Disposition and Development
Land Disposition and Development Team Exercise is assigned.
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1. Lynne B. Sagalyn, “Negotiating for Public Benefits: The Bargaining Calculus of
Public-Private Development,” in Urban Studies, Vol. 34, No. 12 (1997), pp. 1955-70
2. Geoffrey Payne, Building Bridges: The Experience of Public-Private Partnerships in
Urban Land Development (Cambridge: Lincoln Institute of Land Policy, 2003), pp.
1-11
Class 14, Wednesday, 3/10
Land Disposition and Development (continued)
1. John Stainback, “The Public/Private Finance of Redevelopment,” in Brian W. Blaesser
and Thomas P. Cody, editors, Redevelopment: Planning, Law, and Project
Implementation (Chicago: American Bar Association, 2008), pp. 155-73
2. Excerpts from “Form of Lease By and Between The Community Redevelopment
Agency of the City of Los Angeles, California and Bunker Hill Associates,” undated, pp.
5-10
3. “Restated Disposition and Development Agreement (Incorporating the First
Amendment) By and Between The Community Redevelopment Agency of the City of
Los Angeles, California, Agency, and Bunker Hill Associates, A Limited Partnership,
Developer” (undated)
Background Reading:
1. Roger Fisher and William Ury, Getting to Yes (New York: Penguin, 1981, 2011 with
Bruce Patton)
*******SPRING BREAK, NO CLASSES, Tuesday, 3/16 and Wednesday, 3/17*******
Class 15, Tuesday 3/23
The Winthrop Square Land Disposition Case, with Joe Larkin, Principal, Millennium
Partners
1. Guest-specific readings
Class 16, Wednesday, 3/24
The Public Approval Process and Community Benefits Agreements
1. City of Boston, A Citizen’s Guide to Development Review under Article 80 of the
Boston Zoning Code, 2004, pp. 3-27
2. Laura Wolf-Powers, “Community Benefits Agreements and Local Government: A
Review of Recent Evidence,” in Journal of the American Planning Association, Vol. 76,
No. 20, spring 2010, pp. 1-19
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3. Atlantic Yards Project, Brooklyn, New York, Community Benefits Agreement, June 27,
2005 (skim the agreement)
Background Reading:
1. “Hawaii Development Agreements Statute,” in Brian W. Blaesser, Discretionary Land
Use Controls (Thomson West, 2008), pp. 524-30
Class 17, Tuesday 3/30
In-Class Initial Meeting between XXX and Private Developer Teams
Class 18, Wednesday 3/31
Value Capture/Value Sharing
1. Alan Altshuler and Jose Gomez-Ibanez, Regulation for Revenue: The Political
Economy of Land Use Exactions (Washington, D.C. and Cambridge: Brookings
Institution and Lincoln Institute of Land Policy, 1993), pp. 122-39
2. Terry Lassar, editor, Carrots and Sticks: New Zoning Downtown (Washington, D.C.:
Urban Land Institute, 1989), pp. 12-15
3. Furman Center for Real Estate and Urban Policy, The Effects of Inclusionary Zoning
on Local Housing Markets: Lessons from the San Francisco, Washington DC and
Suburban Boston Areas, March 2008, pp. 1-13
4. Nico Calavita and Alan Mallach, editors, Inclusionary Housing in International
Perspective: Affordable Housing, Social Inclusion, and Land Value Recapture
(Cambridge: Lincoln Institute of Land Policy, 2010), pp. 1-13
5. Leao Serva, “How Sao Paulo uses ‘value capture’ to raise billions for infrastructure,”
in Citiscope (May 22, 2014)
6. Fernanda Furtado, “Rethinking Value Capture Policies for Latin America,” in
LandLines, Cambridge: Lincoln Institute of Land Policy, 2000, pp. 8-10, 16-21
Class 19, Tuesday 4/6
New York City East Midtown Case, with guest
1. Readings to be announced
Class 20, Wednesday 4/7
Community Development Corporations, with guests Jeanne Pinado, Chief Executive
Office, Madison Park Development Corporation and Maria Cabildo, President, Fireflower
Partners and Co-Founder, East LA Community Corporation and President and CEO
(1999-2015)
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1. Readings to be announced
Class 21, Tuesday 4/13
Privately Owned Public Space
1. Jerold S. Kayden, Privately Owned Public Space: The New York City Experience New
York: Wiley, 2000), pp. 7-19, 42-59
Class 22, Wednesday 4/14
Business Improvement Districts, Conservancies, and “Friends of
1. Michael Murray, “Private Management of Public Spaces: Nonprofit Organizations and
Urban Parks,” 34 Harvard Environmental Law Review 179-255 (2010)
2. Alex Ulam, “Our Parks Are Not for Sale: From the Gold Coast of New York to the
Venice Biennale,” Dissent (Winter 2013)
Class 23, Tuesday 4/20
Team Presentations of Land Disposition and Development Team Exercise
Class will run from 11:30am to 2:00pm.
Class 24, Wednesday 4/21
The Future of Public and Private Development
1. Lynne B. Sagalyn, “Public/Private Development: Lessons from History, Research, and
Practice,” in Journal of the American Planning Association, Vol. 73, No. 1, Winter 2007,
pp. 7-22
Background Reading:
1. Rosabeth Moss Kanter, World Class: Thriving Locally in the Global Economy (New
York: Simon & Schuster, 1995), pp. 353-75
JSK/jk