Tuesday, August 31, 2010

Reconnecting, re-energizing and readjusting

by Kris Hammargren, Senior Associate Director for the Graaskamp Center

Students are starting to arrive on campus (classes begin Thursday), full of stories about summer break. Their activities included internships or project work as well as some well-earned relaxation. But what have our faculty been doing during the summer break?

Faculty and staff of the Wisconsin Real Estate Program have a full plate of activities and responsibilities during the academic year and the summer is no different. Time away from the classroom is spent on participation in professional activities and in renewing important relationships.

I spoke with Professor and Department Chair François Ortalo-Magné about what he has been up to during the break.

Kris Hammargren: Participating in industry conferences is important for anyone who wants to stay up to date on business challenges and opportunities. What did you get out of your visit to ICSC’s RECon Global Real Estate Convention in May?

François Ortalo-Magné: I connected with Bruce Johnson, who is executive vice president and CFO of Regency Centers. Bruce allowed me to shadow him for an investment dinner and 30 meetings in two days at ICSC. It provided me with a fascinating window into the work of the CFO of a public-listed real estate company. It’s very important for me as department chair to have a grounding in the business world, to understand the practical approach of someone like Bruce, to know what it’s like for a top executive to manage his business relationships. We saw a wide cross-section of industry players, met investors, and I learned right there on the frontline great lessons that I will take back to our students.

KH: Bruce is a Wisconsin Real Estate alum who has a long history of involvement with the program. How are relationships like this important?

FOM: Relationships with our alumni are a priority for me. I enjoy connecting with former students of mine, and I love meeting with longtime alumni of Wisconsin real estate. This summer, I was happy to meet with many alumni and friends of the program at ICSC in Las Vegas and also on my travels to New York, Boston and Denver. These meetings are opportunities for me to share with them our plans for the future, get their suggestions to address our concerns, and, just as I did with Bruce, to learn about their business, their values, their successes and failures--lessons which I share with students back in Madison. I always get great feedback and ideas from our alumni. They are experts in real estate, and they share our values (or, I should say, we share their values). Most importantly for me maybe, I get a rush of energy and enthusiasm from their support. There is no greater satisfaction for a professor than to meet former students happy about where their education got them and to meet alumni who are proud of and grateful for the steps we are taking in Madison to continue enhancing the quality and the reach of the membership of the Wisconsin Real Estate Alumni Association.

KH: In addition to work in the U.S., you’ve also been active in France, working with the French government. Would you tell us more about that?

FOM: I have been advising the French government on its efforts to reform the French housing policy. It’s a great challenge: the French housing market is distorted by a multitude of policies that were designed with various non-housing objectives in mind (e.g., to stimulate the economy, to earn the votes of a number of constituencies). The ongoing budget crisis in France and a recent generational change in many government offices has provided an opportunity to clean things up. I try to help by providing “mechanical” support, helping policymakers understand how to best achieve their objectives. The main difficulty with housing lies in understanding how housing prices react to policy intervention, often to transfer the benefits of a policy away from the intended recipient (that’s RE420 or RE720 – urban economics!). Here is a concrete example: If we give young households a subsidized loan to buy their first property in the most expensive French cities while not allowing more supply to be built, we are just helping the current owners in these cities by increasing demand for their property. So subsidizing housing purchases in places where housing is expensive and supply is tight does not resolve the affordability issue that preoccupies the politician. Starting this fall, it looks like the French government may condition the availability of subsidized loans on the release of new building permits by the local authorities. That would be a step in the right direction.

KH: Thank you, François. Like you, I think we’ve all been renewed and re-energized over the summer and are ready to step-up to the new school year.

For more information on our faculty’s activities this summer, check out this previous post with Professor and Graaskamp Center Academic Director Stephen Malpezzi.

Photo by Steve Becker © Steve Becker Media

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