The vast majority of people working in the field of real estate have not received a formal academic education in real estate. At least, not the vast majority of such people with whom I have had personal business contact over the past five decades.
In discussing the changing structure of real estate education, I will focus on the last five decades, which happens to be the time period in which I, personally, have been involved. The perspective includes that of being a player and a practitioner. It also includes that of being a professor and a student - always a student. My goals have always included understanding the system. What I want to share with you today is my perspective in attempting to understand the system.
My First Decade (1948-57)
My first decade started as the designated house hunter for my family when in the late forties we were moving back into the city from the far suburbs. It didnít take long to figure out that the search criteria, which included unit heat (excluding open flame gas heating), high ground (avoiding the damper climate), and school district implied a variety of other characteristics, e.g., building age, geographic location, and ethnic neighborhood.
That was a self-educating experience. That was the norm for those in the business. As a side note, I was in high school, and someone in the business, at the end of a discussion about what housing we would look at, suggested that real estate might be a career for me.
In the early fifties, between my sophomore and junior years at UCLA, I took a summer job selling real estate. The broker/owner recruited about six young men whom he tutored for the California real estate salesmenís exam and in learning enough about house values, location, and salesmanship to bring the deals far enough along so he could close when necessary. That was my first exposure to in-house training. Since then, in-house training programs have become more elaborate.
Later, that same decade, while a graduate student at UCLA, I was an appraiser for the state of California, and underwent one of the most formal training programs of the day - two weeks of intensive training in Sacramento.
The unusual thing about that decade was the beginning in the boomlet of real estate majors at the university level. Dean Arthur M. Weimer, at Indiana University, started providing doctoral level education to returning World War II veterans, and there were mushrooming real estate programs around the country. Other long-standing programs, including those at the University of Wisconsin and University of Florida, were adding to the supply of formally educated real estate professionals. Perspectives differed. Dean Weimer at Indiana University took an administrative approach. Professor Richard Radcliff at Wisconsin took a land economics approach. Professor Al Ring at Florida took a valuation and transactions approach. And, there were others. But, in general, the programs focused on a specialized business, with typical curricula including a principles of real estate course, an appraisal course, one in real estate finance, and maybe one in real estate law if the principles course was really transactions rather than applied economics.
When I returned to school after the summer between my sophomore and junior years, my major changed from finance to real estate and urban land economics. I studied under Professors Fred Case and Jim Gillies, both of whom had been educated by Art Weimer. The major was the same for the MBA, also at UCLA. Then, in Ď57 I went to Indiana University for the Doctorate in Business Administration with a major in Real Estate Administration. This was highly specialized for academia. It is even more unusual now as compared to then.
The Second Decade (1958-67)
The second decade brought the Ford and Carnegie Studies. These studies blasted the descriptive nature of the curriculum at most schools of business. They advocated more quantitative analyses, greater rigor. As a result, university programs, which focused on specialized industries, started to fall like flies. The fall continued into the seventies and eighties leaving relatively few specialized programs, including real estate.
Continuing the jump ahead in this discussion, most of the surviving programs in schools of business were housed within finance departments, with real estate treated as a subset of finance. Some of what was lost in spatial orientation was picked up by planning schools, which saw real estate development education as an area of opportunity.
My second decade started with the doctoral education, continued with a stint at the University of Southern California, which had a program typical of the times, and ended with my beginning a relationship at The American University, Washington, DC.
The Third Decade (1968-77)
The third decade was one in which industry education took hold. It was the boom in professional designations.
The American Institute of Real Estate Appraisers (AIREA), one of the most prestigious real estate associations and one of the longest standing was running a booming business in education. To get the jobs, one needed certification or credentials of some sort. The MAI was the most prestigious appraisal credential. They later got a run for the money from the Society of Real Estate Appraisers and eventually the two organizations merged. Another lead industry organization was the Institute of Real Estate Management (IREM). Their main designation, CPM, was and is the lead property management designation.
As chance would have it, The American University had been offering official courses of AIREA and IREM for years before I arrived. My job, as program director and occupant of a partially funded chair in real estate (funded by the local real estate boards) was to build a unified program. Such a program not only had to meet the academic tests, but be responsive to industry.
From my perspective, that decade was the hey day of industry educational development. This went beyond the NAREB (now NAR) affiliates. We did programs and worked with the National Association of Home Builders, the Mortgage Bankers Association, Urban Land Institute and numerous other trade associations with interests in real estate. Also, other groups interested in land use, including the Lincoln Foundation, provided educational programs.
The Fourth Decade (1978-87)
By the fourth decade, the late seventies and early eighties, there were an increasing number of conferences sponsored by a variety of trade associations and an increasing number of for-profit conference programs. Industry was thus increasing its relative role in real estate education.
AACSB accreditation pressures on The American University had seriously changed the relationships with industry. Their cooperative work was confined to Institute/Center programs. Some fine cooperative programs had been developed elsewhere, e.g. University of Florida, which led the way in a new format of dual credit for the American Institute of Real Estate Appraisers. The biggest innovation of the decade, from my perspective, came late in the decade. Its roots were in the beginning third decade, 1967-68, when to round out The American University (AU) real estate conglomerate we started the Homer Hoyt Institute to serve as the research arm of the then real estate and land use planning program. It did that for over a decade on soft money, although it distanced its ties with AU with a bylaw change making it truly independent of the university. The watershed came in 1979 when Homer Hoyt donated a mile of ocean front land to provide an endowment for the Institute named in his honor back in Ď67. As a result of that donation, the Weimer School of Advanced Studies in Real Estate and Land Economics (nee the Post Doctoral School of Real Estate and Land Economics) was started.
This endeavor is to educate the educators. It is a leveraged operation. The Advanced Studies Institute provides programs which meet the highest academic standard and which serve to bridge the gap between industry and academia.
The Fifth Decade (1988-1997)
This brings us to the fifth decade, and a related initiative of the Homer Hoyt Institute is establishing a Hoyt Fellows program to parallel the Weimer School fellows program. The key to the strategy is relevance as well as rigor.
This relevance as well as rigor has been and will continue to be the theme of the Hoyt Group in its mission to develop and disseminate the body of knowledge. The last part of this decade has been focusing upon the Hoyt Model for REIT valuation and analyses.
In the meantime, at the beginning of this decade, the Porter-McKibbin Report, sponsored by the AACSB, indicated a reversal of the trend of rigor at the expense of relevance. Even with that enlightenment, there has not been a rush by universities to fill the gap in real-estate education treating real estate administration as a field or discipline. In schools of business it is still viewed as a subset of finance.
Industry has been filling the gaps to some degree in two ways. One is the professional courses alluded to earlier. The other is in the conferences and other specialized programs.
The conferences and specialized programs do an excellent job of keeping practitioners current on what is going on. They also fill in some technical detail. What they do not do, and which is ordinarily expected of academia, is to provide a paradigm of rigor. Such a paradigm contains rigorous curricula in a frame of reference that enables the student to see and apply the body of knowledge. The Next Decade (1998-2007)
The next decade, starting this year, is going to provide a resurgence of individual education in a non-classroom environment. That is how I started fifty years ago. The difference this time is that rather than face to face communication, the vehicle will be on the Web.
Distance learning has been with us for some time in the form of correspondence courses. Sometimes they were tied to direct contact after an interval of correspondence, such as the Mortgage Bankersí three-year program with one week of training during the summer, preceded by home study. The distance learning boom is starting on the Web in a variety of areas.
The Hoyt Group is making a foray into the area by taking its Hoyt Model for REIT valuation and risk analyses on the Web and linking it to a series of three monographs which will comprise a book on REIT Investment Analyses. The book will be the first part of a course on real estate analyses. The second part will be what we would consider to be on-line lectures. Beyond the lectures, there will be Internet discussion groups.
I believe that this will be the forerunner of numerous real estate courses, many of which will be offered by universities for certificate and/or degree credit.
One possibility which will spur the competition to provide the courses will be a format in which some on the nationís leading real estate educators will provide courses on a contract basis on the Internet, independent of their primary university affiliation. Thus, colleges and universities wanting to offer high quality real estate courses can, as an alternative to hiring in-residence faculty, contract for the courses. They may even, with in-residence faculty, hire the national experts to team teach.
University budgets are strained and tuition expenses are becoming a crisis problem in some households. The present university system, while making significant contributions to intellectual development and professional education, is not the only way in which to have the job done. Industry has set up substantial competition in formal as well as informal educational programs, and so if universities are to enhance their position in real estate education, it will be through the application of technology.
In any event, industry has staked its claim in real estate education and will utilize technology as a delivery vehicle.
I learned a long time ago that the first principle of forecasting is to make forecasts for the distant future. The second principle was to keep your own records.
Well, these comments are recorded in print, and the forecast is only for a decade. With some luck, Iíll make it through at least one more decade and you can hold me accountable for the vision.
The vision is that we are beginning a revolution in education, including real estate education. You will not only be a part of it, but may also be among its leaders. The best of luck to you.
*Presented at the annual meeting of the American Real Estate Society, April 15-18, 1998, in Monterey, California, at a Maury Seldin Advanced Studies Institute-sponsored session entitled ďReal Estate Education: Processes and Pedagogy.Ē