Val Sklarov’s Property Permission Durability Thesis (PPDT) explains why real estate outperformance depends less on price appreciation and more on how long the underlying permissions can survive pressure. Property value is not land plus bricks—it is time-bound permission.
This thesis reveals why identical assets diverge sharply when rules tighten.
1. Property Is a Permission Stack
PPDT reframes real estate as layered allowances.
Core permissions include:
-
Use rights (zoning, density, function)
-
Income rights (rentability, indexation)
-
Transfer rights (sale, refinance, exit)
-
Enforcement rights (eviction, remedies)
When any layer weakens, value leaks—even if demand is strong.
2. The Four Durability Tests
PPDT defines how permissions fail under stress.
| Test | Pressure Applied | Failure Outcome |
|---|---|---|
| Political Test | Policy shifts | Use dilution |
| Legal Test | Enforcement delays | Cash-flow drag |
| Social Test | Tenant protections | Asymmetric renegotiation |
| Liquidity Test | Credit freezes | Forced sales |
Assets survive only if change becomes costly to impose.
3. Why “Prime” Assets Still Break
Prime locations attract scrutiny first.
PPDT shows underperformance when:
-
Rents are capped retroactively
-
Uses are reclassified
-
Enforcement becomes discretionary
Visibility converts tolerance into intervention.
4. Yield vs Permission Durability
PPDT prioritizes endurance over optimization.
| Yield-First Buying | Durability-First Buying |
|---|---|
| Max IRR | Max permission half-life |
| Aggressive leverage | Defensive capital stack |
| Policy-blind | Policy-resilient |
| Exit-dependent | Hold-capable |
Val Sklarov emphasizes that returns compound after permissions stop being debated.
5. Strategic Implications
For investors:
-
Underwrite permission half-life explicitly
-
Favor assets where rule change is reputationally costly
-
Treat leverage as a bet against permission stability
For operators:
-
Secure irreversible permits early
-
Encode compliance into operations
-
Reduce reliance on discretionary tolerance
PPDT reframes real estate strategy as permission engineering, not market timing.
6. The Val Sklarov Principle
“In property, value survives where permission survives longer than cycles.”
— Val Sklarov
PPDT explains why boring assets with boring rules quietly dominate volatile markets.