Welcome to Part 4 of Future of Good’s series on social purpose real estate (SPRE).
From the way we buy and sell goods and services, to how we communicate with friends and strangers alike, it would be difficult to name a part of our lives that hasn’t been transformed by advances in technology. To use the lingo favoured by Silicon Valley, entire industries have been “disrupted” by new entrants who are using technology to leapfrog the status quo – and real estate is no different.
Technology is helping to make real estate more sustainable – from how buildings are designed and constructed to how we operate and interact with them in the real world as tenants, residents, and neighbours.
Straws, sticks, and bricks
The way we build our buildings, at least in Canada and the U.S., hasn’t changed much for a very long time: houses are framed using wood, and taller buildings with steel and concrete. However, business as usual is about to change, thanks to technological advances in building materials.
Take concrete, for example. It’s found in almost every modern structure we build, but the production of its primary ingredient, cement, comes with a tremendous carbon footprint. A Canadian company has invented a new type of concrete that uses waste carbon dioxide as an input, instead of producing its own, resulting in a stronger building material that is still familiar to builders and compatible with existing equipment. The imperative to reduce the carbon emissions of our buildings has also spurred new developments, like graphene-based paint that can absorb CO2 from the atmosphere.
Old-fashioned wood is also having its moment in the spotlight as it sheds its outdated perception as a fire hazard unsuitable for large buildings. New techniques known as cross-laminated and glue-laminated timber can create building blocks that are strong enough to take the place of concrete slabs and steel beams, but at a fraction of their weight. If harvested from sustainably-managed forests, timber buildings can sequester carbon with the added bonus of being built quicker than the traditional methods of welding steel and pouring concrete.
However, these advances in technology need to be accompanied by advances in our ways of thinking as well. To use our buildings as carbon sinks, we need to think beyond construction to consider a building’s entire life cycle. Our usual practice of demolishing buildings simply releases the sequestered carbon back into the atmosphere. Similar to how our recycling system works on the principle that materials can be easily separated and sorted, our buildings will need to be constructed such that their individual components can be disassembled, salvaged, and reused elsewhere. Again, technology is facilitating this process with digital records and databases that track every individual building component’s future value and suitability to be recycled, but will also require a wholesale shift in economic mindset, regulatory culture, and political will.
The mail-order home of the 21st century
The benefits of carbon-reducing technologies are not limited to tall or large-scale buildings. Advances in manufacturing techniques of residential homes also have the potential to reduce emissions and waste, as well as mitigate the effects of the affordability crisis we covered in our previous article on impact investing.
One example is the increasing popularity of pre-fabricated, modular housing. In contrast to the common practice of transporting building materials to the job site, where construction is at the mercy of the weather and other unforeseen delays, prefab housing is manufactured indoors in the controlled environment of a factory, which produces less waste with the help of more precise computer-aided machinery. The pieces are then transported to the site and assembled 20-50 percent more quickly than a traditional build, thereby also saving on labour costs. Prefab homes are usually designed in a modular fashion, to allow for larger or different floor plans. If additional technologies are used to minimize energy usage and incorporate reclaimed or recycled materials, the potential outcome is a home with a drastically smaller carbon footprint, built faster and with considerable savings in operating costs.
A closely related but even more nascent innovation is the “3D printed” house. Using the same basic principle as any 3D printer you would find at a library or makerspace, but using concrete instead of plastics, it is now possible to 3D print a 500 square foot house in 24 hours, at a cost low enough for a rural family with a median income of less than $4 a day. While it’s too early to determine the full impact of this new capability (including both benefits and downsides), it has obvious implications for any community around the world that’s struggling with a housing and homelessness crisis.
From smart homes to smart buildings
As we covered previously, our built environment contributes to carbon emissions well after construction is complete. A significant percentage of global greenhouse gas emissions comes from the fossil fuels we burn to heat and cool our homes, workplaces, factories and commercial properties. While far from a silver bullet, technology does have the ability to help us manage our current usage as well as create alternatives to the status quo.
One particularly low-hanging fruit in addressing this has already been picked over by a plethora of consumer tech companies — smart thermostats. The newest models are increasingly using artificial intelligence algorithms, fed by ever-cheaper sensors connected to the internet, to “learn” your habits and preferences based on your comings and goings, and automatically optimize the temperature. Depending on where you live, you may even have the choice to let your utility company remotely adjust your thermostat, collectively with hundreds or thousands of other households, in order to reduce the load during peak demand periods. But the true potential of this technology is in scaling up its use in highrise condos for example, or in offices and other commercial buildings, where hundreds of individual thermostats can be managed centrally to minimize energy consumption and ultimately reduce overall emissions and utility bills.
All this data can be further leveraged to help contextualize, inform, and incentivize. In England, public buildings are required to post a Display Energy Certificate that shows a report card-style “grade” of its energy efficiency and carbon emissions, benchmarked against a typical building of its type as well as its own performance in previous years – an idea that’s being adopted across the pond by New York City. These ratings can even be displayed in real time. The idea is to make the abstract tangible, and the invisible visible, as a way to help a building’s managers (as well as residents and tenants) understand how their choices and habits affect their building’s energy performance, and how they stack up against the best practices of peers.
From smart buildings to smart cities
It’s not a huge leap to see how these “smart building” technologies can be used beyond the confines of a single building – in fact, much of their power and potential lies in applying it at the scale of a multi-building campus, district, or even an entire neighbourhood.
And one cannot talk about smart neighbourhoods without mentioning Sidewalk Toronto, the controversial partnership between the urban innovation division of Alphabet (Google’s parent company) and the government agency Waterfront Toronto. Sidewalk Toronto envisions multiple layers of smart technology – everything from self-driving cars and delivery vehicles, infrastructure that responds to changing weather conditions, and a power plant that converts organic waste into electricity – powered by a web of wireless sensors and Google’s algorithmic know-how. Its plans also include many of the climate-friendly technologies described above: tall buildings made from mass timber, modular designs using recycled building materials, and artificial intelligence that automatically optimize energy usage with real-time data.
However, even though data is abundant and the computing power to analyze it is cheap, it doesn’t necessarily result in a useful interpretation or application in real life. To integrate a dose of contextual reality into its plans and projections, Sidewalk Toronto tasked the sustainable development consulting firm Urban Equation with combing through all available data to map out the energy usage of existing commercial and residential buildings in Toronto, and suss out the deviations from projections as well as industry benchmarks. This ensures that Sidewalk Toronto’s energy usage plans are based on the most accurate information available, rather than purely theoretical models and projections that don’t necessarily hold true in the real world.
The jury is still out on the ultimate net benefit of infusing more smart technologies into our homes, workplaces, and neighbourhoods. Given the backlash from Toronto’s tech, civic, and social activism communities around privacy, surveillance capitalism, and perceived subversion of established democratic processes, it’s clear that Sidewalk needs to proceed with caution as it works to realize its vision of “reimagining cities from the internet up.” In order to navigate the premise, promise, and perils of smart cities, those in the social purpose real estate sector need to be at the table with developers, technologists, urban planners, elected officials, and residents in order to influence and inform its development, and ensure that technology remains in service of people and the public interest, and not the other way around.
Stay tuned for the next and final article in this series, where we take all the SPRE concepts we’ve explored thus far – the perspectives and practices of social impact organizations and real estate developers; the influence of capital and the power of technology – and integrate them with policy change, culture change, and other necessary ingredients of systems change in our quest for more equitable, holistic communities.
This topic is sponsored by Windmill Development Group, a real estate company with a triple bottom line approach that aims for zero ecological footprint, and its sister company, Urban Equation, a consulting company that advises those in the real estate industry on innovative practices for sustainable development. Future of Good retains full editorial control, as in every other article it publishes.