Digital Innovations in Housing: There is a Better Way
In previous blog posts I have made the case as to why people and communities need access to safe, affordable, eco-friendly housing and that unfortunately the US, like many countries, is failing to bring the needed product to market. We have seen how technology can make goods that were once luxuries accessible to all, but that housing has been more resistant to technology changes than other industries, at least in part due to the complicated and interconnected value chain.
Necessity is the Mother of Invention
Plato said that necessity is the mother of invention, and David Rockefeller added that discontent is the father of progress. I would add that the driver of success is when the desire for change is coupled with ability and the knowledge.
As I was growing up, popular media promised a real world made better through technology – bionic people, tricorder medicine, robotic housekeepers. While goods now move faster and can be produced more cheaply, the digital world and the physical world have largely been separated – with the physical world too complex of an environment for digital technologies.
Gentlemen, We Have the Technology
We are just now reaching the point in their evolution that they can be applied to the large thorny issues in housing. These technologies include:
· Big Data
These digital innovations are capable of changing everything from the permitting process through to managing and sharing unused space. We have superimposed a number of the processes that could be impacted by these technologies on the value chain chart we introduced in our last blog post.
These solutions might include:
Housing Development. Solutions that:
Automate or remove the need for labor intensive processes or reduce waste in the building process and / or enabling new building methods
Reimagine the entitlement, zoning and or permitting processes and the time-consuming processes before clearance to build
Enable better usage of resources – land, water, energy - through smart city infrastructure
· Housing Finance. Solutions that:
Facilitate financing, fractional ownership, equity financing, debt holdings or risk sharing, such as blockchain to record and trade fractional ownership of real estate assets and / or trade risks to enable wider ownership of assets.
Facilitate sharing development costs or revenue streams with the community to incent keeping developed or refurbished homes affordable and sustainable
Use alternative data and artificial intelligence to provide access to credit for hard to underwrite properties or borrowers.
Simplify the storage and access to electronic records and / or automate fulfillment of legal contracts for all parties in the transaction
Using drones or robotics for property evaluation or inspection
· Housing Operational Activities. Solutions that:
Support alternative living models, such as technology solutions to support sharing spaces and land (e.g., sharing single family homes, adding accessory dwelling units, single family rental models, rent to own)
Facilitate finding renters and landlords and / or build trust in the rental transaction
Support reducing energy and water usage, or automate maintenance or protect property through monitoring
These are just a few of the problems in the value chain that entrepreneurs are trying to solve. We will deep dive into several of these in the blog in the coming weeks. We’d love to hear from you - what solutions do you think would be most impactful to the cost of housing?
If you would like to learn more about FinTech4Good's efforts in applying digital technology to affordable and sustainable housing or would like to join us in our efforts please sign up here Digital Innovations For Affordable and Sustainable Housing Interest Group.
Article by Ann Epstein