Why Traditional Real Estate Needs to Embrace Smart City Technology

Thesis: If 2% of the land where we are living is producing 75% of emissions, most of the carbon emissions come from Real Estate as we know, so how are going to build the 1% of the land? We to redesign how we deploy Real Estate & our notion about Cities, to mitigate that risk.

In the 1980s, businesses typically kept paper files in their offices, in the 90s, we saw files moving out of the downtown to less costly suburban locations. In the 2000s saw files were being moved to the Cloud, sometimes internationally. Today, we are not going to shift the whole industry but consumers are aware now that they can have a hybrid way to consume Real Estate.

Amazingly, we needed a global pandemic to change an industry that remains very elitist and has to adapt to sustainable standards on climate change to survive and mitigate risks as the industry is one the largest carbon emission looking at the whole construction cycle, as I mentioned in a previous article here. We are getting out of the pandemic, so I would approach this in a new way as we know the industry got over $24B poured from VC in 2020.

Real Estate can only change if VCs allocate capital to shake the industry- there is a parallel market that’s not yet deserved for over 1 billion people due to improper land development, governance and data management. Affordable housing property managers tend to invest far more in social services for their tenant population than market rate property managers considering the coolest new piece of technology. You can make money while serving the public good.

Real Estate remains a very highly appreciated asset class, making it snob and unaffordable. Real Estate is now is on its way to change how we use, rent, buy and operate an asset- not only for the residential segment but other verticals like supply chain, co-working, community living, retail and a new infrastructure that we need for mobility like Flying cars, Drones, new types of materials (design), including building in small, medium-sized towns.

First, we need a more persevering venture capital source, with a better empathy of underserved communities. Most venture capital firms fund what they know, and unfortunately few understand the affordable housing community, which is largely minority with female heads of household. But pay attention: There are rewarding opportunities here.

Second, housing tech is in desperate need of a push to market. The tech is out there, but most entrepreneurs don’t know how to “sell” to this specific customer base, which they must do if they want to create viable businesses that will attract venture capital. There are numerous existing technologies ready for propulsion to take to the next level.

The real enhance is happening now, as we came from a decade of theoretical and hypothetical Smart City concept that was incapable to face pandemic basics, in many ways. I see new types of developments that are going to combine residential, commercial and logistics, new hardware, software embedded to optimize OPEX, new styles of living will lead us to redefine the notion of a “unit” or Condo.

The classic way to build houses connected by cars is obsolete and we know that the new consumers don’t want to drive to buy milk. Real Estate has one of the most outstanding opportunities to redefine the notion of Neighborhood, going beyond the cliché of “15 minutes City” that only fits for Europeans.

New urbanism (Financial models) that involves new ways of living, working & entertain

It is time to handle the problem about income, employment and housing, that problem can be solved by designing new financial models where low income can have proper solutions, as they were forgotten in last decades, it is indecent to leave people because of whatever excuse. Despite that Real Estate is appreciated by scarcity and land, the new models would be bigger in terms of financial returns.

New approaches for Master Plans must be assessed and adopted, the old theories about Urbanism related to employment growth are static since 1970, the notion of density can be reviewed, as the new renters (Gen z) and buyers (millennials are now 40 years old) are showing different financial approaches to get Real Estate but also know how they use the space (Geo-Spatial logics),
Our style of life is a new trigger, our family structures too.

Looking at the fertility rates for the next decade or beyond, many cities will face a disproportioned unbalance, which is the case of Bogota, with almost 10M people with a labour force that is getting older without kids, (too expensive to afford a family with 3 kids).

The factors mentioned here might sound arbitrary or disconnected but we are forgetting the basic function of Real Estate, which provides space for human living, in all activities. We have a responsibility to draft the districts, neighbourhoods and Cities we want as politicians (in many markets) have failed in many ways, the new dawn for Real Estate is just giant, a massive reallocation of value. The new Urbanism might not fall into a complex campaign, it requires a sophisticated approach, tech embedded and a new approach for land distribution, Urbanism hasn’t served very well end-users in many places.

Let’s build a new world !!!

Andres Assmus
Founder & CEO at CityZeen.co
Cofounder at ColombiaPropTech.com
Board Member at FIBREE.org

Originally published at https://medium.com on September 15, 2021.