Unlocking Strategic Housing Innovation

Published: Sunday, July 17th, 2016 by Lenora

3_multicolor_cityscape copyIs affordable housing innovation for sustainable and inclusive communities happening? Yes, absolutely, but scaling, replicating and financing remain a challenge. That was the takeaway from the 2016 Strategic Innovation Summit on Affordable Communities Everywhere, held by the Technology and Entrepreneurship Center at Harvard (TECH) with support from Barcelona Housing Systems, where I attended and keynoted.

The event was held to surface examples of disruptive housing innovation and community building and to develop networks among housing innovators. Rarely does a housing conference convene the spectrum of business, real estate, entrepreneurship, social innovation, infrastructure, design and government. That in itself was a success.

The core existential challenges of affordable housing were in full view: It’s complex and difficult because it’s embedded within several overlapping organizational ecosystems (read OPIC’s Debra Erb on this topic here). Those ecosystems may have divergent goals and often their own technical languagesHousing is also capital intensive. As a result, it requires governments, small and mid-sized private developers and large institutions – or some combination – to finance it. Housing cuts across human, spatial and economic development goals, so it generates public as well as private goods.

The following are thoughts on the keynotes and a few other presentations. The aim is to enhance impressions from the World Bank conference from last month (here). I hope speakers will forgive that I couldn’t include everyone’s great presentations.ACE2016

Meaningful housing innovation has to be multidisciplinary. The best examples of housing innovation emerge from design, policy, development, real estate, construction, finance and, in the best cases, community. So it’s fragmented. Real estate and finance have the capital. Policy writes the rules. Urban development practitioners think beyond the project. Designers are the placemakers that bring together aesthetics and planning; they generally feel excluded. Giving the rationale for finding common ground:

  • Jan Mischke of McKinsey Global Institute presented a now well-known, extensive study of the global affordable housing challenge. The report’s recommendations suggest opening up the following would unlock affordable housing: land, development costs, maintenance and finance. Pointing out the pitfalls of poor coordination and sequencing, Mischke pointed to multidisciplinary applied labs to develop more than just technical infrastructure projects.
  • Jack Wilson’s $300 House Design Workshop at Dartmouth developed housing prototypes for rebuilding in post-earthquake Haiti. It was good to see housing for Haitians placed at the intersection of other human goals – health, education and cultural life, and business school students bringing systems thinking. Even so, the social, institutional and political challenges have made execution slow and difficult.

Who “owns” this conversation and its outcomes? There has to be an entity that can make these conversations and projects happen and that can drive the partnerships that bring all players across the spectrum together. Key ideas here in this came from:

  • The Hon. David Lammy, the UK MP representing London’s diverse Tottenham constituency, suggests strongly that government is the steward of communities’ rights to affordable housing as he struggles with others in government to housing accessible to all in one of the most priciest housing cities on earth.
  • Aisa Kirabo Kacyira, the Deputy Executive Director of UN Habitat, wants urban communities themselves, especially the excluded and disadvantaged, to drive the new urban agenda, which will be finalized at the global dialogue Habitat III in Quito in October. Mainstreaming urban communities into decision-making still requires capacity-building to produce “concrete” (no pun intended) deliverables.

What sets apart creative and innovative housing solutions? Low levels of  R&D in real estate doesn’t help housing innovation in a rapidly urbanizing world where people are ditching cars and governments need to cut carbon emissions drastically. Most innovative solutions came from:

  • Cesar Martinell and Barry O’Neill, plus others representing Barcelona Housing Systems, discussed a business model driven by technology, materials, comprehensive design and speedy execution. Technology plus sustainability plus design could shake things up in highly functional institutional settings. BHS will be interesting to watch in their first markets. Unfortunately, neither the scale nor the infrastructure or supply chains exist in most developing economies to execute on the BHS vision yet.
  • Greg Searle, the President of Bioregional North America, gave an exceptional presentation on One Planet Living, a framework for sustainable living, as well as One Planet Communities, their eco-communities. This is comprehensive urban design and community development based on shared values – married with sustainable infrastructure. I was bewitched by thoughtful touches, like eco-concierges, gentle peer pressure for energy efficiency, built in car- and bike-sharing, community gardening, repair cafes and more. Affordability, inclusion and diversity never came up, but Bioregional also offers ideas for communities with binding cost constraints.
  • Hasan Alemdar, the Founder of Domogeo, gave a start-up perspective, often missing from affordable housing: starting with the client’s needs. Domogeo directly responds to clients’ need for work and living space with security and sustainability (both environmental and financial sustainability). Alemdar exploded a big affordable housing myth – that poor people live anywhere in anything. This example of user-centered design needs partnerships and model iteration, as well as risk capital in challenging new markets.

There are many visions of success and large gaps below the surface. “Sustainability” can mean social equity, environmental sustainability and every shade in between. A few underlying issues include:

  • Developed vs. developing contexts. In the former, the focus is on both quantity and quality of supply, access and rights, livability and design, and social and political capital. In many developed markets, many housing ecosystem enablers exist, including policies, mortgages, subsidies, mission-driven developers, rental housing and investable vehicles. These are non-existent in most developing markets, or in early stages at best. The basics are still pressing in developing economies (e.g. land, infrastructure, ineffective/corrupt government, private sector apathy, weak supply chains, etc.). Relating across this divide is informative but not always applicable.
  • Adaptive reuse and community redevelopment vs new greenfield development. Marla and Larry Curtis of Winn Development focused on historic rehabilitation. This presentation was among a small handful of discussions about leveraging existing community assets, as was that of Maria Eugenia Torrico of Red de Accion Comunitaria of Bolivia and Sasha Tsenkova’s presentation on energy efficiency upgrades in Eastern Europe. Such projects are lengthy, complex and difficult to finance but arguably generate higher social return on capital with lower resource outlays. Greenfield development, such as that espoused by Barcelona Housing Systems, could address massive shortages faster but with potentially less community buy-in.
  • Climate resilience and resource efficiency should not be a trade-off with inclusion and livelihoods. Still, resource constraints and consumer preferences are a reality. Energy poverty spans all communities regardless of geography. Lower and moderate income people in developing economies may not want to pay more for energy and water efficiency, but they do need it. On the other hand, this segment tends not to accept alternative, sustainable materials, preferring the same product as higher income homes, i.e. concrete block. Not many approaches successfully bridge this gap and the public co-benefits.
  • Homogeneous and utilitarian with an emphasis on quantity vs. “slow” user-centered design with an emphasis on community. To paraphrase the insightful question of Juan Carlos Franco, Executive Director of the Fundacion Mario Santo Domingo in Colombia in response to the potential to rapidly build utilitarian approaches to modular housing, “Are we really ready to build millions of houses with no community to connect them?”
  • And related: Community-led and in situ vs. facilitated and partnered projects. A lunch conversation went something like this, “You make community members go through some kind of training? We could never force this. The community knows how to manage itself. We only help them to organize.” The response was: “In our case, people come from many places to live with people they’ve never met. They’re also receiving social benefits, so it’s important to build a sense of shared future and responsibility.” Ideally, most projects would embrace the best of both (is this Bioregional?).

Where housing innovation stays small and niche, its impact will be limited in addressing mass deficits, if only because neither public nor private capital tends to follow niche solutions. Innovation must produce replicable approaches and models, not necessarily the same model over and over, because the housing ladder requires diverse approaches and the need is massive. All these individual efforts have to fan out and change our cities, house our people and fill our communities with life. So many presenters point to the need and the effort to bring all the threads together. This may be the ultimate innovation.

Thanks to David Ricketts of TECH and his team for advancing this important dialogue with such a productive program.