The Future of Real Estate … from smart cities to local communities, virtual work and intelligent wellbeing, doughnut environments and happy families
December 20, 2020
Homes are our personal cocoons, our places to relax and recover from the challenges of a fast and challenging world, to connect with family, to eat and sleep, to be ourselves.
Yet the Covid-19 pandemic has also made homes our windows on the world, a place for work, for learning, for entertainment, for exercise. When lockdown first struck we enhanced our hardware, now we are reimagining homes for good.
Changing how we live
More generally we see global “megatrends” changing where and how we live:
- shift towards urbanisation, in search of better lifestyles and services, although balanced by a desire to escape dense populations.
- changing demographics, as populations live longer, care and support matters more, as do trends in singles and people marrying much later.
- sustainability has become a priority, environmentally in using less and cleaner energy, and socially in supporting local communities and others.
While these megatrends may not happen overnight, they are the big shifts in our wider world, that will ultimately transform the ways in which we live.
Covid-19 has accelerated many of these trends, as we rush to reprioritise what matters in our lives, and also cope with the effects on our economies, work and health. It has driven:
- changing work, enforced working from home will evolve into more virtual organisations, more gig working, and more fused home-work styles.
- changing towns, the huge shift to online shopping and entertainment and education, will have lasting impact on the role and feel of towns, malls, schools and shops.
- changing communities, our interests are shared less by people who live in physical proximity, but by those who connect socially online, for sport and much more.
So what is the future of homes, towns and cities?
The rush to “smart cities” has been driven by technological possibility – the ability to create clean energy-powered, intelligent service-providing new urban settlements.
A smart city, according to Forbes “is one that leverages technology to increase efficiencies and improve the quality of services and life for its residents. Smart city initiatives can cover anything from power distribution, transport systems, street lights, and even rubbish collection. The idea is to use data and technology to make everyday life easier and better for the people who live and work in the city, while maximizing the use of resources.”
From Masdar to Neom we imagined huge new technological metropolises.
More and more of us are living in cities – the UN predicts that 68 percent of the world’s population will live in urban areas by 2050. And this means our cities are facing growing environmental, societal, and economic challenges. By making cities smarter, we can overcome some of these challenges and make cities better places to live. One report by McKinsey Global Institute found smart city technology can improve key quality of life indicators – such as the daily commute, health issues, or crime incidents – by 10 to 30 percent.
Examples of ways in which cities have embraced technology to be “smarter” include:
- Transport: Public transport routes can be adjusted in real-time according to demand, and intelligent traffic light systems can be used to improve congestion. In the Chinese city of Hangzhou, an AI-based smart “City Brain” has helped to reduce traffic jams by 15 percent.
- Resources: Telefonica has been investing heavily in smart city technology in its home country, Spain. In one example, sensors are attached to refuse containers to report, in real-time, how full they are – which means refuse collectors don’t have to waste time traveling to bins that are only half-full.
- Energy: As well as investing in clean energy sources, smart cities also use technology to help closely monitor real-time energy use and reduce energy consumption. For example, in Amsterdam, homes are being provided with smart energy meters that are designed to incentivize reduced energy consumption.
- Safety: Wi-Fi connectivity, IoT technologies, and CCTV cameras all help to improve resident safety and boost incident response times. In New Orleans, for example, real-time video data from Bourbon Street is analyzed in order to better track and allocate resources on the ground, and improve public safety.
- Community: The Smart Citizen Kit can be placed in locations like balconies and windowsills to gather data on the local environment, including air pollution and noise. The data is streamed to an online platform, effectively creating a crowdsourced map of data from all over the world.
IMD’s Smart City Index 2020 again ranks Singapore as the world’s smartest city. 5 European cities – Helsinki, Zurich, Oslo, Copenhagen and Amsterdam – make the top 10, largely due a combination of digital connectivity and sustainable development, delivering both social and economic benefits to citizens and other stakeholders (business, investment, tourism, government, services).
Three specific reasons why Singapore is the world’s smartest city, according to IMD, are
- Healthier citizens make healthier cities … How a city’s leaders shape the future of healthcare will ultimately determine how the prosperity of the city itself and of its citizens. In Singapore, a key example of this is the development of Healthcity Novena – a masterplan for community-focused health in which infrastructure such as pedestrian walkways, underground car parks and outdoor green spaces exist to complement and ameliorate the citizen-patient experience.
- A house with a heart is a home … Singapore’s Housing Development Board (HDB) offers all citizens access to free public housing. Furthermore, the country’s leaders have created public housing that is more than just an apartment space; it also stretches into larger community areas that integrate liveability, sustainability and growth. More than 80% of the country’s population lives in public housing, which means the provision and administration of housing is pivotal to the identity and character of a diverse city like Singapore.
- Mobility is a shared community experience … Transportation determines much of the quality of life for residents in a smart city. In late October, the city’s Land Transit Authority (LTA) expanded a pilot area for autonomous vehicles (AVs) to cover the whole of western Singapore. The LTA is building a system of transport infrastructure in which daily commutes can integrate active mobility modes like walking and cycling with public transportation services like mass rapid transit (MRT) and buses.
Indeed, smart cities offer tech firms a “$2.46 trillion opportunity” according to Frost and Sullivan, who specifically focus on the technological implications of better urban living:
- Smart cities’ spending on technology in the next six years is expected to grow at a CAGR of 22.7%, reaching $327 billion by 2025 from $96 billion in 2019. Technologies like artificial intelligence and big data will be in high demand to combat the pandemic, with growing opportunities for crowd analytics, open data dashboards, and online city services.
- There will be more than 26 smart cities by 2025, with 16 in North America and Europe.
- More than 70% of global smart city spending by 2030 will be from the United States, Western Europe, and China. Smart cities in the US and Europe will continue spending on 5G and autonomous and robotic technologies. Almost all smart cities in the US and Europe have already invested in open-data initiatives during the pandemic. In addition, China has renewed investments in 5G, smart grids, AI, data centers, and other smart city-related areas through the “new infrastructure initiative” introduced in 2018.
- Growing demand for crowd management and monitoring in smart cities will lead the crowd analytics market to grow by 20%-25% by 2030. It had market revenues of $748.6 million in 2020. Crowd analytics can be used to access collective real-time data. It can help ensure proper public healthcare services, traffic movement, and security and surveillance services across the smart city.
- Investments in smart initiatives are expected to rise over the next two years. Smart cities have already invested in contact tracing wearables and apps, open data platforms, autonomous drones, and crowd analytics to fight the pandemic. Post-pandemic, investment in smart projects like smart grids, intelligent traffic management, autonomous vehicles, smart lighting, e-governance services and data-enabled public safety and security will gain traction.
Beyond smart cities
However there is much more for cities to be “smart” about. Cities like Amsterdam seek to embrace “doughnut economics” guided by ecological and sustainable living (as first described by Kate Raworth). Amsterdam’s new City Doughnut Strategy has been galvanised by the pandemic, and the need for communities to be more.
And cities aren’t necessarily the answer. I worked recently with Orascom in Egypt who are building new communities for people to escape the mass spawn of cities like Cairo. They describe their developments as “places to live, love and laugh”. El Gouna is one example of a more village-like development on the banks of the Red Sea, planned for a more human, natural, positive lifestyle.
Indeed there are many trade-offs in considering future environments, regardless of how smart they might be:
- Organised cityscapes v natural villagescapes
- Affluent havens v affordable homes
- Economic development v human wellbeing
- Inspiring architecture v functional efficiency
- Personal privacy v collaborative community
Architecture is an interesting one. While we have vanity projects like the Burj Khalifa, it has also acted to create an icon and central point for Dubai’s development. Equally Frank Gehry’s Guggenheim was symbolic in inspiring a reimagining of Spain’s old declined port of Bilbao. The same can work at local levels, and for homes.
Indeed when we get to the point of homes, what happens inside, is just as important as what happens outside.
Aritco and Springwise worked together to suggest 18 innovations that we can expect to see in our homes in 2021 and beyond. The 36 page research paper Future of the Home offers a view of how our lives at home might be shifting in light of the pandemic. Examples of innovations include
- Air purification system disguised as a piece of art
- Windows that become solar cells when heated
- Home radiator that uses infrared radiation to save energy
- A bladeless ceiling fan that kills microorganisms
- Smart circadian lightbulbs that provide personalised body clock lighting
Ultimately we create new ecosystems, whether living in dense urbanisations or more remote villages. The need to work, shop, learn, socialise, exercise, travel, and much more depends on a rich ecosystems of many different partners. These can be designed around a core idea or not, integrated or evolve more organically.
Brands will seek to influence the evolving nature of the home – brands like Amazon, (not just for shopping but everything to manage and control your home, from energy to entertainment and security), or Haier, the Chinese home appliances company who seeks to become a leader in services (give the fridge away free, then manage shopping, nutrition, cooking). Technologies will be key to accelerating this commercially-inspired change – not only home shopping and virtual working, but 3D printers will transform supply chains, IOT sensors will predict and optimise our needs, and much more.
The role of governments, local authorities, private organisations, and citizens together, also becomes key in shaping the future lifespaces which we seek. These bodies can often have conflicting goals, but can also come together with a more enlightened purpose. We need to see where and how we live with much more circular impact, on the social and economic prosperity of nations, and of society at large.