By Kaz Brecher
The price of a typical Vancouver home rose 21 percent in the past year, which somehow manages to feel quaint in the face of San Francisco’s median price-tag, now standing at $1.1 million, according to Zillow. And amid the uproar in Los Angeles around the city’s seizure of tiny makeshift homes from its homeless -- and similar situations in encampments all over North America -- it’s clear that housing crises are a symptom of much deeper economic shifts.
A global group of diverse innovators spent six months working through a process of human-centered design and business innovation at THNK School of Creative Leadership to see if harnessing the benefits of digital currencies and alternative economic systems (sometimes known as financial tech or FinTech) might offer novel ways to increase access to housing options, across the spectrum of urban dwellers.
What resulted were new proposals for public/private partnerships, mobile platforms, and on-the-ground efforts: an app that allows people in need to locate and access housing, food or medical services using controlled digital currencies; a mechanism for turning smart home data into a non-monetary asset that younger renters might use as currency to secure housing in intergenerational communities; and a specialized agency that matches a broad range of citizens with high-impact social venture investment opportunities that directly benefit their cities. The complete findings can be found in the recently released Future of Capitalism Innovation Report, but the factors that went into shaping the outcomes are almost as important as the insights themselves.
In our increasingly complex and rapidly shifting ecosystem, THNK stakes its success on carefully framing audacious challenge lenses, setting broadly diverse minds loose on the issue, and adhering to a rigorous structured approach to creativity. In examining the future of Capitalism, it became clear that environmental factors must be considered when addressing housing, for example, as buildings are some of the biggest offenders in climate effects and energy efficiency has direct correlation to affordability. So, while some may think it’s the set-up to a joke, we’re deadly serious when we say that the CIO of a bank, a real estate developer and a media producer got together to create a Social Investment Banking exchange to shift some of the market forces. And THNK also throws Innovation Partners into the mix who are already playing in these spaces, like the city of Vancouver and the Digital Finance Institute, as well as Master Practitioners who shake up systems as a matter of course.
“What gets me energized is the prospect of rewriting today’s chaos to harmonize with what we need socially, culturally, and environmentally. It’s not enough to ask whether there could be a different kind of capitalism. We ought to think bigger, and reconstruct capitalism as an entirely new paradigm,” said Sharon Chang, a THNK Challenge partner.
One of the promising concepts, Homegrade, began as a property management approach that specializes in efficiency upgrades, allowing owners and renters to enjoy reduced costs and an opportunity for earned equity of low-carbon housing. But a more holistic view of urban housing included having the company work with renters in low-income units interested in learning to implement and maintain the upgrades as a means of developing a network of stewards as well as providing job opportunities with existing communities.
Simply, Homegrade would shoulder the costs of identifying, implementing and maintaining the upgrades. Once complete, the utilities savings are distributed between the building owner, Homegrade, the investors who put in the initial investment, and the renters – who receive special equity accounts. Each month, renters can accrue equity as the result of a spectrum of upgrades, from simple savings on things like switching to energy efficient light bulbs all the way to net-positive buildings.
Solutions like these touch on the many challenges facing city dwellers and municipalities alike. But, the wellspring of innovation draws from an enthusiasm for engaging sophisticated human-centered design, benefitting the individual and the system, said urban designer Pamela Puchalski, who was on the Homegrade team and leads the Resilient Communities Program at the New America Foundation. So, it’s no wonder that the Vancouver City Council has just approved the creation of a $1 million Building Energy Retrofit Fund to support and expand programs that result in energy efficiency upgrades for buildings while improving quality of living for citizens.
“Nearly 10,000 new affordable rental units have been approved over the past five years, but they take time to build and are only now starting to come through the construction phase to completion,” said Mukhtar Latif, the chief housing officer of the City of Vancouver. “While this supply is being created, the existing low income housing, such as the Single Room Occupancy Hotels, where tenants were paying rents at income assistance levels, are becoming more expensive, leaving those on income assistance with fewer options. Digital currencies might help people on low incomes earn through positive actions and improve their quality of life, as even $200 a month can make a huge difference in the potential affordable housing options for someone on income assistance.”
The insights and solution spaces captured in the first Future of Capitalism Innovation Report are currently being expanded upon with an added focus on coastal climate resilience and how digital currencies might help communities thrive. It is increasingly clear that our most vulnerable populations are at the mercy of not only our economic markets but also increasingly volatile climate effects. So, as we frame our next Innovation Challenge at THNK, we are inspired by the way our participants and partners envision a future of possibility.
Christine Duhaime, co-founder of the Digital Finance Institute, noted: “We launched the first financial inclusion program in 2014 to bank refugees and explore how we could use FinTech like the Blockchain and Bitcoin to provide emergency payments to refugees in a way that eliminates leakage payments and administrative fees … Developing FinTech in Vancouver is an exciting prospect for us, especially because of its global application. As Innovation Partners in the THNK challenge, we discovered that there were additional promises with digital currencies that emerged during the collaborative process – they have the added advantage of being able to improve housing options and accessibility.”
The potential for global application of these explorations cannot be overstated, as we see moments for sharing and cross-pollination like the United Nation’s Habitat III conference on the horizon. The conference will be the first time in 20 years that the international community, led by national governments, has collectively taken stock of fast-changing urban trends and the ways in which these patterns are impacting human development, environmental well-being, and civic and governance systems worldwide. And we hope that the role of FinTech and alternative digital currency systems will be considered as a lever for urban change.
While cranes dominate the skyline in Vancouver, building apartments amid a 0.8% vacancy rate, we feel heartened that diverse minds and innovation techniques mean the sky is the limit for how we might harness seemingly fringe financial mechanisms to create equitable, vibrant urban futures.
Image credit: Pixabay
After years working with emerging technology platforms and solving larger cross-disciplinary problems in the digital agency space, Kaz Brecher, earned her stripes in the start-up world, leading strategy and operations for early social media innovators and then an open-source cloud computing powerhouse focused on the developing world. She founded Curious Catalyst to marry investigation with action, bringing a new take to the business of urban social impact through her experience in agile approaches. She is a Stanford graduate, an alumni of and lead faculty at THNK School of Creative Leadership, and a Certified Scrum Master.