Labour or Conservative, all of our plans for the housing crisis are an anachronism
All of our plans for the housing crisis focus on old-school analogue solutions in a digital age, writes Michael Beckerman.
In the past few months, we’ve seen political parties announce a new solution to tackle the housing crisis every week. At the end of May it was Labour’s turn when it declared it would end the “hope value” – the value of land that assumes that it will achieve planning permission – in compulsory purchase orders by local authorities. The idea being it would make it cheaper, and easier, for local authorities to buy land to force through new housing. Earlier this month it was Housing Secretary Michael Gove taking up that idea and inserting it into a broader plan to fix housing and build new, “beautiful” homes.
As someone with a more distant yet deeply affectionate perspective, based in the US although visiting London as often as I can, it can be more than a bit frustrating. Not that politicians are seeking to tackle the housing crisis – but that the vast majority of what some are suggesting is so analogue in a digital age.
So many of our societal problems, from the housing crisis to the climate catastrophe, are interlinked. At the beginning of July, the UK’s energy price cap was lowered – but households aren’t expecting to see much benefit. UK homes are among the draughtiest in Europe, and energy security is still so very far from being properly in place. Look at another news story recently: Ukraine has completed more wind turbines than the UK in the past year.
This is not unique to the UK. In New York, over 15 per cent of the population faced energy poverty in 2019 according to analysis by the Manhattan Institute. Likewise, more than 70 per cent of New York City’s greenhouse gas emissions are from the built environment.
What we need is more investment in technology. Tech ensures we aren’t siloed in tackling some of the biggest challenges we face in London, New York or anywhere else.
There is a lot of clever capital going into climate tech right now. According to HolonIQ, in 2022, more than $70bn was invested globally into climate technology solutions. That’s up 89 per cent in 2021 and 40 times larger than a decade ago. Meanwhile, climate tech focused on the built environment attracted a record $9.7bn across more than 330 deals (up 56 per cent year-on-year). But there is still a mismatch. The built environment is responsible for around 40 per cent of carbon emissions, yet attracts less than 14 per cent of climate tech funding. That means there’s a huge opportunity to invest in the tech that will address a huge chunk of global emissions.
Thankfully, the smart money is going somewhere. There is a burgeoning ecosystem of tech start-ups that are already making an impact, helping London to build new homes and to tackle its carbon emissions.
A couple of shining examples for you. Modulous, which is backed by developers such as Regal London, aims to eliminate the global deficit of 500 million homes while improving housebuilders’ efficiency. It does its magic by using artificial intelligence to identify the feasibility of sites, looking at patches of land to identify in seconds how exactly a sustainable development with minimal waste can be created on site. In London, with the need to develop on brownfield sites, it could be a gamechanger.
When it comes to existing homes in the city there’s the likes of SimplyPhi which enables public sector bodies and private companies to acquire new homes at economies of scale, which in turn can increase professionalism of the rental experience for Londoners and identify improvements on environmental efficiency.
These are just a few of the tech start-ups that are making an impact on the housing and the climate crises. There are numerous others that could go further, faster, if more investment was secured.
What gives me hope is that the solutions are out there. There are tech firms doing brilliant work and that, by addressing these challenges, will make a lot of money in doing so. Investors ought to plough into climate tech and set the tone for politicians to follow.