You are viewing 1 of 2 articles without an email address.


All our articles are free to read, but complete your details for free access to full site!

Already a Member?
Login Join us now

Planet Smart City’s ‘operating system’ vision for affordable housing

Planet Smart City is making waves, with big investment and large-scale housing developments. SmartCitiesWorld finds out more.

LinkedInTwitterFacebook
Smart City Natal, a 170-hectare development in northeast Brazil
Smart City Natal, a 170-hectare development in northeast Brazil

Unprecedented growth in many cities has made affordable housing a challenge around the world.

 

A 2018 study revealed that of 200 cities polled globally, 90 per cent were considered unaffordable when applying the standard of average house prices being more than three times the median income. The United Nations has flagged housing affordability as an issue of strategic importance for “development, social peace and equality,” citing 1.6 billion people living in inadequate housing.

 

Planet Smart City is on a mission to transform the way affordable housing is delivered, through integrating replicable smart technological solutions into large-scale projects.

 

Earlier this month, the company completed its latest round of capital fundraising, securing €24 million from existing and new investors, taking the total amount raised since the company’s inception in 2015 to €100 million.

 

Planet Smart City already has two ‘mini-city’ developments in Brazil, another in the pipeline and has its sights set on India and beyond.

 

Planet Smart City already has two ‘mini-city’ developments in Brazil, another in the pipeline and has its sights set on India and beyond.

 

Alan Marcus, Chief Digital Strategy Officer, Planet Smart City, told SmartCitiesWorld the developments are aimed at professionals on low incomes who typically might not be eligible for a large enough mortgage to buy a home.

 

“There are huge amounts of unmet need,” he said. “When you look at that gap and see the value we can create, we think we have a differentiated product in a very, very large market."

 

Expansion

 

The new funds will be used to finance the company’s ambitious growth plans, which include the launch of 30 large-scale residential projects by 2024, with eight projects underway by the end of 2020.

 

Projects such as Smart City Laguna, which the company calls “the first smart affordable housing project in the world” and Smart City Natal, both in Brazil, are being developed by Planet Smart City from the ground up.

 

Phase one of the 330-hectare Smart City Laguna project is complete, with the development of 90 hectares and all 2,700 housing lots sold. Phase two aims to see 1,800 houses built, bringing the population of Laguna, 55 miles from the city of Fortaleza, to 25,000. The first 100 residents have moved into Laguna, with 1,000 expected by the end of the year. The Natal development will be over 170 hectares of land, eventually providing housing for 15,000 people, with 700 houses to be built over the next three years.

Planet Smart City also works in partnership with developers elsewhere, including the REDO “smart social housing district” in Milan (funded by the Lombardy Real Estate Fund and managed by InvestiRE SGR), to integrate technology into existing developments. It recently launched advisory services in India, following a partnership agreement with Kolte-Patil Infra-tech, a subsidiary of real estate developer Kolte-Patil.

Smart City Laguna, being built by Planet Smart City for 25,000 people near Fortaleza, Brazil
Smart City Laguna, being built by Planet Smart City for 25,000 people near Fortaleza, Brazil

Building an experience

 

Prices for Planet’s properties vary depending on the development, plot and location. The company says homes in Laguna can start from R$45,000 (approx. £8,253) for a 195.18m2 plot.

 

The average salary in Brazil is approx. R$136,000 per year, with 25 per cent of the population earning R$67,000 or less.

 

Marcus describes the housing developments as being like “the quintessential American suburban neighbourhood you see on TV, where every house looks the same…lawns are manicured; the sky is always blue.”

 

“That’s not reality – but the feeling you get when you see that, that’s the feeling we believe our residents are getting,” he said. “For them, it’s absolutely utopia.”

 

Rather than simply building houses, Planet Smart City has the ambition to create an “experience”.

 

“Physical buildings are becoming less important,” Marcus commented. “We certainly see this with millennials but even the elderly – they’re looking much more at the experience. And young starter families who don’t have a lot of money; they want to live in a community where they feel engaged.”

 

To make this a reality, Planet Smart City has an ‘operating system’ vision for affordable housing.

 

This includes the integration of smart technologies such as networks, home automation, air quality control systems, security and more, managed via the Planet Smart City app.

 

“When you really look at optimisation and using technology in your build processes, and when you look at the kinds of services that a low-income community needs and are willing to pay for, you can see that the cost to build is not that much higher,” Marcus said. “And that the ability to bring more revenue in on top of that can balance out [the] cost differential. If you’re a traditional builder, these are concepts that are quite new to you.”

 

“We want our ‘operating system’ to bring value to people in a way that allows them to feel more in control of their lives – in low income, this is a big deal."

 

He gave the example of energy management: “Simple things like being able to predict your electricity use [are] very important if you’re on a budget. We can deliver that for free [via the app].”

 

Energy reduction solutions could then be offered as a “value-added service”.

 

“If I can save you 10 per cent on the electricity, and I collect 5 per cent of that as my service fee, that’s pretty good,” Marcus explained.

 

“We want our ‘operating system’ to bring value to people in a way that allows them to feel more in control of their lives – in low income, this is a big deal,” he added.

 

The company is also capitalising on economies of scale. Planet Smart City’s catalogue has more than 200 smart solutions which make up their developments. It also uses supply chain analysis to source, transport and use materials in the most efficient way. It even built a factory on-site in Laguna to cost-effectively produce the paving blocks for roads.

 

“We work with [solution providers] in terms of costs and homologation, and other factors that are necessary to build. If you do it at one place, you can then pretty much do it everywhere,” Marcus said.

 

In a recent blog post, Cristiano Radaelli, chief innovation officer, Planet Smart City, noted how communities can be improved over time. “At district-level, through the use of AI and big data, we can better manage energy usage across a wide number of houses, which can then be used to negotiate better contracts for residents, saving them money on their day-to-day living. This technology also supports, for example, the design of electrical grids according to the real requirements of residents.”

 

Community

 

Greenfield smart city projects, such as Songdo in Korea, have sometimes been accused of being “soulless” and lacking in community. Janaína Campoy, Chief Communications Officer, Planet Smart City, says Planet’s developments are not just about smart technology but also “social innovation", including community ‘hubs’, such as the one in Laguna which includes classes and business courses, a cinema and library. Community managers are also installed in the developments.

 

“The community is taking shape, becoming more and more lively,” Campoy said.

 

Planet Smart City’s high-tech vision comes at a time of growing concern about the use of personal data – particularly in the most intimate spaces, our homes.

 

Marcus said: “In order to provide services, data is exchanged everywhere. That’s not new, that’s not even digital; that’s always been. So if they want the service, they’re going to provide the data and if they don’t want the service, we’re not collecting the data.”

 

He said potential residents he speaks to are more concerned about whether they will have access to doctors, transportation and education.

 

“They’re not worried about how we’re using data,” Marcus commented.

 

Following its first two Brazilian projects in Laguna and Natal, Planet Smart City recently announced a new project in Sao Paulo, the largest city in the Americas by population. The initiative will create 2,500 apartments with integrated smart solutions.

 

The company also plans to expand its operations in India this year, in line with its growth strategy to operate in geographies with large housing deficits.

 

“The biggest markets in terms of that gap are Brazil and India,” Marcus said, noting: “There are other markets but we are still a start-up so we want to be careful about where we’re growing.”

 

However, he said the company would be potentially interested in expanding to any countries with an affordable housing gap as long as the regulatory and environmental conditions are right to facilitate the development.

 

Planet Smart City is in discussions with potential partners in the United States and is exploring land opportunities in the UK, Campoy confirmed.

 

“But if we just do Brazil and India, we’re going to be a very big company,” Marcus said.

 

You might also like:

LinkedInTwitterFacebook
Add New Comment
You must be a member if you wish to add a comment - why not join for free - it takes just 60 seconds!