More on the Future of Cities

As you know, Fifth Wall’s portfolio event was last week in Venice. There were three panels held at their office, each covering a category Fifth Wall has made big bets on (the majority of panelists were from portfolio companies):

1. Future of Cities
2. Real Estate-as-a-Service
3. Fintech and The Built World Economy

I covered the Fintech and Built World Economy panel last week, today I wanted to share a few thoughts from the Future of Cities panel. Smart cities and the future of cities are topics extremely fascinating to me, and one I spend a lot of time thinking about. Without further ado, the context:

Examining the future of housing, energy, mobility, social services and shared public spaces through the lens of those engineering it.

In other words, topics such as an aging and shrinking population, Amazon-ization, autonomous cars, drones, and flying cars.

Moderated by Steve Levine at Axios.

Panelists:

• Johanna Greenbaum, Director of Planning and Development at Sidewalk Labs
• Toby Sun, Co-founder and CEO of LimeBike
• Ben Marcus, Co-founder and Chairman of Airmap
• Sari Ladin-Sienne, City of Los Angeles
• Claire Woo, Co-founder of Blueprint Power

Claire talked about a smart city being sustainable, resource conscious, and placing an emphasis on accessibility (meaning the participation of all socioeconomic backgrounds). Blueprint Power‘s mission is compelling: “accelerate the transformation of buildings into intelligent power nodes, allowing them to participate in transactive energy marketplaces.” She believes buildings will become power plants; owners will be able to sell power to their neighbors as part of a much, much larger transformation of the electric grid. While we’re on the topic of power and sharing, I’m reminded of Yeloha, a company on the residential side of the industry I wrote about a few years ago. I have to admit I had never thought about the prospect of buildings as small power plants, but conceptually it makes complete sense.

Ben believes cities will become airports, saying in 50 years we’ll all be going to to work in flying cars. I don’t disagree with that, or with his point that de-urbanizing cities presents a huge opportunity (I’ll say ginormous) . Within 5 years: people will benefit from drones in their daily lives (for deliveries likely). Governments are moving from a role providing services to that of enabling private enterprises to provide those services. We need to re-think governance; we simply can’t continue as we have previously with pace of technology. Airmap will end up helping in that effort by connecting airspace authorities with the drone ecosystem to unlock safe, efficient, and scalable drone operations.

Toby Sun from Limebike referenced the three core aspects of smart cities from his perspective:

1. Smart devices: infrastructure in place
2. Smart censors: not just for individuals, but objects
3. Data: allowing everyone to make better decisions

In the next 5 years, we’ll see progress toward smarter cities (every block will have block level transit options/accessibility), but not a truly transformational change. In 50 years, he believes cities will be much more eco-friendly — while I agree with that change/shift, I unfortunately think a catastrophe of some sort will be needed to drive urgency.

Sari Ladin spoke about Los Angeles being a postmodern city comprised of many “mini cities.” Smart cities are more responsive, proactive, and inclusive (include network & connectivity in most vulnerable communities). Los Angeles has used data to make better decisions. One example was in the sanitation department where they reduced dirty streets by 80% (300 miles originally, now less than 100 miles). In 5 years, she sees a multi modal system way more effective than today. In 50 years, procurement will be solved, and regulations will provide significantly more flexibility. Sari mentioned the “Great Streets” initiative (see here), which I find very forward thinking. I happen to believe brokerages should be collaborating with their cities on similar initiatives, a topic I’ll likely cover in the Geek Estate member newsletter in the future.

Johanna from Sidewalk Labs is working on the Toronto smart city initiative (which was covered previously on Geek Estate). She’s right, there has been a change in behavior and people are giving up cars (in markets like Seattle where I live). I’m proof of that, as I haven’t owned a car since 2012 (though I’m looking at buying a car soon). That said, a shift/sea change takes time to occur. Johanna was asked, “are there flying cars in Toronto Plan?” While we didn’t get a precise answer, she mentioned buildings last a long time, and the most important thing is to maintain flexibility (so as to support flying cars when/if they do become the norm). Sometimes, over engineering can add long term value to real estate assets. My personal hunch is this will be one of those scenarios.

The panel ended by talking about whether there is a fundamental tension between efficiency/technology and human desire (and need) for human interaction and connection. Demograhically, this generation is interested in being closer together. Johanna said that technology in smart cities shouldn’t mean being more connected to our devices. Since I believe screen addiction is one of society’s greatest challenges and risks, one of the most fascinating tidbits from the whole panel for me was learning that a “Minister of Loneliness” was appointed in the UK (New York Times article). That validates loneliness and screen addiction as a huge, huge problem. How can we balance efficiency with social interaction? That’s a multi billion dollar question.

Cities are changing and morphing, slowly, but surely. Are they truly “smart” now? No. Are they getting “smarter” by the month? Yes.

Disclosure: Fifth Wall is a client.

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