A recent report recommending massive change for the homebuilding industry reveals that upwards of C$1.5 billion has been invested in Canadian property technology (PropTech) start-up companies involved in sustainable construction, smart cities, asset management, and research/analytics.
While the numbers may be impressive, more important will be the need for technology advances to continue in order to meet stringent global sustainability goals, the report states, noting that “it is safe to say that climate change is the defining issue of our generation.
“We have known for decades about the disastrous effects of climate change, yet we have struggled to curtail greenhouse gas emissions in a way that would prevent us from going over a tipping point of a 1.5°C increase in global temperatures.”
According to a release, while the real estate industry has traditionally been slow to incorporate new innovations, that is rapidly changing with the introduction of new technology, products and services that are not only making the property sector more efficient, but also creating opportunities for it to be more sustainable.
An example of that is the C$326 million invested in companies involved in the country’s sustainable construction segment, which the release states “could help towards addressing affordability for new home purchasers as well as a myriad of environmental concerns.”
Close to C$1 billion (C$905 million) has been invested in companies involved in smart city advances, C$187.5 million in asset management start-ups and C$77.5 million for companies involved in analytics and research.
The report is the work of Sustainable PropTech, a think tank comprised of representatives of the real estate and technology sectors, which describes itself as a “a meeting of minds where you can learn, connect, collaborate, and create the next generation of PropTech.”
Deena Pantalone and Joanna Creed, who co-authored the document, say that “new technology, products and services are not only making the property industry more efficient, but also creating opportunities for the industry to be more sustainable.”
The two founded the think tank after Pantalone, who is a partner with National Homes, a real estate developer and builder based in Vaughan, Ont., launched Venturon, an investment firm for real estate technology start-ups, in 2016.
“With my development and housing background I saw a gap in the industry as it related to sustainable PropTech ecosystem and the built world,” she says. “I created Venturon to bridge those gaps between developers/builders to filter through and identify best in class property technology.”
Sustainable PropTech, says Pantalone, “connects the built world of real estate with sustainability experts, tech entrepreneurs, investors and fresh thinkers. When it comes to protecting the planet, time isn’t on our side. That’s why our clear mission is to accelerate the achievement of sustainability goals.”
Creed summed it up this way in an interview: This space is moving incredibly fast and there is a lot of new technology advances being created. She also referenced an observation contained in the report from Elliott Cappell, the national climate change leader at PWC Canada, who said, “what is leading-edge today will be middle of the pack tomorrow.”
Other key observations come from Dr. James Mckellar, a professor at the Schulich School of Business’ Brookfield Centre in Real Estate and Infrastructure.
PropTech, he wrote, is not about solving Canadian problems, but about addressing challenges that reside in cities across the globe.
Describing it as a growth industry with huge upside potential, he wrote that “prioritizing economic growth along with environmental and climate policy means committing to infrastructure and buildings that can reduce carbon emissions.”
They can, added Mckellar, also promote energy efficiency, increase the use of renewables, convert forms of transportation to electrification, promote clean-energy technologies, utilize renewable energy sources, and make cities more climate resilient.
And while he maintains that “Canada is a relatively wealthy country with high levels of education and a skilled workforce, one might expect us to be a leader in PropTech, but we are not yet there.
“We look to Europe. Why? The answer is in the underlying personal values and political mandates these societies have adopted to move quickly into a carbon-free world.
“Could we see ourselves placing a structure incorporating a waste incinerator in the middle of Toronto? Copenhagen has done this with CopenHill, a waste-to-energy plant encompassed by an artificial ski hill that is one of the tallest structures in a very dense part of the city. It claims to be the cleanest waste-to-energy plant in the world.
“CopenHill is PropTech at its best. This initiative represents the new frontier where real estate, infrastructure, and technology converge to better serve society.”
Creed, meanwhile, says that in terms of sustainability, Europe leads the pack from a regulatory perspective and while Canada has fallen behind, compared to the U.S. it is ahead.
“Our rationale for the report is that we believe Canada punches above its weight class in terms of real estate. Many of the world’s largest real estate companies are based here and Canada has a very highly educated population that’s constantly growing. It also has a huge tech sector and a grid that is relatively clean and getting greener each day.
“All these things have come together to allow Canada to lead the pack if we can coalesce a community and collaborate to solve the decarbonization problem.”
A copy of the report can be obtained via the following link. Registration required.
This story has been updated in order to clarify that Deena Pantalone is a partner with National Homes.