Affordable Cities: Better Living through Blockchain By Luke Sheehan

Planning cities and creating houses is a problem that grows more complex as populations swell and move to cities around the globe. There are more and more instances of startups and big players utilizing cryptocurrencies and blockchain to influence the process. Investment, the construction of new houses and management of new developments are the main areas of intersection between this lumbering industry and the new technology.

Affordable Cities

Crises multiply, in every corner of the world. In Ireland, thousands of people are requesting emergency accommodation, with rising rents an unfortunate side effect of a thriving economy; the tech sector is placing extra pressure on central Dublin.  In London, the housing waiting list contains hundreds of thousands of names, while for the whole of the country only six and a half thousand new houses were built in 2018.

The complexities of traditional real estate financing and bureaucracy are often blamed.  Liquidity problems hamper both those who want to place investment and those who want to take out money they have put in. In the ‘developing’ and ‘developed’ worlds alike, and in places that don’t seem to fit that clumsy binary, such as China, entrepreneurs are assembling a potential set of solutions.

In the world of blockchain, Ethereum still sets the standard for intelligent experimentation. Consensys has publicized a flowchart marking the logic of tokenization, a key part being the ‘fractionalization of assets’. Of all asset classes that can be fractionalized, real estate is beginning to seem like a primary candidate. Houses in big cities are relatively secure assets, and the notion of tokenizing property has been around a while. Real estate moves a lot slower than crypto, and it is only now that actual iteration is happening.

The Blockchain

Of course, blockchain and the crypto economy need some serious pushing to attain equilibrium – not surprising then that several projects, from Kenya to the United Kingdom, have political actors at the forefront. Land use is always tricky. Governments, with the power to make things happen by ‘fiat’, may also contribute an element of enhanced public trust.

In Kenya, officials declared last year that the Immutable Ledger system of blockchain would help to ensure that funds and rights allocated to a large scale social housing development would not be misappropriated. We await the results of this endeavour.  At the same time, it is interesting to note that that nation’s central bank is resistant towards cryptocurrencies.

A pattern of ‘yes to blockchain, no to crypto’ applies likewise in China, where the government has been openly cultivating research in IL applications like the authentication of goods (useful in such a fake-swamped market), ID records, medical database management and trade and transport logistics – all, while moving to ban cryptocurrencies by degrees, as we wrote in an earlier Irish Tech News article.

The Chinese blockchain projects that endure tend to be backed by the government. Beijing-based AI and blockchain startup Matrix AI has been active in bi-national collaborations in Kenya, applying AI and Big Data tools in a Nairobi rail hub whose upkeep will be part of the PRC’s national ‘one belt one road’ scheme.

As these infrastructure corridors spread outwards from the PRC in future, blockchain logistical tracking, along with some form of digital currency – and tracking of individuals, to be sure – may well come as part of the package, fully stamped with Beijing’s approval.

In large-scale public-private partnerships, the private partner tends to be an established consortium hefty enough to deal with the state’s requirements. Yet the emphasis on massive contracts has also been deleterious for civic trust.

Take Lebanon, for example: after that state’s grisly civil war finally ended, with the Taif Agreement in 1989, it was Saudi Arabian money, siphoned through a single construction company, that performed much of the rebuilding. The blatant vested interests on display – as Rafik Hariri became prime minister and awarded contracts to his own company, Solidere – set the stage for his assassination and lasting unrest that ripples onwards to this day.

Pressures in wealthy urban centres and unpredictable shifts in the digital economy are affecting the fates of people from Jakarta to London to Vancouver. In the West-coast Canadian city, which is “drowning in Chinese money” according to Bloomberg, homelessness and precarious access to housing have been a persistent problem, as foreign wealth appropriates large swathes of the town’s property.

Across ‘stable and safe’ Canada, the need for new affordable housing has of course not escaped the politicians. Ontario Premier Doug Ford spoke out on the issue this month to declare effectively that cutting red tape for state’s established developers (local money) would help resolve the issue.

Yet within the disruptive mechanics of cryptocurrency may be hidden a fistful of alternatives. The classic problems in the property market seem to reach out to the hyper-transferability of crypto, while the latter desperately needs to be rooted in more transfers of goods and secure assets. Necessity is the mother of invention. Indonesia, where access to cash and banking is a serious problem, produced the crypto-POS manufacturer PUNDI X.

Two multi-million dollar startups, Meridio and Reitium, the latter founded in Vancouver, have created high-value dollar portfolios of real estate which crypto investors can participate in through smart contracts. Thus far, these experiments have focused on the high end of the property market

What about the actual building of houses? The UK and the Republic of Ireland are not lacking in space. In both countries, the need for decentralization is a pressing issue that should be addressed by government and industry alike.

In future, the option of remote work and swifter Internet via 5G are likely to increase competitiveness and productivity. As workers will have fewer excuses for bosses (slow connections) so bosses ought to have fewer excuses to prevent people living and working from outside the hyper-price-inflated city centres. New, well-designed homes at reasonable prices around the underdeveloped areas of our nations will be an important support for that.

In the United Kingdom, crypto property development startup BRIKCOIN is seeking to join public investment through tokens – be it macro- or micro-scale –to local government partnerships, with the ultimate goal of creating long-term rental homes. In cases like these, a tangible market normally dominated by large money is opened up to investment from anywhere.

Perhaps Canada’s crypto-economic innovators in future could lead the way in changing how problems of housing are dealt with – with fellow citizens’ rights to housing being a priority.  After all, with winters like they have, the value of a roof over one’s head is hard to overestimate.

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