Property Development In Smart Cities

30/11/2016 4:48 am

Smart CityTechnology is critical in a modern city. Not simply because tech brings investment and employment, but because successful cities have always thrived on the disruption new technology brings.

A “smart city” is one that utilises the advances of modern technology to transform its infrastructure and make better use of energy, resources and services. The Smart City planning theory relates to digital technology and intelligent design that have been harnessed to create smart, sustainable cities with high-quality living and high-quality jobs.

Smart City planning seeks to implement the following core values in strategic plans:

  • Liveability: Cities that provide clean, healthy living conditions without pollution and congestion. Along with a digital infrastructure that makes city services instantly and conveniently available anytime, anywhere.
  • Workability: Cities that provide infrastructure to compete globally for high-quality jobs – energy, connectivity, computing, essential services.
  • Sustainability: Cities that provide services without restricting the ability of future generations to provide for themselves.
  • Internet of things (IoT): IoT applications provide cities with new capabilities, including the ability to remotely monitor, manage and control devices, and to create new insights and actionable information from massive streams of real-time data.

In April 2016, the federal government launched its Smart Cities Plan with the intention that it will help build an innovative and prosperous nation.

The Australian Government intends for its Smart Cities Plan to be a framework for cities across the nation.

The plan has three pillars: smart investment, smart policy, and smart technology. The government is committing $50 million for infrastructure planning through the Smart Cities and Suburbs Program, establishing an Infrastructure Financing Unit, and partnering with state and territory governments through “City Deals”.

The state and local governments are working with the federal government as well as introducing Smart City legislative reforms to encourage growth. The federal government’s Smart Cities and Suburbs Program will support local governments to fast-track innovative technology solutions that will improve long-standing urban problems.

These government programs can create enormous opportunities for an astute property developer. Some initiatives that we’ve seen government bodies offer include:

  • Streamlining the planning approval process for development proposals in particular through red tape reduction, modified planning processes, improved infrastructure, engagement with industry groups and community consultation
  • Reduced stamp duty on off-the-plan apartment purchases
  • Favouring urban renewal over urban sprawl, ensuring medium-density to high-density developments are encouraged through zoning and density control changes
  • Greater building height limits of buildings in some city locations
  • Grants and funding opportunity initiatives
  • Simplification of land acquisition and disposal policies and site development
  • Changes to liquor licensing legislation to stimulate growth of bustling entertainment quarters.

The bottom line is that cities adopting Smart City planning are trying to attract investment in their cities and hopefully job growth as well as greater living conditions. Smart developers and real estate investors can capitalise on the opportunities created by smart city initiatives. However, make sure the city is really implementing initiatives that will result in the growth of real estate market fundamentals and not just jumping on the next urban planning trend. Over the years, we’ve seen many planning theories permeate into strategies from TOD Cities, Green Cities to Smart Cities.

Now more than ever, digital technology and the exponential growth of data are transforming every aspect of the economy, communications, politics, the real estate market, and individual and family life. The implications are generally profound for developers and real estate investors.