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Build to Rent and the sharing economy

Helen Gray • 04/08/2022

How facilitating greater sharing activity within Build to Rent schemes can help build a sense of community from the ground up.

 

One of the most exciting global trends of the last decade has been the rapid evolution of the sharing economy, which could be worth £140 bn by 2025[1]. This has instigated a radical shift in consumer habits across a variety of sectors, such as transport (Uber, Zipcar, etc) and real estate (Airbnb, Couchsurfing, co-working etc), as well as collaborative consumption platforms, for example in entertainment (Netflix, Spotify, YouTube, Soundcloud etc.) Other strands have also emerged in energy and finance, amongst other sectors.

While this sweeping economic shift has not been without controversy, it has unquestionably demonstrated an alternative economic model that better utilises resources, potentially lowering aggregate consumption – an environmental win – that also empowers consumers with more choice, more flexibility and potentially a more diversified income.

While Build to Rent is arguably already part of the sharing economy in its essence, it might not currently be mature enough as an asset class to push further into more flexible leasing – at least not in the UK market – but there is potential for the sector do more to facilitate sharing activity within schemes. This doesn’t have to be management intensive, with more efficient digital platforms emerging all the time, and it could have considerable upside from a community perspective.

The main opportunity areas lie in the sharing of physical assets amongst residents, and the sharing of skills and talent. In the case of the former, firms like Tulu are already proving popular, with large ‘vending machines’ that provide residents with everything from vacuum cleaners to home theatre projectors. This demonstrates the case that tenants are fundamentally open to borrowing or renting appliances rather than making expensive one-off purchases. However, rather than eating up valuable real estate to store these – while also missing an opportunity to create greater interaction amongst residents – there could be an opportunity for tenants to post their own items onto an scheme-specific digital platform.

Perhaps some tenants would be happy to share (or even rent out) the camping equipment that only gets used twice a year, the retro fondue set that seemed like a good idea in Lockdown No.3, or last year’s sports fad, which could be this year’s sports fad to their next door neighbour. These physical assets would still be stored with the tenant, but for other things – a small gardening area for potting herbs and plants for their balconies, for example, or a pop-up library – could be located more centrally and presented in fun and imaginative ways that don’t have to dilute the scheme’s carefully curated aesthetic.

This could have a huge cumulative impact. For example, The Library of Things (which was established via crowdfunding; sharing economy through and through) now has ten locations across London and together, borrowers have saved more than 50 tonnes of waste from going to landfill by borrowing rather than buying. The relative ease with which this could be achieved in large Build to Rent schemes across the country could accelerate these environmental wins, in addition to the community benefits.

At a more every-day level, mainstream apps like Olio are making food sharing within a neighbourhood incredibly easy, providing timely free food for some, while reducing food-waste guilt for others. In the UK, the average family throws away over £700 [2] worth of food each year. With over 6 million users (half of which are in the UK) Olio has saved over 57 million portions of food, and the equivalent 170 million car miles. This works best at a hyper-local level; 81% of people have said they would be happy to receive food from a neighbour. This could be huge in Build to Rent schemes.

In terms of sharing skills, the opportunities are endless. Residents could post their talents online – or perhaps even better, on a ‘real life’ notice board. These could include teaching each other new languages, cooking skills, dog-walking, baby-sitting groups, hair-dressing, urban gardening, DIY (not on the building folks!), crafts, creative writing, fitness, meditation, graphic design – the list is long, reflecting the broad skill base that is no doubt present in these larger developments. While it won’t be for everyone, there could well be a latent desire amongst some residents to get to know each other more, to learn niche skills, and to share each other’s gifts. This could be for an additional income, or simply as a way of contributing towards a growing community; similar to the Burning Man festival in Nevada, just without camping in the desert.

A significant number of studies have been carried out on what makes for good ‘placemaking’, and what can help create a sense of community in new developments. Many find that one of the main factors is when residents feel invested in the community and therefore take up the baton in organising things themselves (as opposed to a more ‘top-down’ approach that can sometimes feel slightly forced or sterile). This isn’t a revolutionary concept – many small traditional villages still operate in this way – but by helping create a sharing culture within these schemes, operators can create a modern, urban equivalent. This will help foster greater interaction between residents, build a sense of trust, and ultimately a sense of belonging. While this is great for renewal rates and therefore operational costs, it also genuinely seems to be at the heart of what so many investors and operators are trying to create: sustainable communities.

For more information on our Build to Rent consultancy and the services we offer, please contact Helen Gray.

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