News from the front desk: Issue No 330 – On disruptors
16 March 2017
On disruptors – from energy to social cleansing, and what’s wrong with art galleries in working class neighbourhoods?
Sara Neff from US company Kilroy Realty Corporation not only captured the imagination at Green Cities last week she also pinged the zeitgeist.
It was by way of a perfect king hit on the Trump phenomenon. And thereby on all the naysayers the world over who want to hold back a sane low carbon transition.
America, she said, has been taken over by a “tinted psychopath”.
“I feel sorry for my brethren in the middle of the country but in the long run I think we will probably benefit,” the feisty Neff said to a delighted audience.
“Where we get most of our funding [for sustainability] is from the states and cities and the people who run those states and cities need to do what their citizens want and they have to work with them.”
And the result?
“I’ve never seen more fire to make sustainability happen and send a message to Washington that, ‘yeah, we’re going to pass cap and trade just to stick it in his eye’.”
Phew. We’re excited!
It’s exactly what us wild and crazy optimists were hoping for after those first dark days of Trump’s election, when so many of us felt like we were stumbling around in Dante’s Inferno looking for a way out.
Now here it was: sustainability bites back
Amid all the negativity has come action, determination and some surprising turns of events that have floored the conventional wisdom.
Neff told us later that the loss of the Energy Star rating system run by the Feds in the US would be a blow, especially since it cost only US$8 million to run, but that overall there was significant confidence.
In the scheme of things, Trump’s anti climate rhetoric is too late. A finger in the dyke of progress thanks to the clean technology industries and capital markets seeking risk-minimised returns.
Silicon Valley hot shots Elon Musk and Atlassian’s Mike Cannon-Brookes, our new Aussie poster boy for the planet, have stunningly promised to solve energy security problems in South Australia within a 100 days or at no cost.
Cannon-Brookes says he has been almost embarrassed by the size and number of financial offers to help and he was a delight on the ABC’s Lateline program early in the week when he said the attention had already halved global price for battery storage. Prices would keep coming “down down down”.
Clean coal? No chance, he said. It wasn’t even a thing.
Meanwhile local companies say they can beat Tesla in price and speed to deliver the storage and AGL has offered a site that it says “100-day ready”, meaning the preconditions for a huge battery storage plant have already been met.
South Australia has suddenly gone from rust belt to renewable energy star.
SA Premier Jay Weatherill as if to emphasise the switch in brand value slam dunked the hapless federal energy minister Josh Frydenberg, who’s been egged on by the PM and the coal frat to damn the state’s leadership in renewable power.
In front of live television Weatherill said the Turnbull government was the most “anti-South Australian Commonwealth government in living history.”
It was “galling”, he said, to be standing next to Frydenberg, there to launch a federally funded “virtual power plant”, to hear about some gesture after Frydenberg and the PM had spent the past six months “bagging South Australia at every step of the way”.
“It’s a disgrace the way in which your Government has treated our state,” he said.
Tucked in there on the Great Australian Bight facing some of the more extremes expected from global warming you really don’t blame the premier for getting agitated because he wants to do something about greenhouse gas emissions.
As if to jump on the clean energy bandwagon because the tables have turned, the PM on Thursday announced that he too could do renewables, when he flagged an expansion of the Snowy Mountains Hydro scheme.
Nice touch for this man who wants to read the mood of the people… and needs to: thinking… thinking…
Property – energy efficiency is back
But back to property. Not that energy isn’t core to property and to keeping the lights on and the lifts working.
You might note/admit that energy efficiency hasn’t exactly been the easiest thing to get traction with in recent times.
You could almost hear the collective yawn when someone mentioned it.
But with steep electricity price rises on the way, that’s suddenly changed and energy efficiency is hot again.
According to Jonathan Jutsen, chairman, Australian Alliance for Energy Productivity, and one of Australia’s most respected voices on this topic, and our star interviewer last year at the All Energy conference, energy efficiency could also solve a lot of the energy security dilemmas faced by South Australia.
Energy productivity could deliver lower demand, greater demand flexibility, and cost savings to consumers, he says.
Not to mention reducing CO2 emissions.
Jutsen wonders why it’s always a supply issue that hits the headlines and gets the funding.
Saving energy may never be seen as sexy but watch this sector ramp up over coming months.
Sexy is in the eyes of the beholder.
Tenants need some nudge
Another disruptor is going on in the way owners tip toe around tenant sensitivities. But as more people are saying, so what if the top listed companies are unbelievably high achieving in their office portfolios’ sustainability? That’s all about the base buildings.
What are their tenants doing? Why aren’t the big corporates worried about being outed (by someone…) for their actual NABERS rating of their offices for all to see. Just listed, is all. Just saying.
Stockland’s Greg Johnson is refreshingly candid on the issue of tenant engagement in this field.
They need a bit of a nudge, he says.
“Building owners have done all the heavily lifting for a long time with energy efficiency and all the talk has been about what building owners can do, but tenants in the building use about half the total power consumed by the building,” he said.
Speaking strictly from his own point of view, not Stockland’s, he says, “I’ve always felt that there should be a little more attention given to tenants in a more assertive way.”
Mood disrupters – are developers nervous?
So if the conventional electricity providers are nervous what’s happening in the property world? Are developers nervous?
Maybe we imagined it, but we think there was less hubris at Green Cities than in former years, less feeling that we are “so green, so clean, so clever”.
Less patting on the back and more looking over the shoulder. As it should be in a vibrant industry alive and awake to the competition.
We reckon the more intelligent and aware might be looking with interest, if not a bit of anxiety, at the rise of alternative or community led development proposals in housing to achieve genuine diversity of product or more affordable and sustainable product.
The uberisation of property is probably going a bit far – for now – but imagine that you can see the direction these ride-share disruptors are going.
Affordable housing – not
For instance, there is some interesting development in the push for disruptors to the taxation issues around housing. Can tweaking negative gearing and capital gains tax help with affordability?
The industry has long spoken as one, much like the Minerals Council but now people are breaking ranks.
Mark Steinert chief executive and managing director of Stockland and president of the Property Council suggested it might be time to revisit negative gearing in an article in the AFR.
According to the Property Council, which holds a different view, Steinert was “speaking in the context of broader tax reform. This broader tax reform is not occurring at the present time.”
There are figures proffered by the Property Council to dispute the efficacy of tax tweaks but the point is that the people now seem to be clamouring for them.
Including influential folk.
John Symonds, founder of Aussie Home Loans, jumped into the fray after the Steinert article to back changes to negative gearing as part of wider changes.
And more recently Chris Cuffe, chairman of Unisuper called for the capital gains tax discount to be changed.
“There is no justification that someone can flip a property after a year and be taxed on only half the realised capital gain,” Cuffe said. “Let’s remove this investor tax incentive and give our children a chance.”
Property and urban planning as instruments of class division
Emotions are powerful drivers for people and especially when they go to auction after auction and see investors beat them every time.
Lobbyists can trot out any “evidence” or analysis they want but most people know that numbers can be tweaked to support a particular point of view, especially in the highly complex area of taxation and the just as complex area of the property market, where the most sophisticated economists can disagree.
What’s really important in this debate is not the numbers, it’s the sentiment, and that people seem to be figuring out that property and urban planning are class issues, or if you like, that they can be instruments of division and inequity
If you doubt this have a look at an article that appeared recently in CityLab. It’s alarming and frightening, but not just for developers.
You may have read here a few years ago about the emerging movement at Lendlease’s Elephant and Castle redevelopment in London, where sales suites were vandalised and this inner city project was nothing more than social cleansing, with long term working class residents displaced by yuppies.
In the US this movement has ramped up so much that increasingly militant and rather violent groups are attacking art galleries that set up in poor areas and their patrons. Here’s an excerpt from the article in Citylab
In May of last year, a nonprofit art gallery called PSSST was preparing to open in the neighborhood of Boyle Heights, a working-class Latino community just across the river from downtown Los Angeles’s Arts District. Instead, on what should have been opening day, the gallery faced a crowd of protesters gathered in front of the space, banging drums, holding posters, and chanting slogans in English (“We don’t need galleries, we need higher salaries!”) and Spanish (“¡El pueblo unido jamás será vencido!”). At some point during the day’s protest, someone threw feces at the window, according to the owners; eventually, a neighbor called the police.
PSSST shut down.
“Our young nonprofit struggled to survive through constant attacks,” reads a statement on their site. “Our staff and artists were routinely trolled online and harassed in-person … we could no longer continue to put already vulnerable communities at further risk.”
The protesters say it’s “artwashing” the “use of art and artistic labor to perpetuate and enable gentrification.”
In another example, an experimental opera performance was chased out of public park.
One of the militants told City Lab: “We chose these tactics because we understand that city council members, politicians, and non-profiteers aren’t going to advocate for us, and we have to fight back.”
Who among us, outside of the most historically privileged area, have not thought it wise to buy or rent in an up and coming lower class neighbourhood, waiting for the prices to rise as your tribe follows and pushes out the traditional owners?
Some of us may think twice now.
Any Indigenous first Australians feeling a tad schadenfreude right now?
They’d be so entitled.