Fourth Industrial Revolution

How to ensure that connected homes are for everyone

Image: Dan LeFebvre/Unsplash

Fanyu Lin
Chief Executive Officer, Fluxus LLC
Andrew van Doorn
Chief Executive, HACT
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Fourth Industrial Revolution

  • The social housing sector could benefit from the opportunities of internet of things (IoT) technologies.
  • Smart systems could empower residents, lower costs to organizations and increase energy efficiency.
  • A new World Economic Forum report shows how we can come together to realize the social benefits of a connected world.

During the COVID-19 pandemic, social housing organisations have been forced to move their services online and to shift to home working. This has accelerated their move towards digital-by-design organisations. Incorporating data standards and embracing the opportunities of smart homes are the next steps they need to take.

A number of social housing organisations, including Peabody, Vivid Homes and Flagship Housing, have run pilot schemes to show the benefits of introducing the internet of things (IoT) into social homes. These trials have revealed the significant benefits of individual IoT technology on residents lives as well as the business bottom line.

According to the World Economic Forum’s newly released State of the Connected World report, the ability of these connected devices and systems to fairly benefit and protect society was highlighted as top priority for governments and business around the globe.

Smart home devices by segment
Smart home devices by segment Image: World Economic Forum's

Benefitting residents and landlords

Smart homes in the social housing sector could enable and empower residents and their communities, resulting in greater wellbeing and improved engagement between residents and landlords. For social housing organisations, the introduction of IoT technology could help them manage and maintain assets more effectively.

For example, smart locks would enable residents to allow repairs personnel access to their homes while they are at work, reducing the anxiety and stress traditionally associated with the repairs process. This could help reduce the costs associated with missed appointments and ensure that minor repairs do not become major issues.

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Smart sensors, in conjunction with other devices, would automate control over the environment of the home, improving living conditions with reduced input, reducing utility costs. Smart temperature sensors would enable social housing organisations to measure and resolve damp and mould issues before they become a costly problem to fix. Smart leak sensors could detect water escape and activate smart stop-cocks before major damage is caused, saving costs of repairs, protecting residents’ home contents and the inconvenience of remedial work.

Smart lighting could also improve visual comfort in the home, allowing the resident to exercise greater control over the luminal levels beyond just on/off. This smart technology would give residents greater control over the ambience of their home, which can be particularly helpful in empowering those with physical disabilities.

Connectivity provides the opportunity to create new business models to make capital available for low-income markets.

Fanyu Lin and Andrew van Doorn

Increasing energy efficiency

Buildings represent 40% of mankind’s carbon footprint, with 90% of the world’s building stock built before 1970 when there were limited or no energy efficiency standards. Often overlooked in these statistics are the challenges faced by working low-income households. As cities grow larger and competition for space increases, low-income families are often pushed to live in the city’s lowest quality and poorest weatherized building stock. One of the most impactful things we can do as a society is to bring this sector to current energy efficiency standards.

Smart homes can help reduce the carbon footprint. For example, smart thermostats can potentially offer residents around 20% savings on their energy bills by ensuring their homes are only heated when needed. A smart thermostat pilot rolled out to 493 properties in the UK could save £600,000 in energy bills over the next 10 years, along with 1.82 tonnes of CO2 per year.

For social housing organisations, the move towards net carbon zero is critical, both for their development programmes as well as their existing assets. Increasingly investment fund managers are requiring social housing organisations to report on their ESG impact. The smart social home will help them to demonstrate their environmental commitment.

Enabling business models

Connectivity provides the opportunity to create new business models to make capital available for low-income markets. Businesses that have access to the digital footprint of the household can be more profitable.

With digitalization, we can envision the shift from a traditional homeownership model to a low-entry-cost model where up-front home ownership costs for households are reduced in exchange for providing access to certain data such as power consumption requirements and appliance performances. We can also envision the shift from traditional lease model to as-a-service model where housing organisations bundle rent, energy use, maintenance, internet and other costs into a monthly fee for properly managing all aspects of a household. In this way, service providers are motivated to keep costs low to increase their margins and stay competitive.

With the increasing prevalence of energy-efficient, connected home appliances, it is also much more feasible for Energy Services Companies (ESCO) to capture and monetise energy savings at the household level. In subsidized housing, these companies could receive additional government-guaranteed revenues.

This would mean low-income households could avoid the initial high-cost investment for energy-efficient upgrades through usage fees that spread the cost over time, which would accelerate the retirement of old and poor-performing appliance stock.

UK housing data standards
UK housing data standards Image: HACKT

Creating a connected future

Realising the benefits of smart homes in the social housing sector will not happen without the right data foundations in place. Launched in 2018, the UK Housing Data Standards (UKHDS) are being developed by HACT and OSCRE, in partnership with more than 70 social housing organisations.

The latest version of the standards – version 3.3 – includes data standards for use cases including core customer data, reactive repairs, asset maintenance, care and support, income and service collection, and development handovers. The latest use case will focus on resident feedback and the complaints process.

It is time for us to collaborate on a global scale to harness the benefits of interconnectedness towards a shared reality in which technology becomes a driver for social, economic and environmental sustainability in our connected future.

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