Half of the world's 7.4 billion people live in cities. According to research by the United Nations, in 2050 more than 70% of the world's population (projected to exceed 9 billion) will live in urban areas. This trend is significant, particularly as global demand for natural resources continues to rise in step with population growth and the evolving needs of society.
Humans thrive off of connectivity with each other and the natural world. Cities tie people and place together with shared infrastructure and opportunities for enrichment through culture, arts, sciences, commerce, politics, and entertainment. As the global design and engineering consultancy points out in their "Sustainable Cities Index," humanity has now officially entered "the age of the city."
The migration of people to urban centers makes sense. It's represents a cue that people value the significance of place as it defines their life. ARCADIS' Sustainable Cities Index evaluated 50 of the largest cities in the world against specific sustainability indicators such as income inequality, property values, air pollution and greenhouse gases, waste management practices, work-life balance, the availability of greenspaces, literacy rates, education rankings, the ease of doing business, health indicators such as life expectancy, among others.
According to the ARCADIS analysis, cities including Rotterdam, Soul, London, Sydney, and Copenhagen rank among some of the most sustainable in the world. And cities including Rio de Janeiro, Mumbai, New Delhi, and Nairobi, which are primarily located in developing region of the world, are ranked lower on the sustainability index, but improving.
Paralleling the rapid urbanization trend is the rise of the global middle class. Data from scholars with the Brookings Institution estimate that the global middle class will reach 4.7 billion people by 2030, compared to 1.9 billion in 2010. In the next ten to fifteen years projected economic growth in Asia-Pacific region nations including China, India, Indonesia, Vietnam, Thailand, and Malaysia will give rise to a more significant global middle class than the world has ever seen. Brookings Institution research estimates that by 2030, Asia's middle class will represent nearly two-thirds of the world's middle class, accounting for more than 40% of global consumption.
As more people navigate to cities and with purchasing power, greater demands will be placed on natural resources. Sustainable buildings and infrastructure provides a counterbalance this trend. But capital markets, real-estate developers, government agencies, and leading consultancies like ARCADIS cannot do it alone. The purchasing power of people can and will have a profound impact on the future state of sustainable cities and living.
A next generation company positioning itself at the nexus of sustainable living, urbanization, and the emerging opportunities of the international real-estate market is Propy, Inc. At the center of Propy's value proposition is a goal to motivate sustainable building and living choices for consumers, particularly in the largest global cities.
While real-estate is always a local and site specific opportunity, the marketplace for real-estate has truly become global. Currently one-third of real-estate purchases are made by international customers. In 2015, home sales to foreign buyers represented a $104 billion market in the U.S. alone. Chinese buyers comprised more than a quarter of foreign purchased homes in the U.S. with a valuation of $28.6 billion.
One of Propy's solutions for international real-estate buyers is that it aggregates property listing from prominent global cities and advertises them to foreign investors in their native language. The Propy App also links local real-estate brokerages and foreign buyers together so that potential deals can be brokered more efficiently and faster.
Propy's value proposition does not end there however. Recognizing that 40% of CO2 emissions are correlated to residential homes and living, Propy has integrated into their App, a sustainability tool which actively assesses social, economic, and environmental indicators of the property and its location, culminating into a sustainability score for the home. Propy's embedded sustainability tool provides a platform to encourage buyers to proactively evaluate sustainability criteria of buildings and homes. At the core of Propy's sustainability tool is dynamic and proprietary algorithm that takes into account the walkability, quality of education, air quality, energy efficiency, access to public transit, and a diversity of other parameters.
While it seems complex, Propy's App, like other successful tech-based companies, is simple and intuitive. They've done their homework and honed in on an enormous and underserved opportunity in the marketplace: connecting international buyers with opportunities for sustainable living. What I find interesting about Propy is that their platform has potential to driver consumer choice and builder behavior simultaneously, thereby motivating investors and owners to focus on sustainable building.
Sustainability is complex, as Propy's management team knows all too well. Two of Propy's executive team, Ms. Natalia Karayaneva, CEO, and Ms. Eva Otanke, Chief Sustainability Officer (CSO), met while attending Oxford University's Sustainable Urban Development Program.
Originally from Russia, Natalia Karayaneva had a successful career as a real-estate developer, and saw the opportunity to connect international investors with the evolving trend in rapid urbanization. Ms. Karayaneva sought out to study the complexity of sustainability in real-estate, and in 2015 she completed her Master of Science in Sustainable Urban Development from Oxford. Her focus, studying and assessing the nuance of sustainability rating systems as applied to residential real-estate.
Ms. Otanke, a Latvian Canadian, has been a successful entrepreneur in her own right, owning and operating a business planning, development and sustainability consulting and event planning company with international operations. In addition, Ms. Otanke is currently supporting the World Wildlife Foundation (WWF) Latvia on their development and fundraising strategy.
Green and sustainable building standards organizations, like the U.S. Green Building Council (USGBC) have established world-class voluntary standards for energy efficient and environmental design including commercial buildings, neighborhoods, and home. While such standards have begun to transform the quality, efficiency, and sustainability of the built environment, there remains a gap between builders, buyers, and sellers regarding the assessment, scoring, and disclosure of sustainability as an integrated metric for real-estate. Enter Propy whose app is working to provide a market-based opportunity to root sustainability into the everyday psyche of the international real-estate investor.
Propy is also practicing what it preaches. The company has dedicated 1% of its revenues to support energy efficiency projects in low-income areas. This past Martin Luther King Day the company announced that it was launching a program to install solar panels in low-income neighborhoods in partnership with Samantha DeBianchi. If Ms. DeBianchi's name sounds familiar that's because she is a famous real estate broker featured on Bravo TV's reality show, Million Dollar Listing. The details of Propy's low-income neighborhood solarization initiative are forthcoming and will be disclosed by Earth Day 2016 along with a pilot project in the U.S. according to company sources.
In just a few weeks after their launch, Propy had more than 10,000 unique visitors and thousands of app downloads, substantial progress for this new-age company on a mission to deliver sustainable value. Only time will tell how well Propy does as a company for Ms. Karayaneva and her team, but one thing is for certain, Propy is positioned to integrate science into sensible real-estate selection options that bridge an existing global need with the opportunity for creating a more sustainable world.