There has been a lot of press around the blockchain recently, mostly centred on cryptocurrencies such as Bitcoin and Ethereum, digital currency that exists entirely online and outside the banking system. Whether you think this is a fad or serious revolutionary development, blockchain technologies are seriously clever and could be used in all manner of situations, not just digital currency, to the benefit of even the most vulnerable in society.
Think of the blockchain as a giant data community, securely guarded by some complex algorithms and subject to a series of virtual checkpoints, with no real barriers to entry. People can see that you are a part of it and send you requests, but you can only open up your part of it with a private key that is so secure, you're pretty much screwed if you forget it. Pretty neat, huh?
Josh Graham, founder of EHAB, has been working on a way to embrace this technology to tackle the issues around affordable housing. In this blog, he explains more about EHAB, and why this could be a game changer, not just for UK Housing, but the world over.
Ehab is a decentralised platform and ecosystem which empowers people to collaboratively create and finance affordable housing projects. Our mission is to solve the global housing crisis and in the process develop a tool for the people-led co-creation of liveable, smart cities.
We have three main aims when it comes to creating affordable housing:
- Increase supply
- Improving quality
- Create unique and sustainable financing solutions
There are no simple solutions to meet these aims but we believe they can be best met with a unique combination of technologies built on the blockchain.
What makes the blockchain useful for housing?
- Securely and transparently storing contracts, investments and deliverables
This information forms the basis of a system which all parties need to trust, this enables large scale collaboration between a diverse array of stakeholders, with little extra management cost.
- Facilitating consensus based, collaborative decision making
Making use of decentralised autonomous organisation principles the blockchain can facilitate consensus based decision making towards a common goal, with secure anonymous rounds of voting and feedback on projects.
- Reducing admin costs and payment delays during construction
With our layers of smart contracts we can automate a lot of time consuming and costly tasks which happen during construction. The biggest savings can be made through automatic and instantaneous payments.
- Raising development finance from a pool of global investors at rates which beat the banks
Through our token system we can remove borders and allow anyone anywhere to invest in innovative and affordable property. This system makes it easier and cheaper to raise finance and easier for investors to trade in and out of their investment.
- Reduces fraud
The rules of the system are hard coded in, if you are using our platform it will be very very difficult to circumnavigate these and defraud the system. This has the biggest benefits in markets where fraud is more common in the house building industry.
- Generating a trusted reputations system which will drive up standards across the industry
Using feedback and reviews we build reputations for service providers. The blockchain proves that these reviews are from people who have worked together and completely remove the possibility of bots or fake accounts leaving reviews.
So how can we achieve those aims?
In the short term we want to help housing associations cut costs. We can wipe out marketing costs, reduce admin costs and get better rates for development loans. Through our tokens we can also enable HAs to deliver completely flexible shared ownership schemes to free up more capital. This can help stimulate supply.
In the slightly longer term it seems the best way to improve quality whilst also still reducing cost is to switch to a housing industry which primarily uses modular housing and factory made precision housing. These technologies are already competitive but need to scale to become even cheaper to increase adoption. We focus on partnering with developers who use these technologies and provide them with a long term pipeline of projects so they can ramp up production, cut costs and eventually become a significant part of the housing sector.
In the medium to long term we want to create some completely new financing solutions which would further empower housing associations. The ideas which currently seem promising are a decentralised version of a building society, which allows people to save and HAs to better access funding, and the creation of digital community land trust schemes, where a digital group of investors own the land under the houses and receive rents based on an affordability metric for those who could then affordably build houses on the land and live there.