This article was produced by Fairstead.
Fairstead has launched Fairstead Ventures, a $100 million venture capital initiative, designed to invest in and deploy innovative startups focused on decarbonization, energy and water conservation, and sustainability.
As one of the country’s fastest-growing owners and operators of affordable housing, Fairstead’s vision is to sustainably retrofit aging affordable housing stock with the latest technology solutions by acting as both a strategic investor and a customer. Fairstead Ventures is actively looking to invest in and partner with startups to help them pilot and scale new technologies in the multi-family sector – initially within the Fairstead portfolio and ultimately across the industry.
Fairstead is in a unique position to partner with cutting-edge startups. With vertical integration in development, construction, and property management, Fairstead can solve for the go-to-market challenges that many early-stage proptech startups face. The company has the ability to pilot and incubate technologies throughout its portfolio. As an owner-manager, Fairstead can understand in real time how the technologies work in their buildings and through feedback from residents. This can provide critical insights into product adoption, giving startups valuable feedback so they can learn and iterate.
The company’s relationships within the industry, and with government and community partners, will allow it to shape the adoption of best practices, setting a new standard for affordable housing.
By working with startups and bringing them to scale, it will then lower the cost for smaller and mid-sized affordable housing owners, providing an easier, more economical way for them to access and deploy new technologies.
“For too long, affordable housing has been underserved in tech, even though the impact could be immense,” said Aki Karja, Director of Proptech at Fairstead Ventures.
If America is going to get serious about addressing climate change, making our existing buildings more sustainable as possible is critical. The construction and ongoing operations of buildings account for 40 percent of all energy consumption in the United States, according to the U.S. Energy Information Administration.
Due to thin profit margins, sustainability retrofits in affordable housing typically occur when assets change hands. Sourcing capital for a major retrofit can be nearly impossible between transactions, so the vast majority of affordable housing properties will not see major upgrades if they are not bought and sold. Fairstead Ventures is a response to that reality.
The initiative will ensure that real estate does not continue to lag other industries in tech adoption. This is particularly necessary for affordable housing. There is a fast-growing ecosystem of proptech innovators, but until now, these technologies have primarily benefited the luxury housing and commercial office sectors, which can pass on the cost of their sustainable tech investments to their residents and tenants. That is not the case in affordable housing.
“The creation of Fairstead Ventures advances our dedication to fundamentally changing the standards in the housing industry, particularly at the intersection of sustainability and affordability,” said Jeffrey Goldberg, CEO of Fairstead. “By utilizing our capital and expertise in private equity and venture investing, we will bring innovative solutions to affordable housing nationwide.”
Fairstead Ventures is just the latest in a long line of environmental initiatives by the developer. Fairstead has long championed the use of clean renewable energy in its properties and even launched the first “community solar” project at an affordable housing development in Rhode Island.
This work is a powerful reminder that the country’s twin housing and climate crises are linked. As communities across the country build and preserve more housing to address a worsening shortage, developers must be able to adapt their projects and properties to include sustainable technology such as heat pumps, solar panels, water conservation programs, and more.
While that may sound like a tall task, Fairstead is showing right now that it isn’t just possible but that it’s already being done.
Learn more about how Fairstead is driving innovation in affordable housing by visiting fairstead.com.