Rethink Real Estate. For Good.

Environment

The Garden.

by Eve Picker

There is not much good to say about the Covid pandemic. But three years later I am richer in two ways. I have plenty of antibodies and I have become obsessed with plants.

Gardening is too mild a word for my passion. Books and the internet fill hours of time, as I  troll my favorite landscape gurus online and plot complicated planting plans. Hundreds of plants have become familiar to me as I learn where they love to grow and how to help them thrive. Early on I tried to tame the animals and bugs that love my plants as much as I do, but nature is ferocious and impossible to rein in.  Now I adjust my plans to make sure I choose plants that attract bees and butterflies not voles and rabbits. 

A good challenge is something I enjoy and my garden gives me plenty.  I’ve watched voles suck three rounds of plants into the ground early on, in my novice year.  Planting 60 narcissus bulbs did the trick. Now they’ve moved on. My “lawn” is now predominantly clover. It distracts the rabbits from my precious plants. Hydrangeas have been caged for the winter and covered in leaves to keep the deer away … and more.

Every day I impatiently wait for the work day to end so that the final  two, three or four hours of sunlight can be spent digging, pruning and pulling weeds. My plants have shaped an outdoor room for me. This is where I take coffee every morning, watching each plant progress through its cycle of growth and decline. 

And I love every moment of it. 

What passion did you grow during the pandemic?

Waste to Energy.

Samuel Alemayehu is an experienced global serial entrepreneur and active angel investor. His work in the
past two decades has been guided with an obsession to empower the individual and sustain the village.
His current focus is running Frontier Resilient Capital (FRC) to incubate or invest in companies who are
developing or commercializing breakthrough technologies that empower the individual (personalized
web) and sustain the village (biomanufacturing, renewable energy, carbon capture and circular
economy).

Sam started his career in Silicon Valley as a serial entrepreneur launching two companies from his college dorm room. He first got introduced to venture capital at Venrock Associates, where he focused on consumer media investments. He then moved to Africa, founding and investing in numerous companies across the continent and in a range of industries through Cambridge Investment Group and most recently FRC. Sam incubated 4AFRI at Venrock before growing the platform in 12 African countries with over 25m customers. He then built a mobile gaming platform, LotoPhone, in 18 countries with millions of customers before exiting the startup in 2013. He also created Sen Sante in partnership with leading investment banks to help develop large health infrastructures in Africa with a mobile based universal health insurance. Sam created mobile solutions aimed at empowering the individual.

Over the next decade Sam incubated Cambridge Industries Ltd, East Africa Electric Ltd, and Contingent Technologies Inc. to accelerate the implementation of pioneering infrastructure projects in emerging cities. He set up the first locally manufactured wind study program in over two dozen sites throughout East Africa. He oversaw the planning, design and construction of the first municipal waste-to-energy facility in Africa, located in Addis Ababa, Ethiopia, as part of a pan-African sustainability city park project to industrialize the circular economy with the initial facility built at a cost of USD120m. The full project has created over 20,000 jobs and aims to employ over 250,000 before the end of 2030 in ten cities. Each facility is designed as a multi-purpose plant with numerous functions, including metal recycling, brick production, industrial steam, producing biodegradable plastic, and modern insect farming. Sam has recently invested in commercializing breakthrough technologies through projects in Uganda, Kenya, Cameroon, Nigeria, Ghana, Senegal, DRC, Somaliland, Djibouti, Botswana, Angola, Namibia, and South Africa.

Sam is an active angel investor globally and sits on the board of numerous companies as an investor. He also sits on three non-profit boards: the Ron Brown Scholars Program, KID Museum, and VC Include. Sam is a founding partner at Pitch and Flow, an innovative storytelling platform that uses the global appeal and power of hip-hop to showcase and celebrate the next generation of entrepreneurs. He is a graduate of Stanford University School of Engineering and a World Economic Forum Young Global Leader.

Read the podcast transcript here

Eve: [00:00:14] Hi there. Thanks for joining me on Rethink Real Estate. For Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. 

Eve: [00:00:54] Today I’m talking with Samuel Alemayehu, born in Ethiopia and educated in the US, Samuel is a serial entrepreneur and investor focused on deploying technology as an equalizing force. “Let’s change the world to technology and products that empower the individual and sustain the village” says Samuel. Through his work with Cambridge Industries, Samuel is revolutionizing the way we think about sustainable energy and infrastructure. He built the first waste to energy plant customized for sub-Saharan Africa in Ethiopia, the Reppie Waste to Energy project. The project takes 80% of the city’s garbage and turns it into 25% of its electricity. Samuel has boundless energy and a lot to tell. So, listen in. 

Eve: [00:01:53] If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast and go to RethinkRealEstateforGood.co where you can subscribe to be the first to hear about my podcasts, blog posts, and other goodies. 

Eve: [00:02:24] Hello, Samuel. Thanks so much for joining me today. 

Samuel Alemayehu: [00:02:28] Thank you for having me. Excited to be here. 

Eve: [00:02:30] Very excited. So, you have said “let’s change the world through technology and products that empower the individual and sustain the village”. And I’m just wondering how you’re tackling that? 

Sam: [00:02:44] Exactly. So that has been our mantra as long as I remember. And whenever you’re building any kind of product and services, it has to focus on the individual, kind of be usable. Does it improve our life? And most importantly, does it improve the community that we live in sustaining our village? And at the end of the day, this is a global village and we’re doing it one waste trash at a time and starting in emerging markets. And we have evolved to do many things right now. Um, but our focus has been how can we take something that has been a headache, a nuisance and convert it into a treasure, convert it into something of value and do it in a way that really addresses water treatment, sanitation, and most importantly, a vibrant circular economy in every city. 

Eve: [00:03:42] So this you’re referring to the Reppie waste to energy plant, I think first and foremost, right? 

Sam: [00:03:48] That’s the first facility we’ve done. 

Eve: [00:03:50] And that was, where is that located? 

Sam: [00:03:53] That is located in Addis Ababa, Ethiopia. 

Eve: [00:03:56] And that’s where you were born, right? 

Sam: [00:03:59] I was born and raised there, and I left when I was 14. 

Eve: [00:04:02] So what goes around comes around, I think. So, tell me tell me why. Why did you start this waste to energy plant? 

Sam: [00:04:12] So, a lot of people start projects or entrepreneurial endeavors for something they love. A labor of love. For me, it was a labor of hate. Hated the garbage in Addis Ababa. I, it’s just, it’s everywhere. Um, you know, you would think if you live in a wealthy neighborhood, it’s collected and taken out, out of sight, out of mind. But no, not for me. Not where I grew up. Like I remembered the garbage was everywhere. We picked around, it really annoyed you. And even in the area where it’s being dumped, it used to be the outskirts, but it’s smack in the center. It is not a modern, even, you know, landfill site, but it is something where we’re digging the ground and throwing this garbage. And it’s in a country that imports metal, that imports plastic, and we’re not recycling it, we’re not reusing it. And we’re not trying to come up with a way, want to address the health impact, the direct sanitation impact of the garbage, but also when this could be an opportunity to create something of value. And I, you know, I left Ethiopia when I was 14, did my high school in the D.C. area and then went to Stanford and then was a software engineer, did a bunch of different companies around software. So, when I came back to Ethiopia, I was like, okay, we need to do something about this and it needs to happen, and started working with those that have addressed it in Europe. But we wanted to create something unique for Africa because the waste was unique, the challenge was unique, the community was unique. 

Eve: [00:05:54] So how does the plant work? 

Sam: [00:05:58] So the first facility, because the overall concept is how do you build a facility that takes in garbage and creates value? That’s a purpose. And have minimal garbage out of it as possible? The very first facility that we built in Ethiopia, does combustion, but with a flue gas treatment, the same flue gas treatment that allows you to capture the nasty gases that would come out from burning it, because that allows you to reduce the significant amount of the waste and capture those gas through flue gas treatment as per the EU standard that allows you to be located within 100-meter radius of residential areas all over the EU. So that’s the standard that we followed. Then over time, when we’ve been implementing other projects, we started to add, hold on, for the food waste, how can we separate the food waste and what is the optimum value we could get out of food waste? And that was doing insect farming and that is taking the food waste, separating it and feeding it to black soldier flies that grow 230 times their weight within ten days. 

Eve: [00:07:06] Whoa.  

Sam: [00:07:07] And making that into chicken feed and fish feed and organic fertilizers. 

Eve: [00:07:12] Whoa. 

Sam: [00:07:13] So it becomes really, really incredible value-add. And then for the waste and then we say, ooh, what about the plastic waste? How can we separate plastic waste and recycle it in the most exciting way possible? So, we started working with scientists around the world that have been using new type of enzymes that break down the plastic, and that allows you to filter it and separate them. And then you say, what about once it has gone through the system? And if you are to use combustion and you’ve burned it, the ash that comes out, we could turn the ash into bricks. What about the metal that is in there? We use super magnets to separate out the metal. This facility in Addis right now alone is separating 3.8 million kilograms of metal every single year. 

Eve: [00:08:02] Wow! So, this plant does a lot more than one thing. 

Sam: [00:08:08] It does a lot of things within one facility. It is how do you take garbage, but how do you turn it into value? And one of those values is electricity. So, it is able to generate 185,000,000 kilowatt hours of electricity, which is the equivalent of about 20% of the household energy generated in a city of 5 million people. 

Eve: [00:08:31] Wow. 

Sam: [00:08:33] And then you have other byproducts, be it making interlocking bricks, recycling plastic, being able to create food waste and converting that into chicken feed, fish feed and other. So, currently, we’re in the process of building a new facility in Kinshasa, which is a city of 18 million people. It’s actually the largest French-speaking city in the world, double the size of Paris. 

Eve: [00:09:01] Wow. All these things I didn’t know. 

Sam: [00:09:05] You never know. And Kinshasa is this vibrant place. But we’re not using incineration and with the flue gas treatment, but instead, it’s fully entirely set up with what’s called anaerobic digesters. And we’re able to capture the gas and use the gas for energy generation as well as to replace household charcoal usage. 

Eve: [00:09:26] So what’s the… It’s a lot. So, what’s the long-term plan? I mean, how many plants, how much garbage are you tackling? I mean, how much more is there to tackle in Ethiopia? Are you seeing cleaner streets? I have lots of questions. 

Sam: [00:09:42] We are. We have seen cleaner streets, one, in the program that we implemented in order to collect garbage better. But most importantly, the challenge has always been disposal. So, our core goal is to continuously evolve and change with advances in technology so that, how can we create the maximum value from the resource? To us, the waste is not garbage or a waste. We like to call it feedstock. So, to us it’s a raw material that comes in and we say, how can we maximize the highest amount of value from this garbage and, or from this waste, from this feedstock? And the goal is to be left with almost no waste whatsoever. Right now, we still send about 2% of the garbage back into landfills, but everything else gets to be used to different values, but within one central facility. So, in Addis, it’s a city of 5 million people, it’s processes 500,000,000kg of garbage a year. And that’s the only facility we want to add other additional facilities next to it.  

Sam: [00:10:52] We partner with others as well. And it is a facility that we’ve built in partnership with the Ethiopian government. In Kinshasa, we’re fully owning the facility and we will be processing 3,000,000,000kg of garbage a year and really creating over 35,000 jobs in collection as well as disposal and, and other projects. But there are other cities, so we have feasibility studies in Gabon. We’re also working in places like Guatemala, Honduras, Nicaragua are the three places that we’re exploring in Latin America. We have a partner we’re working with in Bangladesh. We think the technology that we’ve put together, the system and it’s allowing even other innovators and entrepreneurs to plug in, into our existing infrastructure because we have the waste, if they come up with a better way to deal with, let’s say, battery waste or another type of waste, they could easily plug into our platform and be able to service and provide a circular economy solution. 

Eve: [00:11:57] So any plan for the US? 

Sam: [00:12:01] Uh, Eve, that is a good and interesting question. We do think we have come up with even better solution that could work for the US. But the US is tough. The US, because it really is bureaucratic. You have two companies that totally dominate anything that has to do, to be done with waste. That is Waste Management and Republica. If they want it done, it will be done. If they want to block it, they will block. 

Eve: [00:12:28] And if they want to hike up prices, they hike up prices. I bet they do that. Yeah. 

Sam: [00:12:32] Look at their stock! Their stock, for the past 20 years, they’ve performed better than many companies. 

Eve: [00:12:38] Oh, yes. 

Sam: [00:12:40] It’s a multi-billion-dollar enterprise.  

Eve: [00:12:40] I fired them on my little buildings because it was so expensive. It was outrageous. And… 

Sam: [00:12:47] I mean, one of the challenges there is the US is on track to have landfill that is the size of the state of Rhode Island. Throughout the US. And this is land we’re never going to get back. This is land where, you know, it’s just continuing. And they talk about, oh, we have landed the right way or the different… But this is a permanently wasted land. If you want to re-mine it, it is really challenging. But instead of coming up with newer solutions, they’re continuously rebuilding more landfill. But all is not lost. There are some companies that are doing some exciting projects, specifically around anaerobic digesters and the recycling of plastic waste. 

Eve: [00:13:32] I’m actually, I’m a little shocked to hear that, you know, that the management of waste is actually controlled by two companies in the US. 

Sam: [00:13:42] A supermajority of it. That’s correct. 

Eve: [00:13:45] That’s kind of crazy. 

Sam: [00:13:47] Well, a lot of things in the US are either a monopoly or a quadropoly. I mean, be it… 

Eve: [00:13:53] That’s a monopoly, isn’t it? That’s… 

Sam: [00:13:56] Yeah, that’s a duopoly. You know, and you look at grain supply. You have four companies, the ABCDs, you know, Archer Daniels, Cargill, and a few others that dominate, like there’s various sectors. 

Eve: [00:14:14] But if you were to go to a particular region or a city and say, we want to try this in your city, could those monopolies stop you? 

Sam: [00:14:28] If, because it’s long-term contracts. So, when it comes to the waste collection, they have a long-term contract. 

Eve: [00:14:36] I know, I fought with them about that. That’s actually why I fired them because I refused to sign long term contracts. Interesting. 

Sam: [00:14:44] There are places where the cities, because it’s regional, you don’t need something that needs to be done fully. Vermont, New Hampshire. California has put in requirements. So, EU does a lot of innovative work because regions make a requirement saying you cannot throw to a landfill, or the amount of money we give you is not going to be as much. Like if you pay less, it will actually will lead to more innovation. Because if they pay them enough, they can just throw it in there and they don’t have to worry about monetizing it in order to be competitive. In Ethiopia, we have to come up with all these monetization schemes because we are not making that much money. Like they would make about $100 per ton of waste, on average, it really does vary in different places. So, they don’t have to worry about it, but we do because we make less than $2 per ton of waste. So, we have to come up with as many ways as possible to generate revenue from the waste, and that is recycling it, that is putting it through a circular system. 

Eve: [00:15:44] That’s innovation, right? You get complacent when you make too much money. 

Sam: [00:15:49] Necessity is the mother of innovation. 

Eve: [00:15:51] Yes, I know. That’s exactly right. The city that, what city is this first plant in? 

Sam: [00:16:00] The one that we’ve done is in Addis Ababa, Ethiopia. Okay. 

Eve: [00:16:03] So what do the people who live there think? 

Sam: [00:16:07] That’s a good question. So, as the main facility, we do have great support because one of the things, Eve, is building the very first facility of its kind in Africa. I have as much challenges, I don’t think we have enough time on the podcast of the challenges that we have faced as implementing projects. 

Eve: [00:16:26] I’d love to hear about them. 

Sam: [00:16:28] But a lot of it is artificial challenges, as bureaucracies and when governments change, you know, they make it very, very, very tough. But what it has done is it has been able to remove garbage from just piling up in landfills. Landfills take a large amount of land, usually for a city of this size, it would be around 200 hectares every 20 years, every 25 years that you have to dedicate for that. And it needs to be within close proximity of the city or it’s going to cost you quite a lot to transport that garbage. So, with the city, we have gotten incredible support, but when bureaucratic changes happen, we have to continuously provide support and program for the community. So, those are some of the challenges that we’ve faced, is bureaucracy and government changing rules on you. But right now, it is going in the right direction. We’ve gotten a whole lot of support because at the end of the day it is providing much needed electricity, significant amount of job creation, but also turning something that was, you know, a problem into a significant amount of a solution and a treasure. 

Eve: [00:17:47] How many jobs have you created? 

Sam: [00:17:50] So when it comes to waste collection, in a distributed way, it’s 11,000 jobs have been created in Addis Ababa. 11,000. And then with the waste disposal system and the ancillary works, it’s about 850 jobs. 

Eve: [00:18:05] That’s quite a lot. So how quickly do you think, you know, the others that are in planning will emerge? 

Sam: [00:18:13] We do see half of those facilities up and running. 

Eve: [00:18:17] Okay. This is amazing. I’m sort of stumped for asking questions. So, what were some of the most unusual challenges that you’ve had? So, we all know about bureaucracy and you know that rules changing. 

Sam: [00:18:31] Let me give you a couple. One was initially. So, when we started operating the facility, a lot of the waste collection that was done, we implemented a per kilogram. That’s the international standard for waste collectors. And what we realized was as soon as we implemented that system, initially it was used to be just a monthly fee. A lot of the waste collectors would fill up the weight, so the weight all of a sudden increased. Oh, and it was a bit suspicious. And within a week we had to shut down the facility because half of the waste that we’re collecting was rock and dirt that have been dug up on the ground. 

Eve: [00:19:11] So those are all the entrepreneurs out there being entrepreneurial. 

Sam: [00:19:15] You do the incentive this way. So, we had to bring them back in and create a different set of incentives that really aligned with all of us and that had a trust-based system and a support system. So that was one of them that happened with waste collection. And another one that you face is there’s a lot of misconception around waste to energy. So, the typical incinerator of the past is not good for the environment at all because anybody could start a fire. Burning waste by itself is the worst thing you could do to the waste. But a modern flue gas treatment, the flue gas treatment alone costs us about $40 million of capex. And you see them all over Europe. There are over 400 of these facilities in Europe. In Denmark, over 95% of all the waste is processed through these facilities. But what they do with the flue gas treatment is a modern facility that is able to capture what would have been emitted and convert it. And so, educating that part was quite important. But the more work that we continue to do, we even found more innovative solutions that were way more superior, both financially and environmentally, to even the combustion process that even Europe uses right now. Which is being able to separate the waste as much as possible, using enzymes to break down those wastes to their individual values, to include projects like insect farming. That allowed us to really maximize the value of every single bit of that waste. And so those were some of the innovative projects that came out from the challenge of this legacy brand that incineration had addressing that, but also really growing away from it because of a lot of the innovations that are out there. 

Eve: [00:21:18] So when you separate out the trash, how do you do that? And I’m asking because I interviewed someone in Norway who had created these robot waste pickers that were just fascinating for large objects and small ones. 

Sam: [00:21:35] So, we use humans and kind of separation systems because we need to employ. You could use robots, we have systems, we can employ robots as well. But in Africa we need as much of the jobs as we could get. We provide safe environments and usually we do it three ways. One is to separate them at source as much as possible. Two, once they have arrived on site conveyor belts and to be able to separate them. The first facility that we did is bulk, so we didn’t need to do the separation and the separation is done using super magnets or other parts at the end, but earlier is using as much of human power as possible. But when it comes to, for example, metal, we use super magnets. For non-ferrous metals we use eddy current technologies. With plastic, once we have plastic waste, we actually have, you’ll like this. So global plastic recycling in the world is abysmal. It’s 8/10% maximum. A lot of the waste makes it to landfills and waste disposal sites. The reason that Europe and US have a higher calorific value, meaning its ability to generate energy is higher, is mainly because of the amount of plastic and paper that makes it to those waste to energy facilities as well as disposal facilities. A huge number. Because it doesn’t get recycled and it’s a shame that it doesn’t get recycled. It makes it to waterways as well. It’s a detriment for different things. So, what we have done is we take out plastic waste separately together and then all of the plastic, we don’t separate the plastics. We introduce an enzyme. This is a technology that was developed in University of Texas Austin and a team out of University of Nottingham. And this enzyme that they have breaks down the plastics to its individual components and then we’re able to use a specialized membranes that allow us to filter the different chemical compounds of the plastic individually, separately. And you can maximize the recycling process to up to 80/85%.  

Eve: [00:23:49] Wow.That’s a big difference. 

Sam: [00:23:51] And something, once it’s scaled, could be a game-changer. 

Eve: [00:23:54] Yes. So you must have a lot of scientists and software engineers and other people involved in this project. 

Sam: [00:24:03] We do. We work with scientists both as subject matter experts that advise us, but also in our team. We’ve also been early adopters for a lot of scientists that are working in the waste sector, because one of the advantages of emerging markets compared to Europe or US, usually is, when you want something to be adopted in the US, you go head-on into legacy companies that are usually well capitalized and very powerful. So very hard to change it. Or as a legacy infrastructure that is already a sunken cost that somebody will lose money to adopt a new technology. So there quite a lot of hesitation. But for us in an emerging market, that infrastructure hasn’t been built yet. So, when somebody comes up and say, I have the solution, it’s new. It’s like, we raise our hands quickly and say we will adopt. Can we work? So, we have been early adopters to a lot of this technologies that allows us to start working with them to even invest in them. So, when they come back into Europe, US, we’ve had an opportunity to really have a seat and be a player in a lot of these emerging technologies. 

Eve: [00:25:17] It’s really fascinating. It makes me want to go to Africa. 

Sam: [00:25:21] You’re welcome. We would love to host you. 

Eve: [00:25:25] So, yeah, it’s very difficult when you’re up against a system, right? And you’ve probably seen that in your other work as a VC because, you know, I’m the 1.9% that you would invest in, a female, right? And then if I were black, I’d be the 1%, right? And that’s just, you know, that’s a system that’s very difficult to break through to. There’s so many of them. 

Sam: [00:25:52] Oh, absolutely. Yeah. 

Eve: [00:25:54] And zoning, like in my world, in real estate, you know, zoning has really shaped the physical landscape in the US and not always, sometimes in a good way, sometimes in a very bad way. Right now, it’s a detriment to really building new affordable housing quickly. But breaking through it, there’s so many layers, there’s so much to go up against so I totally get it. But you’ve also been, you’re also part of something called the Power Africa Initiative, which was set forth by the Obama administration to work on large-scale wind farms in Africa. Can you tell us about that? 

Sam: [00:26:30] Yeah, so the Power Africa Initiative was something, as you said, that the Obama administration spearheaded, and it’s to support and assist renewable energy adoption throughout the continent of Africa. So, our collaboration with them is in the support of wind farms in a place called Aysha, and different parts of Ethiopia. But we’ve also worked with them in putting up wind mass to select and identify the best wind locations. So wind is one of those renewable energy technologies where location matters, just like real estate, location, location, location. And if you have the right type of location, the investment return on it, as well as its impact, its ability to generate electricity, you can go to a site where it’s generating maybe 15% of the time effectively, or you could have some of the sites that we’ve worked with in Aysha and another site called Lake Turkana in Kenya, on the border of Kenya and Ethiopia, they have plant factors as much as 65 to 70%. 

Eve: [00:27:38] Interesting. 

Sam: [00:27:38] That means for the same one wind farm that you have in there, it is operating and generating electricity at full capacity for 65% of the time. 

Eve: [00:27:48] That’s amazing.  

Sam: [00:27:50] That’s a significant amount of return. So, it’s identifying those sites where what we’ve worked on and what we have realized is, you know, especially with climate change and climate adaption, it has to be incorporated with where humans are located. Where are the load zones, how can we get them, how can we help them with energy transition? How can we use waste problem as a means of addressing the environment problem? Because one of the things is, you know, the same way you could emit a significant amount of carbon dioxide through gas fired power plants or, you know, diesel fired power plants, you also generate a significant amount of greenhouse gases in a landfill. Landfills around the world are responsible for that. So, the way we looked at it was energy transition, circular economy, they’re all very similar in addressing climate change. And if you are to do it where the development is happening, so that when energy, when new housing is built, you plug in. Hey, it needs to have a waste solution. If you have a good waste solution, if you have a reliable energy source, then the quality of living in those new housing projects becomes very attractive. So, we work with developers very closely to make sure that we are their partners, both for recycling and circular economy waste management as well as renewable energy supply. 

Eve: [00:29:17] I was going to ask you how could your model be improved? But it sounds to me like you’re thinking about that every moment. 

Sam: [00:29:24] No, because you can always improve. You know, Eve, the one thing that just heartens me right now, given all of the challenges that are out there, is advances in science and technology. Everybody’s talking about AI, ChatGPT, but what AI has done to plastic recycling, to the way we’ve been able to create a lot of these enzymes is because of AI. The ability to simulate the right type of wind locations, steady multiple sites at the same time. So, a lot of technological advances have made it very, very attractive to start addressing things. So, what we do is, we always have our ears, so as you alluded, my day job now, I’m still on the board and a majority owner of Cambridge, is in a new VC fund called C1 Ventures. Our work is, how do you continuously find, identify and collaborate with entrepreneurs and scientists that come from different environments? Because a lot of solutions, as you said, women get less than 2% of the global VC funding, minorities because… But at the end of the day, female entrepreneurs have performed better than any other entrepreneur out there. But if we want to find a solution, so how do we use the technologies? How do we bring individuals from different fields and put them in the right location, connect them with implementation projects, connect them with the right services? And if you could do that, innovative solutions are going to come up. Some of them, they use technology, some of them they’re going to innovate socially, business model innovation. But you need the diversity of thoughts. You need the diversity of experience. 

Eve: [00:31:14] Yeah, I agree. So, tell me what’s going on with real estate in Africa? 

Sam: [00:31:20] I am glad you asked that. Let me give you two stats to just show how real estate is extremely important in Africa and very dynamic. One is, for the next 15 years, the top ten fastest growing cities in the world are all in Africa. 

Eve: [00:31:37] Oh, interesting.

Sam: [00:31:39] We have…  

Eve: [00:31:40] Except for Melbourne, Australia. 

Sam: [00:31:43] Well, no, as a city it doesn’t even come close. 

Eve: [00:31:46] Oh, I think it ranks, it’s really. No, I read somewhere it was the second fastest growing city in the world, so I’m not sure… 

Sam: [00:31:52] For the next 15 years – I’ll share with you the UN study. 

Eve: [00:31:55] Okay. 

Sam: [00:31:56] Exactly. And I want everybody to take a look at that. But it is, it’s incredible. 

Eve: [00:32:02] It’s exploding. 

Sam: [00:32:04] It’s a young population, but a lot of the cities have the infrastructure and the housing. So, for example, take Addis Ababa. It is, it has the infrastructure and the housing made for 500,000 people. But it’s a city of 5 million. It is growing at a much faster pace than the city was ever designed for because we’re talking about Ethiopia as a country in 1990 had a population of 42 million. Right now, we’re a population of 120 million. 

Eve: [00:32:33] Wow. 

Sam: [00:32:34] So, a much, much faster growth where infrastructure hasn’t kept up. So, there’s a huge demand for housing. And the more housing you just patch in, that is a strain on the infrastructure because the infrastructure needs to also be designed for that. So, you have an opportunity to build smart cities, to build self-sufficient communities. You’re starting to see innovative solutions that are trying to adapt local building materials instead of importing building materials or using traditionally Western building materials and steel or cement. There are modern mud houses that are incredibly beautiful and well designed for insulation, in country. You will see adoption for modular construction. You’re starting to see, and we have supported and funded a project, for example, in Nigeria, a project called Butterfly Island. 

Eve: [00:33:33] I’ve talked to him, yeah. 

Sam: [00:33:35] Yeah, a small city where they’re building really exciting communities of, a community of 100,000, a community of 50,000. But anybody that is working on modern building technologies, brand new way of building, building materials, they need to go to Africa. We have more cement factories, more building material factories being built every day. You have companies like, Brimstone Energy that have reinvented the way we make cement. So, Brimstone is, has designed, and this is a couple of scientists from Caltech, that have taken instead of having limestone, because when you want to make Portland cement, limestone is your raw material. Limestone, you heat it up, it automatically generates calcium oxide, which is what you need for, Portland cement, but also carbon dioxide. But they replaced it with calcium silicate, which is black rocks. And they’re are 200 times more abundant than limestone. But when you process calcium silicate, you’re able to produce Portland cement and silica, but in a carbon negative process. 

Eve: [00:34:46] Interesting. 

Sam: [00:34:46] We’re starting to see more of those type of cement facilities that are entirely reimagining, again, the same identical Portland cement, but reimagining the way it’s made. They will get adoption in Africa. The housing demand in Africa is high. Every government, every government that is going through an election, the one thing that they’re asked, the one thing that they keep on promising, is affordable housing, affordable housing, affordable housing. Jobs and affordable housing are the bottlenecks but they could also be an innovative linchpin for some of the most exciting business models, some of the most exciting building materials companies to come up and build housing the right way. 

Eve: [00:35:29] So, for a real estate entrepreneur like myself, I love seeing new things. I’ve never been to Africa. I’ve traveled all over the world, but not Africa. What would be the first place you’d suggest I go? I love cities. 

Sam: [00:35:41] I’m biased, of course I’d like you to go to Ethiopia first. Ethiopia, Addis Ababa and explore what Addis Ababa has done. I mean, this is an open invitation. We would love for you to also go to Kigali. They’ve done a really good job of being a welcoming environment, specifically for housing entrepreneurs. You get tax benefit, tax holidays like ten, 15 years, tax holidays. Gabon is another really exciting place, Senegal. And we could share information around, kind of, the governments that are being quite open to attract investment, to attract entrepreneurs to come and build their creative solutions. I’ll be remiss not to mention, for example, what Habitat for Humanity is doing, Jonathan’s leadership there with innovative platforms to attract and bring in building technology innovators together and accelerate them, but also collaborate with them to build. So, it’s an incredible place. Africa is very, very beautiful and welcoming, and we would love for you to come there. 

Eve: [00:36:52] Well, it’s risen to the top of my list after this conversation. 

Sam: [00:36:56] We need, yeah, we need to get you out there quickly. 

Eve: [00:37:00] So I’m going to go back to your background. You were born in Ethiopia and you emigrated to the US. I watched the little video clip when you were accepted to, I don’t know how many universities just four years after you arrived. That was pretty amazing. So, what took you from that early beginning to where you are today and the path you’ve chosen in your life? 

Sam: [00:37:24] Oh, that’s a really good question. You know, one thing I would say is, for me personally I have been the beneficiary of the generosity of strangers. I have asked for help. It’s just all of us need luck. My story would not have been possible if I had stayed just in Ethiopia. The American opportunity was incredible. But even my opportunity in the US would not have been possible if it wasn’t for individuals that are just asked and that have transformed my life. So let me give you just a couple of examples. One was, so when we came to the US, my dad used to be minister, uh, head of transportation in Ethiopia, and he was a prisoner there as well, a political prisoner and came here and was driving a taxi in DC. 

Eve: [00:38:17] Oh. 

Sam: [00:38:18] And he was also a Parliament member. From being a Parliament member and as minister to being a taxi driver. But but one thing he wanted for us is to get a good education. He was like, I’ll do my work and my mom as well. When my mom was a teacher in Ethiopia, became a parking attendant. But when he was driving his taxis one day and this was like six months after we have arrived, this was in 2000, I was 13 turning 14 in 2000. And a passenger in his taxi, a random white guy, was having a conversation with him. And and my dad was like, I want my kids to go to the best schools. He didn’t even know which one was the best schools. And this guy said oh, that’s wonderful, like, does he like engineering? And he was like, yes, yes, yes, he does. And he was like, oh, I read in my alma mater at MIT, there’s this Ethiopian kid that did his undergrad at MIT. Now he’s about to do his PhD. His name is Solomon Assefa. You should reach out to him. And my Dad writes the name, comes home to me. He’s like, you need to call this guy. So, I went to the MIT database, found his name, send him a random email saying, oh, you don’t know me, just arrived in the US but would love to go to this place called MIT. 

Sam: [00:39:31] I wasn’t even sure. And guess what? 24 hours later I get this two-page, like detailed, what became my blueprint of like, good thing. If you’re very serious, this is what you need to do. Take the most challenging classes. These are the various things that you need to do – da, da, da, da, da. Boom, printed it, put it on my wall, and that was my blueprint. And the fast forward, four years later or three and a half years later, I was fortunate enough, and there are so many others, my teachers at my high school and others I said, I want to do this, can you help me? Boom, they were there. After school. Then, became valedictorian of my school and got accepted to all of the top schools and then I reached out to him saying, you don’t remember me, but three and a half years ago, you really changed my life. You told me it was possible and that I could do it. I followed that blueprint. It worked, and I’m about to come for an admit weekend at MIT, would love to meet you. Then the guy goes oh, my God, [inaudible] I’m so glad. So, we met and we’ve been kind of really good friends ever since. And he’s… 

Eve: [00:40:40] That’s wonderful. 

Sam: [00:40:41] Yeah. My partner in our venture fund now, again, the generosity. Going out there and asking. He had, for the projects that I did when I was at Stanford. Nobel Prize winner Dagga Shroff, who won the Nobel Prize in 1992 for Superfluidity of Helium, became my partner in a project that we did where we helped kids. In East Palo Alto, learn science and technology by transforming golf carts. 

Eve: [00:41:08] Right. 

Sam [00:41:09] And so a lot of time the key thing is going out there and asking has been has been the thing for me and giving back. 

Eve: [00:41:16] Do you think that generosity is unique to America.  

Sam: [00:41:21] From strangers? No, it’s not. But America, the opportunity merged with the generosity to help. Unlocks incredible opportunities. 

Eve: [00:41:31] But speaking to you, Samuel, I’m sure they got a lot out of it, too. It wasn’t just generosity. So, but… 

Sam: [00:41:39] But for most of them, it came out with no currying favor, or looking ahead. Yes, they really wanted to help. And yes, like, we became great friends and we’ve invested together and we’ve done stuff. And, you know, a good mentorship is rewarding for the mentor as well as the mentee, the sponsor. And we all need to do that out there. But in the US, the opportunity, taking advantage of those really generous connections and supports have been very, very helpful for me. 

Eve: [00:42:14] A couple more questions. What’s the entrepreneurial space like in Africa? 

Sam [00:42:18] Again, another really good question and want to be careful in how I answer it because everybody, like a majority of Africans, are entrepreneurs by necessity. Every subsistence farmer is an entrepreneur, that owns his own little land. You go to the city, be it the shoeshine boy or others, they’re all entrepreneurs. There’s a difference between entrepreneurial by necessity, because there are a lot of them that will tell you, I won’t trade that for a steady job and for a predictable way that could support my family. But it’s built that entrepreneurial spirit. It’s about survival. Life is challenging in many parts, but there is ingenuity.  

Sam: [00:43:02] Incredible ingenuity, sadly, is not met with resources. So they are not able to scale up what they could do. But recently you’ve also seen entrepreneurial spirits flourishing in the tech sector, in the mobile sector. Where, you know, the best mobile money project came out of Africa with M-Pesa out of Kenya. You have a lot of innovative solutions from farm tech, agritech and insurance tech that are just flourishing all over the continent. And it makes the continent have a very dynamic path, and it’s entrepreneurship that will take it to the next level. But what it lacks is the resources, funding, mentorship from other businesses. There’s angel investment and risk capital from those that have done it. It’s not there as much. It’s still family and friends, and it’s very, very challenging expecting somebody to be able to do that. 

Eve: [00:44:03] Yes, it is. 

Sam: [00:44:03] Structures need to be in place, but that, it’s there. It’s the entrepreneurial and it’s a young, young continent. More than 50% of Ethiopians are under the age of 15. 

Eve: [00:44:16] That’s really interesting because, you know, necessity is the mother of invention. I grew up in Australia when it was, I think, much more entrepreneurial, now Australia has become very wealthy. It’s an amazing place, absolutely gorgeous. But I think with wealth comes complacency and less entrepreneurship. And that’s, there’s this is wonderful sort of balance, right, you’ve got to get to to keep new things happening, I think. 

Sam: [00:44:45] No, you’re absolutely right because I mean, take the US, you have places like Silicon Valley and Austin and parts of pockets of the US that have been quite entrepreneurial in the tech sector. But we need entrepreneurship everywhere. We need, and you’re right, like, it does breed complacency and we’re starting to see climate change is really putting a bit of a fire on many people. You know, scientists that would have been comfortable working in a big company are very much demanding to go out there, and they’re quitting to start their own companies. 

Sam: [00:45:29] So I think we want innovation to happen in every sector. You know, sadly a lot of Internet based or software-based innovation limits itself in a few sectors, but we want to transform the way cement is made. We want to transform the way steel is made. Agriculture has been stuck. It’s a 10,000-year-old technology. If Jesus is to come back, we still make things exactly the same way, our protein and carbohydrates. But there are better ways and we’re starting to see them and we’re starting to see this extremely unprecedented excitement to reinvent the way we do things. 

Eve: [00:46:04] So one more question for you, and I’ll leave you alone. What keeps you enjoying it? What keeps you up at night? 

Sam: [00:46:12] So, well, the main one is am I being a good dad? So, I’ve got three kids. Dad, that has been the biggest job, the biggest project I’ve ever undertaken. 

Eve: [00:46:23] It’s A very big job, yeah. 

Sam: [00:46:24] That keeps me up at night. The other one is, you know, I kind of, I’ve been extremely fortunate in my life to have traveled a lot to really call the US and Africa and even parts of Europe, my home and at the end of the day, we are a global citizen. But at the end of the day, a lot of innovations and advances, there’s a lot of waste in certain places, but shortage in many other places and there’s this disconnect and you feel hopeless. It’s like, how do we connect it? Because it’s just even food production there’s excess here in the US and Europe and there’s shortage in many parts of the world, but there’s enough that is already being made. 

Sam: [00:47:11] How do we create that equality and equitable sharing and innovation and growing together, but connecting and shrinking our village to this global village of the human tribe. It’s something that we all, you know, aspire to see. Sometimes you get, you’re very proud that things are going in the right direction, and at times you’re really depressed because we’re really separating even further. 

Eve: [00:47:39] Yeah, it’s not really a global economy yet, is it? No. Well, this has been absolutely delightful. Thank you very much for joining me. I’ve thoroughly enjoyed myself. 

Sam: [00:47:48] Thanks for having me. 

Eve: [00:47:50] I can’t wait to hear more. 

Sam: [00:47:52] Absolutely. We’ll be looking forward. Thank you so much. 

Eve: [00:48:06] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. Please support this podcast and all the great work my guests do by sharing it with others, posting about it on social media, or leaving a rating and a review. To catch all the latest from me, you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing, head on over to smallchange.co where I spend most of my time. A special thanks to David Allardice for his excellent editing of this podcast and original music. And a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change. 

Image courtesy of Samuel Alemayehu

Cut My Timber.

In 2010, Greg Howes co-founded CutMyTimber, a prefab mass timber company based out of Portland, Oregon, and he remains a partner at the company. CutMyTimber works with architects, structural engineers, builders and other fabricators, to supply custom mass timber products for a variety of building types, ranging from small cabins to 500,000 sf commercial buildings.

CutMyTimber has created products now used in  hundreds of buildings in Europe, Canada and the U.S. They also fabricate green wooden buildings to the “passive house” and net zero energy standard and are currently developing their own  line of mass timber ‘tiny houses’ as well as a new building system for both multi-family and commercial buildings. The company collaborates with the College of the Rockies, in British Columbia, to teach modern building systems, digital manufacturing, Cadwork (a virtual design software), and green building techniques to students in their Timber Framing program.

Greg is also a co-founder and board member of the AEC (Architecture, Engineering, Construction) Hackathon for developers and designers to collaborate and work with new automation, AI, robotics, etc. to look for solutions to daily problems in the built environment. Greg and his team have organized over 48 events globally to date. An AEC Hackathon will take place in Hangzhou, China, this coming December, and events scheduled for 2023 in Austin, Copenhagen, Dublin, San Francisco and Stavanger. He also organized “Mass Timber March Madness 2021,” a series of webinars that spanned a month, featuring speakers from around the world discussing mass timber production, general contracting, architecture, government,  sustainable finance, and tech.

Read the podcast transcript here

Eve Picker: [00:00:07] Hi there. Thanks for joining me on Rethink Real Estate for Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. And speaking of building better, I’m very excited to share that my company, Small Change, is now raising capital through a community round that is open to the public. Small Change is a leading equity crowdfunding platform for impact investment in real estate. For as little as $250, anyone 18 and over can invest in Small Change, helping to fuel our growth as we disrupt the old boys club of capital that routinely ignores so many qualified people and projects. Please visit Wefunder.com/smallchange to review the full details of our raise and to make an investment if you can. And remember, investing is risky. Don’t invest more than you can afford to lose.

Eve: [00:01:46] My guest today is Greg Howes, co-founder of Cut My Timber. Cut My Timber is a fabricator of timber and steel components for the entire building industry. Their projects are spread as far as Alaska, Quebec and Australia, with production based in Portland, Oregon, and an office in Vancouver. They are able to make highly complex and efficient building systems available to both large and small companies, as well as to individual independent builders. Cut My timber uses state of the art computer software to optimize projects. This optimization results in less waste and offcuts, so they can build greener at lower cost. And now they are pushing their technology even further, building to passive house and net zero energy standards. Finally, let’s not forget the mass timber tiny homes they are developing. Listen in to hear more. If you’d like to join me in my quest to rethink real estate, there are two simple things you can do, share this podcast and go to rethinkrealestateforgood.co, where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:03:13] Hi Greg, Thanks so much for joining me today.

Greg Howes: [00:03:16] Good morning.

Eve: [00:03:16] So, you’re really heavily involved in the mass timber industry. Can we just back up a little bit and you tell me what mass timber is for people who don’t know?

Greg: [00:03:29] Yeah, I think it’s not really come on the radar in the US, except over the last ten years. And then very slowly, it’s been a real niche market. Essentially, I think a different way to think about it as heavy timber as opposed to two by fours and two by sixes. It involves glulam beams and also now increasingly what’s called cross laminated timber or nail laminated timber. And a simple way to think of that as really thick plywood. But you’re essentially making it out of often two by sixes and you’re stacking them, a layer of them, and then you make another perpendicular layer and glue those together, then typically do a third or more layers. So, you have it almost like a very thick sandwich of lumber and it comes in very, very big panels. I mean, you know, even larger than like ten by 30 or 40 feet. And that’s a single panel. It’s very strong. It’s obviously very thick. And that is used in many ways for walls, typically, floors, roofs, ceilings with it in buildings and mass timber in my research was actually, I mean, cross laminated timber itself was invented almost a hundred years ago actually in Tacoma, Washington.

Greg: [00:04:48] But it really took off in Switzerland and Austria in the nineties and they’ve been doing a lot of buildings with it. Initially, it started as a way to use less strong wood, not even almost waste wood, but it was a way to take wood that wasn’t structurally as strong and essentially through engineering and making this bigger, gluing it together and using automation to manufacture it has more engineering strength. And what’s happening now is that has come into the US market where again, following the Switzerland, Germany and Austria in doing this, and it’s really booming. And when I think of its most attractive properties are, one that it quite literally it’s very difficult, it doesn’t burn. It does burn, but it’s like having a campfire and trying to start the campfire. Not with twigs, but big logs. The outer layer, when it does burn, it’s really hard.

Eve: [00:05:43] I do that all the time.

Greg: [00:05:45] Yeah.

Eve: [00:05:47] A lot of smoke. Goes out quickly.

Greg: [00:05:50] Well, it does. And then it creates that char layer on the outside. So, even if you have that big log and you throw it on the fire and you leave it on all night, even on a big raging fire, it generally won’t burn through because it will have that char layer on the outside. So, it has some really good properties for fire and again, it can be very, very strong. And another big advantage is you can construct the buildings very rapidly, because essentially you’re building digitally before you build on site and you’re essentially manufacturing and custom cutting all of the pieces. So, let’s say the cross laminated timber and all the beams and all the connectors, you’re essentially doing that work before the trucks go to the job site and assemble the building. And when you do that, well, it can be really, really efficient. I give it many examples where buildings are literally going up in a matter of days, and this includes buildings of many stories, including ones we’ve been involved in. You’re doing a five-story building. The foundation is in all of the concrete and then you come in with the trucks and essentially you have a crane, and everything gets assembled extremely rapidly. And then the building continues with all of the things that go inside the building afterward. I think it’s a big advantage.

Eve: [00:07:04] So, what’s the primary problem that we’re trying to solve with mass timber?

Greg: [00:07:08] Well, big not only with mass timber, but in construction in general. We don’t have enough buildings where we’re short of builders and also, we want to build more sustainably. I think there’s a growing interest internationally. I’m obviously in my niche market, so I view the world from the mass timber perspective, but we need a lot more buildings and we need to figure out how to build them more sustainably. As we know, concrete is responsible I think for 8% of the global carbon production, just through making concrete. And so, we need to use more environmentally friendly materials. We need to figure out how to build faster, smarter, less expensive. And we have to do that in a world where we don’t have enough to be blunt builders. And so, how are we going to do that? So, I think creating building systems is one of the best answers. And specifically with cross laminated timber, you can build much higher. There are buildings, I think the biggest one in the world now is in Milwaukee, The Ascent building.

Eve: [00:08:15] Yeah, I just read about that. Yeah, yeah.

Greg: [00:08:18] I think it’s 26 stories, and there are buildings much, much taller that will be made primarily from mass timber. So, there’s a boom in, let’s call it timber skyscrapers. But I think every building is actually a hybrid of materials, so it does have concrete in it and wood and metals, just to different ratios. The big problem I think we’re trying to solve also as well. How do we take Woods and make them stronger through engineering processes or through the factory? How do we do more with wood? And use it more efficiently. And what I think the mass timber boom has created is a way to build taller with wood. And because when you build this way, unlike conventional building, and I’ve been a builder for 25 years, you can go to Home Depot and order a lot of two by fours and then try to figure out how to build your house on the job site. With mass timber, that’s not really realistic, simply because the beams and the laminated timber products are too big. You can’t really cut them precisely on the job site. So, you have to do that work in a factory. Yeah.

Eve: [00:09:33] Yeah. So, basically, it’s like ordering a steel member or a cross line beam ahead of time and making sure it’s sized correctly. Like we’ve been actually doing that for years, right? But now it’s shifting to it sounds like many more elements in the building.

Greg: [00:09:49] Yeah, we’ve been doing it for years. If you drive by and you see a steel building, generally all of those parts or the majority of them are pre-cut and predrilled and the builders job is essentially to assemble those and figure out how to do that efficiently. And we’re applying the same thinking to mass timber specifically.

Eve: [00:10:09] How does this help forests? How are we going to save our forests if everyone’s going to be using timber buildings?

Greg: [00:10:15] I am not a forestry expert. There are many people who are. I defer to them. We do use wood. Here’s my question, the wood we do use, we should do more with it. We should use it efficiently and we should use lumber that comes from forests that are well managed. They’re sustainably managed. In the US, there are a lot of statistics, we’re actually adding to our supply of forestry. We’re having more forests that we can harvest. And the US is the biggest country in the world to build with wood. About 93% of Americans lived in a wood framed home. So, my answer to that is like, well, let’s use the resource that is sustainable and renewable. Let’s use specifically wood that is from a sustainably managed forest. If we use good building systems, we can reduce the amount of wasted wood, a lot. We can quite literally have only a couple percentage points of waste as opposed to conventional construction. That, as you know, creates a lot of the waste.

Eve: [00:11:23] A lot of waste, yeah.

Greg: [00:11:24] Well, I think we can build buildings that use wood, use it more efficiently. We can do more with that wood because we’re creating things like glulam beams and cross laminated timber, and we’re figuring out how to do that efficiently. And we can use the forest the same way we build better and more sustainably with them.

Eve: [00:11:46] What percentage of buildings being built today use mass timber, and how do you think that might change over the next five or ten years?

Greg: [00:11:54] Oh, of all the wood buildings in the US, the percentage that use mass timber is far less than 1%.

Eve: [00:12:01] Oh, it’s tiny.

Greg: [00:12:02] It is a tiny niche market, it is growing. There’s quite a few people in the industry that think the US will become the largest market in the world for mass timber buildings in a short number of years. The same way the US already is the world’s largest market for wood frame buildings in general. But because mass timber is very good for specific kinds of buildings, it’s highly likely that we’re going to become the biggest market of all.

Eve: [00:12:30] And how quickly is that going to happen, do you think?

Greg: [00:12:32] It’s not a demand problem. I think you read the same things I do. We’re short of houses at every price point in many parts of the country. So, we don’t have enough buildings. We have people who need them. It’s difficult to build. I think the growth of building systems where you’re essentially already, call it prefab, buildings is going to grow because it’s really one of the only solutions. We’re suddenly not going to have a lot more carpenters. And it’s the same reason I got into this. It’s like, how do I build more buildings? How do I deliver more complexity? And I think the answer is through building systems. Mass timber is booming, where our factories based in Oregon, Oregon produces the most softwood lumber of any state. There’s a lot of demand out here. Most buildings are, in fact, wooden buildings, and where mass timber is the best product for that type of building, there’s a lot of demand. It’s actually growing faster than the supply. And I would argue that the shortage is of factories that do create the kit of parts for mass timber buildings. There’s not enough of those, and it takes years to build them. And they’re expensive. They’re full of very expensive machines.

Eve: [00:13:53] The actual factory, yeah.

Greg: [00:13:56] There’s interest in mass timber and I think it’s growing, and there’s more interest than there are available supply, and the supply comes through those factories and there aren’t very many of them. That’s the constraint to its growth.

Eve: [00:14:10] So, are you seeing people investing in factories like that? Like are people beginning to understand that issue?

Greg: [00:14:19] Well, there are investors coming in. I’ll give an example. In Europe, Stora ENSO is a Swedish Finnish company. They keep building factories, they’re one of the biggest producers of cross laminated timber in the world. They continue to build more factories and demand exceeds supply in Europe as well. We are having some factories come into the Canadian and US market. One of the biggest suppliers in the world that’s new is a company called Sterling, based in Chicago. Their product just became certified as a cross laminated timber panel, and it’s certified in that it’s legal to use for buildings. So, they’re one of the world’s biggest producers now. So, we’re seeing more companies invest in Canada and in the US. I know them, it’s still a niche market. But the constraint, the bottleneck right now is, well, we’re going to have we have a lot of lumber, we’re going to have more mass timber product, but we need those factories that create those custom kit of parts. That’s what we’re short of. That’s the big bottleneck.

Eve: [00:15:26] That’s interesting. And other than that, is there any specific work that needs to be done to advance mass timber? I mean, you talked about the fire resistance of these really heavy pieces of engineered lumber, right?

Greg: [00:15:39] Correct.

Eve: [00:15:40] Does the building code recognize that? What needs to be done to advance the idea?

Greg: [00:15:45] A lot of work needs to be done on many fronts. And I want to clarify, I am not a forestry expert. I am not a fire expert. I’m not a structural engineer. There are lots of great organizations, people doing the research and also the building codes are being changed and updated to allow for these tall buildings in more municipalities. A big challenge we have in the US, as you know, building codes vary a lot.

Eve: [00:16:17] They do.

Greg: [00:16:18] Based on the municipalities. And not only do the building codes vary, the fear among the local building code officials, but also among the builders. You have a lot of builders, architects and structural engineers, and they hear about this mass timber thing, but they haven’t worked with it before. And there’s a lot of perceived risk in using a new product or a new process. And so, the good thing is there’s a lot of research being done for those interested in fire and structural engineering. I would point people often to research that’s being supported by the US Forest Service and others. It’s happening at a lot of universities.

Eve: [00:16:57] Yeah, it’s really interesting. So, it’s really early days. It’s pioneering efforts still. But you know, I’ve also heard people say that there’s a mass timber boom on the way. Is that, do you think that’s true? Is that going to take a while to ramp up? It sounds like there’s a number of issues to resolve first.

Greg: [00:17:13] Again, since I’m in the industry and have been for decades, my perspective is very biased. I think a lot more people are hearing about it if they’re paying attention at all to what’s happening in the world of construction and specifically with wood, I would say there’s definitely a boom happening, certainly across Europe, Australia, New Zealand and in Canada and the US. When I speak to people in the industry, it’s very much boom times. And the biggest conference that happens in the US is the Mass timber conference in Portland, Oregon. About every March a few thousand people attend and when we were there last year, everyone’s like talking about how it’s extreme boom times. There’s essentially too much work and not enough supply.

Eve: [00:17:59] Interesting. And who’s at the forefront of the mass timber movement in the US?

Greg: [00:18:03] Oh, that question is similar to asking who’s at the forefront of construction in the US. It needs to be much more nuanced.

Eve: [00:18:13] Well, nuance it for me. Okay.

Greg: [00:18:19] I think what it is, when working with mass timber and to be able to do it well literally requires some experience. Because it’s a different process. It’s not designing a building and here’s a ten-story building, should we build it out of concrete, steel or mass timber? And then say, well, who’s the lowest bidder? We’ll build it that way. That literally doesn’t work. The architects are learning how to work design for mass timber. How does it work well, and when is it the right product? The same goes for the structural engineers. If you haven’t worked with mass timber buildings before, there’s a tendency to over engineer. And over engineering makes buildings more expensive and take longer.

Greg: [00:19:04] And builders, as a builder myself, and I’ve been one for 25 years, if you haven’t worked with mass timber before, the question becomes, well, how do I price that out? What is it going to cost me? And too often in construction, your big cost are your materials and your labor. But if you do mass timber efficiently, much of the labor is moved into the factory for the mass timber frame because you’re figuring that out, you’re shipping it to the project. It’s hard to know how to price that if you’re a general contractor who’s never worked with mass timber or prefab before. There are quite a number of people in each of those categories, architects, structural engineers, builders, subcontractors. And these factories that produce the kit of parts. There’s a small number of each of those who have experience, but there’s nearly exponential growth on the total number of mass timber buildings. We’re lucky that we’re out in Oregon. Oregon produces so much wood. The state’s been very supportive of mass timber and the US West Coast, California, Oregon and Washington. That makes up about 50% of the total market for mass timber currently. Canada is doing a lot as well.

Eve: [00:20:16] That makes sense. You know, I can understand why it’s been ahead in places like Finland and Sweden, the very northern Europe, where it’s very long, cold winters. So, this manufacturing system would permit you to be building, you know, when you really can’t work outside, right?

Greg: [00:20:32] Correct.

Eve: [00:20:32] Or not very comfortably. So, is that true too? Do you think northern states are taking onto this idea faster than southern states in the US? Or don’t you see that differential?

Greg: [00:20:43] I’ll touch on the Nordic Scandinavian countries. Europe is so different than the US because let’s say this, over 80% of the buildings in Europe as a general rule of thumb, are made from concrete. That’s essentially the primary building material. The more you go north, let’s say, to Sweden, the more wood there is, the more it’s used in construction. And even in Sweden, I like to tell people prefab, single family housing is the norm. Prefab for your housing, that reached 50% market share in the 1950s. So, this whole idea of prefab and prefab using wood is quite common in Germany, Switzerland and Austria. But it’s still like 10% of the buildings in Scandinavia, it’s much more. How will that come into the US? I think it will, not only here on the West Coast, will it be very common. It will become more common in Georgia and Alabama. They have a lot of loblolly pine there and there’s a lot of it. Some would argue there’s almost too much of it. And so, there are some new factories coming in to the southeast of the United States that will begin to produce more and more mass timber, very cost effectively. So, that supply will ramp up a lot. But again, the bottleneck will still be those factories that take those commodity wood products and make them into buildings.

Eve: [00:22:06] So just changing gears a little bit, I’m just wondering a little bit about your background. How did you get involved in mass timber?

Greg: [00:22:13] I’ve been a builder of homes for most of my life. I’ve also worked in tech, and had startups, and worked in other countries and other industries for short periods of time. But the majority of my work has been in building. Over 20 years ago after I had a startup in Silicon Valley, and we had the whole crash in Silicon Valley, again around that was exactly when we started our company. So, our timing was bad. So, we had a company not related to housing, that shut down. And I said, look, I’m going to go back to building, but if I’m going to go back to construction, I want to do it efficiently. I want to figure out the best way to build. And so, I toured many factories in Canada, the US and Europe, and said, I want to build with wood on the West Coast. How do I do that efficiently? Because life is too short to become an architect, engineer, builder and everything else all at once. I need to use a system and I want to use the best system for building with wood. So, I did tour all of those factories and I recognize it’s a question of software and it’s a question of systems. And that’s when I encountered mass timber. And so, I specifically focused in on that and ask, well, who’s doing that really, really well? And 20 years ago in the US, almost no one was.

Greg: [00:23:44] So, the leaders were in Europe. So, then my research led to, well, what are we learning from the Europeans and how do we apply that here? And then I found the person who’s now my business partner, Stefan Schneider. He was a Swiss immigrant. He’s been here for 20 years, and his job for six years was setting up factories. He was the person you called when he wanted to enter the industry.

Eve: [00:24:07] Interesting.

Greg: [00:24:08] And I said, well, look, I really want to build with wood. You’re the person who’s the most knowledgeable in my experience. Why don’t you start your own factory? For the last six years, you’ve been setting up other people’s factories across Canada and the US. Why don’t you come to Oregon and start your own factory, which he did. So, we’ve been, since 2010, we’ve had a factory in Oregon and we’ve been fabricating mass timber components, kit of parts, on literally hundreds of buildings. And then I want to emphasize, in doing so, we are one of a team of companies that do mass timber buildings. So, we have a pretty big network of architects, engineers, subcontractors, assemblers, many other people. Right?

Eve: [00:24:54] Your company’s got a great name. Cut my timber. I really like that. So, what sort of projects have you built and what does it look like? Do architects come to you or clients or all of the above or engineers? Like, how do you work?

Greg: [00:25:08] All of the above. There is no single mass timber marketplace. Let’s use an example. Let’s say Eve Picker wanted to do either a ten-story mass timber building or you wanted to do ten single family homes using mass timber. And you ask yourself, well, where do I go to do this? Who does this? Who does it well? There isn’t a single place on the web where you can go to find that information. And many of the companies that actually do it are booked out for years, or at least for a very long time. So, they’re like, well, look, it’s great you’re interested in a project, but we don’t have capacity. That’s kind of a problem that may change because more stuff’s coming on the web. But again, there’s no central hub. What happens to us?

Greg: [00:25:51] We’ve been in the industry long enough that we get approached generally through company and people we already know, and they are architects, general contractors, general engineers, some real estate developers. They’re interested in mass timber, and they ask around and find out, well, who does this, who has experience doing this? And they come to us and sometimes we play a big role in the project and other times we’re a subcontractor supplying a small part. I’ll give you an example. There’s an extension of the Portland Airport in Portland, Oregon. That project is over $1,000,000,000. We are one of hundreds of companies supplying that project, so we do some wood fabrication. On other projects, we’ll do a single-family home, let’s say a timber frame or glulam home, we’re the major supplier. We do commercial buildings. We supplied big beams to the new Adidas headquarters in Portland, Oregon. That’s over 400,000 square feet. And then we’ll do event structures like the one in the background behind me.

Eve: [00:26:58] Which is amazing.

Greg: [00:26:59] If you’ve ever watched a TEDx talk, we created the stage for the TEDx talk. That’s 12,000 individual pieces of wood specifically, mostly glulam. And that was all modeled and then fabricated and shipped up as a kit of parts. And that’s a good example of another mass timber project.

Eve: [00:27:18] That’s a really big range. Yeah. So, how do everyday people get into this market. If I just wanted an affordable home, but I really care about the environment and I want to find someone to help me build a timber home, the entire home.

Greg: [00:27:36] There are multiple ways to go about that. There are some for a single-family home. And again, with mass timber, let’s use some examples of a… There’s the homes constructed with essentially two by fours, two by six is in small beams. On the heavy or mass timber side of things, there are homes that are, let’s say, using a lot of glulam beams. Um, there are timber frames. Those are solid wood not engineered wood, it’s just solid pieces of wood. And then there are many homes that are a hybrid. They may be heavy beams and CYP panels, structural insulated panels. So, there are a growing number of suppliers who try to be a one stop shop. That you’ll go to them, and you can buy the home you want from their kit of parts, from their catalogue, or you can have a custom home designed and manufactured and built for you. In this big country, there are many options.

Eve: [00:28:35] There are many, many options. Yeah.

Greg: [00:28:38] And the price points are very varied as well, too. Some companies will focus on accessory dwelling units for your backyard. Other companies are doing big custom homes in ski resorts. It’s very varied.

Eve: [00:28:51] Right. So, I’ve heard whispers from you that you also want to manufacture houses. You want to talk about that, as a way to really produce housing quickly?

Greg: [00:29:03] Yeah. Our company and others, we think a way we can scale and become more efficient and make the whole system better is essentially through developing a catalog of buildings and a building system. Right now, everything, as you said, is bespoke. We have one project like the one behind us and then the next one we’re doing, working on an airport, or we’re working on a large commercial building. That works, we’re very busy doing that, but it requires very different skill sets. And we work with billion-dollar construction companies and the next time we’re working with a general contractor with five employees. So, we have a good business doing that. But we think the way forward, we want to use some of our capacity and we’re developing a line of single-family homes. And so, we’ll sell those as a kit of parts to other builders and to, let’s call it the do-it-yourself crowd, that they do want a mass timber, or a heavy timber home and they want it as a kit of parts. So, we are developing that. We don’t have it ready yet, but we are developing that, and we are building a new factory. Our current one is in Portland, Oregon. We’re building another one that will open up in the first half of next year outside of Portland, and we want to use some of our capacity to do that, that catalog of single-family homes. And we will, and we’ll have that ready in late spring.

Eve: [00:30:39] It feels a little retro, like going back to build your own log cabin, right?

Greg: [00:30:43] It is, But the housing demand is so extreme. So, I think the solution to creating more housing is there are millions of solutions. There have to be many ways. Some people want a big house, some people want a small house. Some people want a net zero home. So, we want to be one of the many providers of solutions.

Eve: [00:31:02] Well, it’s really interesting. So, final question for you. Are there any other current trends in mass timber that we should keep an eye on, like new products emerging?

Greg: [00:31:11] Here’s what I think you should look, when you look at mass timber. Think of, there’s cross laminated timber that’s glued together. There’s also nail laminated timber where the layers are connected with nails and then there’s double laminated timber. So, go into the whole category, understand that there are many kinds of heavy or mass timber. An exciting trend, there’s growing interest in net zero building. There’s growing interest in Passive House. So, the combination of mass timber being fabricated in a factory and they’re addressing the market of green building and specifically net zero and sustainability, where those trends are converging. Is there a way to build in a factory smarter, greener, more sustainable homes for the people who want them? And will these building systems make them more affordable? That’s what excites us, and I think those are all growing trends.

Eve: [00:32:08] Yeah, I agree with you. They’re definitely growing. Well, this is really exciting. I hope you stay in touch and let us know when your factory opens. I want you to send me the catalog.

Greg: [00:32:18] I will. And here’s a real convergence that I think aligns with all the innovative work you’re doing in crowdfunding. I do want to see crowdfunding merge with mass timber and prefab. So, people who want a home or they want a community are finding one another through crowdfunding and they’re working with the factories that can actually produce the buildings either as an investment or for the home they want. That excites me as well.

Eve: [00:32:50] Yes. It would be a lovely world, wouldn’t it?

Greg: [00:32:54] Well, we’ve got to make it happen.

Greg: [00:32:56] Yeah. Well, thank you very much for joining me. And I do expect to get that catalogue when it’s ready.

Greg: [00:33:02] You will.

Eve: [00:33:02] I can’t wait to see it. It sounds like a lot of fun.

Greg: [00:33:05] In late spring next year. I’ll share that with you.

Eve: [00:33:09] Thank you.

Greg: [00:33:09] Thank you.

Eve: [00:33:17] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. You can support this podcast by sharing it with others, posting about it on social media or leaving a rating and review. To catch all the latest from me you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing yourself head on over to wefunder.com/smallchange, where you can invest directly in Small Change and our mission to democratize capital formation to create impact in commercial real estate development. A special thanks to David Allardice for his excellent editing of this podcast and original music, and a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Greg Howes

Our client is the planet.

Jeremy, the founding Director of Breathe, has built a team of dedicated architects with a reputation for delivering high quality, sustainable design for all scale projects. In particular, Breathe has been focused on sustainable urbanization and exploring ways to deliver more affordable urban housing to Melburnians.

As the instigator of The Commons housing project in Brunswick, Jeremy was the driving force behind the prototype for what is now Nightingale Housing, a not-for-profit organization dedicated to providing sustainable and affordable housing. Jeremy believes that through collaboration, architects can make a real and positive impact in their community.

This belief is exemplified by Breathe’s work with other Melbourne architects to deliver the Nightingale Model, which is intended to be an open source housing model led by architects. According to Jeremy, “if you want to build something that is affordable and sustainable simultaneously, every project manager in Melbourne will tell you you can’t do that.” Instead, Breathe has defined sustainability through reductionism, identifying that what people really want in housing is good, meaningful spaces with light, outlook, and plants, rather than luxurious but unnecessary features.

As Melbourne experiences rapid growth and housing becomes an increasingly expensive commodity, Jeremy’s movement towards affordable and sustainable urban housing through stunning, thoughtfully executed projects is vital for the city’s future.

Read the podcast transcript here

Eve Picker: [00:00:08] Hi there. Thanks for joining me on Rethink Real Estate for Good. I’m Eve Picker and I’m on a mission to make real estate work for everyone. I love real estate. Real estate makes places good or bad, rich or poor, beautiful or not. In this show, I’m interviewing the disruptors, those creative thinkers and doers that are shrugging off the status quo in order to build better for everyone. And speaking of building better, I’m very excited to share that my company, Small Change, is now raising capital through a community round that is open to the public. Small Change is a leading equity crowdfunding platform for impact investment in real estate. For as little as $250, anyone 18 and over can invest in Small Change, helping to fuel our growth as we disrupt the old boys club of capital that routinely ignores so many qualified people and projects. Please visit Wefunder.com/smallchange to review the full details of our raise and to make an investment if you can. And remember, investing is risky. Don’t invest more than you can afford to lose.

Eve: [00:01:44] Three years ago, I interviewed the delightful Jeremy McCleod of Breathe Architecture, and today I’m lucky enough to interview him again. Jeremy founded Breathe, an architecture studio in Melbourne, Australia. There he delivers gorgeous and sustainable buildings to his clients. But Jeremy was unhappy with the ever-widening gap between those who have wealth and those who do not. So, he embarked on a second journey to deliver sustainable and affordable housing to everyone. Many told him that this was an impossible goal. But he completed his first project, The Commons, with accolades, three years ago. With a waiting list of over 8000 buyers, Jeremy and his team set about building lots more. This is what a great architect does. Listen in to learn more.

Eve: [00:02:43] If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast and go to rethinkrealestateforgood.co where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:03:14] Hi, Jeremy. Thanks for joining me. And I just want to say, whoa, what a difference three years in a pandemic made for your business.

Jeremy McLeod: [00:03:23] Yeah, it’s been pretty wild times. Thanks for having me back on, Eve. It’s good to see you on the other side.

Eve: [00:03:31] It is. It’s the other side. So, since we last talked, your architecture studio Breathe and your brainchild Nightingale seem to have both exploded. And I wanted to give a little background to listeners who hadn’t heard the first podcast, or maybe tell them to go listen to it. But let’s talk about Nightingale first. So, for those listeners who missed our first chat, tell us about Nightingale. What is it and where did it all begin?

Jeremy: [00:04:03] Okay, so. Yeah, Melbourne, where our practice is, is a lot like any capitalist society. Unlike the beautiful Scandinavian countries where they decide to house their people through high taxes and good kind of support networks in a good neo liberal society, our government has been underspending in housing for decades. And so, as an architect, you know, we work, historically, our choice is to do private homes for wealthy Australians or do apartments for property developers where, you know, they’re really following a profit in a complex kind of environment. So, both of those things aren’t very rewarding. And Breathe architecture, our architecture firm, you know, we believe strongly in this idea that our first client is the planet, you know, our second client is the broader community that live on that planet. And then lastly, we have the client that pays us, and we felt like doing property development apartments wasn’t achieving the first two of those three criteria. So, we built a prototype project. We finished that in 2013 and it was called The Commons, and it was an idea to kind of prove to developers that you can make a profit by building sustainable homes and building community. And so, we built this building called the Commons. And the idea was that it would be car free, carbon free, that it would be affordable and that it would be incredible. And a lot of those things came true. I mean, we shot for the stars. We kind of landed on the moon.

Eve: [00:05:50] It is incredible. It’s a beautiful building.

Jeremy: [00:05:52] Yes, Eve you’ve been here. Right. So, you’ve been to it. You’ve been to Australia, you’ve been to Melbourne, you’ve seen it. We couldn’t get the carbon free piece right. So, there was still, we couldn’t afford the non-gas infrastructure back then. But apart from that it’s a very good building. And what was interesting about that was that we then opened it up for tours, brought every developer in the city through and said, look, this is what you can do. And they all saw it as a kind of an aberration rather than a trend and said, oh, well, that’s a nice idea, but thanks very much, we won’t worry about it. But, interestingly for us at Breathe is that people just, you know, every regular day Melburnians that are writing to us saying, if you’re going to do that again, can you please let us know? Because we would like to live in a building like that.

Eve: [00:06:36] But the really important thing is that these units were also affordable, right? They were affordable to civil servants who were really being pushed out into the far nether land.

Jeremy: [00:06:51] Yeah. I mean, the whole premise of building something that was sustainable and affordable simultaneously and still profitable for a developer was really about this idea of, you know, analyzing everything. And it was about a sustainability of reductionism. So, developers view historically has been that sustainability is expensive and it’s hard to get a return on your investment. And so, we just questioned everything. So, the big thing about taking out the cars was that we saved 10% of the build cost by taking out the basement. We reduced every apartment by $40,000. We took out every second bathroom. So, every two-bedroom apartment only has one bathroom. So, we saved $9,000 per apartment. We even took out all of the individual laundries, reduce the price of every apartment by about $6,000. And when you take a second bathroom and a laundry out of an apartment, the living room suddenly gets, you know, nine square meters bigger. You know, in your space, 90 square feet, about 90 square feet bigger, right. So, the living rooms start to be these really great, you know, spaces to be in. The cost comes down in all these apartments and then we start to build really great shared spaces, like a really incredible bike park, a really great rooftop laundry, you know. And rooftop laundry sounds weird, but it’s beautiful, right?

Eve: [00:08:12] It’s absolutely beautiful, yeah.

Jeremy: [00:08:13] Opens up onto the big garden and views to the city. And these become these, kind of, social hubs where people in the building meet each other doing something really ordinary, but it actually works in a kind of safe, nice space where people actually get to break down those barriers to talk to each other. So, anyway, when we finished the Commons, we won the national award for housing with this thing, and it was quite a small building. You know, it was 24 apartments, and we won the National Award for Sustainability, which was incredible because it wasn’t a $100 million university building that was funded by some philanthropic fund. It was, you know, it was actually. Yeah, it was just a market rate apartment. So, then we wanted to get other developers to employ us as architects to do that after two years of bringing them through the building. We couldn’t find anyone that would want us to do that. They wanted to do the same as business as usual. So, we decided that I took four days off work, and I wrote a manifesto and called it the Nightingale model, and we established Nightingale housing. So, the idea was that we would share all of our IP. That we would bring architects together, that architects would lead a housing revolution, that we would democratize capital.

Jeremy: [00:09:31] It’s interesting, Eve, that you and I met and, you know, when I saw Small Change, I was like, oh, this is what I really needed back in 2015. But basically, it was peer to peer funding. Small mom and dad investors putting in like about $100,000 each to kind of crowdfund these projects, equity fund these projects. And we built the first project, Nightingale One, which finished in 2017. And then, you know, by that stage our waiting list, people who had been writing to us had grown from 11 to 57. And so, we balloted those apartments. So, we didn’t sell them through a real estate agent. We took all of the agents out, all of the marketing, all of the display suites, which all reduced the cost of the building. We took out all the gas to make sure it was 100% electric. We shared a lot of the infrastructure inside the building, like the hot water for the hydroponic heating, like the hot water for the showers. So, we got one set of plant that does all of that. It makes it really cheap for everyone living in there. These are all built to sell like market owned apartments. And 57 people entered a ballot and we balloted. We sold all the apartments in one day. And people hadn’t seen that in Melbourne, you know.

Jeremy: [00:10:46] So anyway, you know. So, that was kind of the start of Nightingale. And what’s happened since then is that a couple of projects kind of took that Nightingale model and delivered it. So, we shared that IP with other architects. You know, I actively worked with those other architects to help them deliver those projects. So, Nightingale 2 is a great example of that. And then it kind of faltered, Eve. And the challenge, I think, was that to go and source equity, to go and buy a piece of land, you know, someone needs to sign the directors guarantee on the purchase of the land. To go and secure a debt, someone has to put a director’s guarantee down, you know, to secure whatever it is, $10 Million from the bank. And the bank wants to know that the person delivering the building has done it before and that they’re good at it and that they have a big balance sheet behind them. So, this revolutionary idea for Nightingale housing, like it kind of went bananas, right? So, after Nightingale 1, we balloted Nightingale 2. And you know, we started doing all of these projects, but, you know, our demand grew so that there’s 15,000 people, over 15,000 people on a database now to buy housing.

Eve: [00:12:02] Wow, my heavens.

Jeremy: [00:12:03] But we couldn’t keep up with supply because, you know, there’s fundamental issues around, in a good neoliberal society, around risk, who’s prepared to take the risk and put their home on the line. And, you know, again, I guess risk from a debt point of view and an equity point of view, who’s going to put money into these projects because you know, who’s going to take risk on that? And so, look, the good news is that, you know, we’ve just completed like our 500th apartment and we’ve got another 500 in the pipeline. Last year we balloted $80 million worth of housing where we’ve rolled in a social housing portion so that, you know, trying to really kind of nail the affordable housing piece now means we have 20%, that the first 20% gets balloted to an affordable housing provider. So, that’ll be a charitable organization like Women’s Property Initiatives. The next 20% goes in a priority ballot. So, to you know, key service workers, nurses, teachers or to First Nations Australians or to people with a disability or carers for people with a disability. And the last 60% is balloted to, you know, to the broader waiting list. Everything sold. Now we’ve got a, you know, the new model is kind of evolved into, you know, it’s a Nightingale not for profit, so, there’s no profit in there anymore.

Jeremy: [00:13:33] And we’re now getting institutional funding from what are our superannuation funds, which might be called pension funds in the US. And we’re getting senior debt now from our major banks really through their kind of social impact arm rather than just their commercial finance arm. So, we’re getting good rates and really good engagement like we’ve had the CEO of one of Australia’s biggest banks, you know, come and meet with us, walk through the buildings, ask us what he can do to help personally and like task you know team of six of his heavy hitters to help, you know, build a specific loan product for people who want to buy into Nightingale. So, I think the interesting thing about Nightingale is this idea that it’s got a very clear narrative around it, which is that it’s a triple bottom line housing model. So, it’s about being carbon neutral. It’s about building community, not only in the community within the building, but kind of engaging with the broader community through that whole process. And then lastly, it’s about affordability and how do we get a broader cross-section of the community living there. So, it sounds it sounds pretty easy, but, you know,

Eve: [00:14:43] Well, it’s not easy.

Jeremy: [00:14:46] As you know, Eve. So, you know, and when I started there, it was, you know. Yeah, it was just an idea, right? You know, in a manifesto. And I recently handed over the reins, so I was the founder for a while. I put together a not-for-profit board. Or actually, I got some help to put together a not-for-profit board, which was really great. We put someone on to kind of run the show for a couple of years and then it just didn’t take off. And then I step back in as managing director to try and say, If we’re going to go, let’s do it. I stayed in that acting managing director for over five years, you know, and we saw massive growth and I’ve just stepped down in that role as managing director. So, you know, I’m back on the board now. So, you know, I attend six weekly board meetings. But, you know, as I stepped away, there’s now 17 staff, you know, and 500 apartments in the pipeline. And yeah, so.

Eve: [00:15:44] Is it satisfying to have built that?

Jeremy: [00:15:46] Yeah it is and you know, I was sad to step away. But, you know, I’m also the design director at Breathe Architecture and you know, it’s time that I actually give some love back to Breathe. You know, the organization that founded Nightingale. Now, you know, I feel like I need to spend some time there to go and, you know, see what’s next on the horizon, right?

Eve: [00:16:07] Yes, yeah.

Jeremy: [00:16:08] Building up to do the next thing.

Eve: [00:16:10] So, are other architects involved now? You said you have built 500 units.

Jeremy: [00:16:16] Yes. So, I mean initially it was meant to be this architect led kind of revolution and we got lots of engagement from architects to do that. Lots of challenges around funding and equity raising. And just not.

Eve: [00:16:32] It’s all about money, isn’t it?

Jeremy: [00:16:34] It’s all about money. It’s all about money. Unfortunately. This idealist has become, I’ve become much less, I’m much more pragmatic over time, which is really interesting. I was also quite scathing at the development industry when I started Nightingale, thinking that they were all evil. And now I’m. Yeah, and now, you know, I’m really embarrassed about the things that I said early on, the disparaging things I said about developers, because I just realized how hard it is and how much risk is involved. And you know that the profit margins that developers put in, while they might seem horrifically high from the outside, you know, it only takes one project to go.

Eve: [00:17:17] It’s a huge amount of work.

Jeremy: [00:17:17] Well also, they need a balance sheet to be able to fund the projects and in the event that one project fails, they need to, they need a balance sheet behind them to be able to.

Eve: [00:17:26] Especially in Australia where I really don’t understand how the financing works at all, we’ll have to talk about that. But it seems even harder than here.

Jeremy: [00:17:35] It is.

Eve: [00:17:36] It’s very difficult.

Jeremy: [00:17:37] Yeah, it is very complex. And the banks here, you know, I guess like anywhere are not interested in taking, you know, risk so.

Eve: [00:17:44] Very conservative, yeah.

Jeremy: [00:17:46] Yeah, yeah, yeah. So, you need lots and lots and lots of debt coverage, but it’s really great to be able to get to the point now where I can step away from that. I do worry for the sanity of my replacement, given, you know, it’s probably the same thing that’s happened in the States. You know, we’ve got high inflation here. We’ve got, we have had supply chain issues through COVID. So, we’ve seen massive increases in construction costs in the last two years. In one of the states here, we’ve seen like a 23% increase in construction. So, in the last year, that’s put a lot of projects under pressure. And then we’ve seen, to try and control inflation. The banks have put the interest rates up, so lending is tightening. So, first tome buyers who are our cohort are struggling to get loans. So, you know, it’ll be interesting to see, you know, out of those 15,000 people, how many can actually secure a loan to buy a property. We will see how much demand there still is out of that 15,000 for the next project, when we take the ballot.

Eve: [00:18:48] So then, yeah, I think you’ve answered this question. My question was going to be what did you have to give up on? Like your idealism was thinking, this is going to be like this, but what did you have to give up on to really make this work? Was there anything or have you.

Jeremy: [00:19:02] Yeah, well, I mean, that’s a that’s a really good question. Look, I did think that, you know, that when we first established Nightingale that it was going to be this really light touch thing, right? That there would be a couple of people with a repository of all of the information and they would share it with a Nightingale license to another architect. And that other architect would read through everything diligently. They would understand the risks involved. They would establish a company, go and raise equity, go and secure a debt, and go and buy the site and build the projects. And that it would grow, and it would just go viral. I think that was the that was the dream, right? That the whole thing would kind of happen because it was such light and demand for it. So, the thing that I’ve had to give up on is actually, you know, from being a revolutionary organization, you know, to actually have the impact that we need, we’ve become, yeah, much more mainstream. So, you know, now Nightingale, you know, has a fund it raises, you know, seed fund and equity and debt. Nightingale goes and buys the sites; it engages the architects. So, you know, we still employ.

Eve: [00:20:05] So, you’re really, that nightingale is really making it all happen.

Jeremy: [00:20:11] Yeah. So, Nightingale does everything now takes all the risks. So, as a director on the board, I still take the risk. So, we’re basically taking the risk out of the hands of the architects and centralized it at Nightingale. But we’ve also centralized the expertise. So, you know, we’ve got a finance director at Nightingale, we’ve got, you know, delivery team of development managers and project managers and that obviously gives the banks and the superannuation funds lots of confidence that this team has done it before, and they can do it again and all that expertise is in-house.

Eve: [00:20:45] That’s a lot, that’s huge.

Jeremy: [00:20:49] Yeah. But you know, yeah. So, it’s much less grassroots and it’s much more boring. Yeah. Hey, I mean, still doing incredible things, right? It’s still setting the agenda like, you know, we build.

Eve: [00:21:05] You’re a starter. You don’t like the maintenance, the maintenance stages.

Jeremy: [00:21:08] 100%. I’m a starter, not a finisher. There are other people that are better at finishing than me. That’s absolutely right. Well, it’s got an incredible inertia.

Eve: [00:21:20] I think we have that in common. I like things, but maintenance can be really boring.

Jeremy: [00:21:25] Yeah, And look, it’s got its own inertia behind it now, so it doesn’t need me, you know, anymore.

Eve: [00:21:31] Pretty fabulous. So, what else about the model has shifted over time? This just.

Jeremy: [00:21:35] Well, look, under the interesting thing for us was that we were delivering housing that was carbon neutral and that was meant to be affordable. But I was actually frustrated by delivering not for profit housing that, you know, the first project was 19% under market. In one of the projects we balloted last year was only 13% under market and it’s not for profit. Right? And so, I think the challenge for us was that when we pushed the environmental credentials and the build quality and the design quality and all of those things, it still wasn’t as cost effective as what we were hoping. You know, we were hoping to kind of shave 25% out of the price of housing and we thought that we would get better at that over time and that as we built bigger projects, and we had an economy of scale that we could keep on reducing prices. Yeah, I guess for us it just, it didn’t get cheaper. Even with big projects like Nightingale Village where there’s six buildings all together and we’re sharing infrastructure, you know, the project got more complex and they got better, but they didn’t get cheaper.

Jeremy: [00:22:43] And so, for us, we had to kind of start to think about how do we have impact on affordability, which is when we kind of wrote our own affordable housing policy, you know, a little bit like, you know, the UK where we just allocate 20% of housing kind of salt and pepper through each of the developments now and then those 20% are held by the community housing provider and cross subsidized by everything else in the project, which actually makes everything else in the project slightly more expensive, right. So, we’ve actually made the other 80% slightly more expensive, but we now have 20% that is truly affordable, you know. And so, and it’s complex and it shouldn’t be up to a small not for profit to be delivering affordable housing. But in a city where there has been so much underspending on housing, then I think that everyone’s got to take some responsibility to try and solve for that.

Eve: [00:23:39] So, has any of this rubbed off on the Australian Government?

Jeremy: [00:23:43] Yeah, I mean it’s been incredible. The impact that Nightingale has had is unbelievable. So, you know, so Nightingale now has, there are a number of other companies doing things that look and smell like Nightingale, but they kind of got their own, you know, their own approach to it. You know, there’s a company here called Assemble, and if you talk to Assemble, you know, they say that they developed all of their all of their things, all of their ideas, all their policies at the same time as us, which may well be the case. And maybe everyone was kind of we just all arrived here at the same time. They kind of came a couple of years after us. But the great thing about assemble is their scale. So, they are funded, you know, they’re 25% owned by a superannuation company, all of their sustainability credentials, they match all of our sustainability credentials. So, we’ve got seven and a half stars, not five stars.

Jeremy: [00:24:44] That’s one of our, you know, energy rating requirements. They’re also 100% electric. They also buy 100% certified green power, so no black power. They also have a car share system in that they also have an embedded network that shares the benefit for the residents. And they also have a 20% affordable housing criteria. You know, the difference is that while we’ve got 500 apartments under development, they’ve got 3000. So, I mean, and also, yeah, it’s incredible. And also, they’ve got some really smart people working with them around tax structuring and finance. And they’ve been able to work really well with government on getting government backed finance, you know. So, yeah, I think that they’ve approached it in a kind of more intelligent and strategic way. But it’s really great, right? So, it’s not just Nightingale now. It’s also a company that has to generate returns for a pension fund which is doing this and showing that this model can be replicated at scale and profitably and still everyone wins on it and most of their model is build-to-rent, but they’re building buildings that are largely…

Eve: [00:25:55] Which is unusual in Australia.

Jeremy: [00:25:58] Yeah, I mean Australia is weird, right? So, most of the apartments here are kind of built to sell. Most of the rental apartments are owned by mum and dad investors, you know. And so, the build to rent market here, you know, the rental market is only just recently turning to kind of, you know, whole buildings being owned by a property companies. So, we’re seeing like Heinz coming out here, Greystar coming out here, so, internationals coming here to build, you know, buildings that will be rented out. So, it’s good to have Assemble here as an Australian, you know, version of that.

Jeremy: [00:26:35] But we’re also seeing boutique developers, Milieu here, who sell beautifully designed. Their whole schtick is beautifully designed buildings, relatively small buildings. There may be only 50 apartments in each building. But what we’ve seen from them is that they engage Breathe architecture to work on a project with them. And basically, they said we want to build all of the sustainability outcomes of Nightingale. We want to add some optionality. So, if our purchasers want to buy a car park or buy an individual laundry, they can. And so, we’ll just offer those as optional extras and then we’ll sell it at a different price point. And we’ll make sure that it’s designed really well and that it’s, you know, that the specification is slightly better. And so, we’ve seen Milieu now become a B Corp certified company delivering buildings that are carbon neutral in operations, meeting all of the Nightingale kind of design standards and then selling to the kind of the next tier up of second or third home buyers, you know, and it’s been really good to see them delivering great quality with those same sustainability and community outcomes.

Jeremy: [00:27:51] And in fact, around here, Eve, you’ve been to this suburb that we’re in, Brunswick, in the north of Melbourne here, it’s kind of a, you know, I guess, let’s call it a Williamsburg of, you know, of Melbourne, right? It can be gritty, and it can be great. And it’s pretty diverse. But what we’ve seen around here now is that no developer builds here now, who is serious. No one here plumbs gas into their building, no one here builds something that’s kind of under seven stars. You know, everyone who’s building here now knows that the purchasers in and around this area expect that their building is going to be energy efficient and there’s going to be 100% electrified. So, it’s been really interesting to watch the market shift. And I think that, you know, the epicenter is here around where we’ve built 14 nightingale buildings in this suburb. And I think that it’s kind of rippling out through the rest of Melbourne and then it’ll kind of ripple up the East coast here and get to Sydney and Brisbane.

Eve: [00:28:54] What about other countries?

Jeremy: [00:28:58] No, no, no, that’s a really good question. I mean, yeah, it’s interesting that lots of people around the world know about Nightingale, and we’ve spoken to people in London, you know, Sweden, Canada.

Eve: [00:29:12] And plenty of students who know about Nightingale and Breathe.

Jeremy: [00:29:16] Yeah, yeah. It’s really interesting. But New Zealand has paid a lot of attention. So, New Zealand is, you know, Australia only has 25 million people. New Zealand only has 5 million. It is the most beautiful place. It’s incredible.

Eve: [00:29:33] It is gorgeous, yeah.

Jeremy: [00:29:34] The New Zealand central government has a housing crisis on its hand that the cost of housing in New Zealand is like, you know, I think it’s like know third after, you know, Paris and Hong Kong or something like it’s crazy how expensive housing is in Auckland. The central government from New Zealand sent a delegation of about ten senior planners, planners, urban designers out to come through, and economists, to come and walk through the commons and look at Nightingale One. They’ve recently announced a new housing policy under their incredible Prime Minister, Jacinda Ardern.

Eve: [00:30:12] I know. She’s amazing.

Jeremy: [00:30:13] She’s amazing. Yeah, she’s like, Oh, there’s a problem with housing. Let’s write a housing policy and let’s actually change planning policy to solve that. And basically, when that delegation met with me, they said, what is the biggest barrier to building affordable housing? And I said, it is, in Melbourne, it’s actually third-party objection. Right? So, it’s.

Eve: [00:30:36] Yeah, I was going to say the same thing. Zoning. Well, it’s, yeah, objection rights are really strong there, but definitely zoning impacts what you can do.

Jeremy: [00:30:44] Yeah. So, one person living, you know, 500 meters away, you know, or half a mile away can put in an objection and delay the entire project and cost the project hundreds of thousands of dollars. Absolutely, and it’s alive and well here. And the thing that they complain about is lack of car parking, despite the fact that our road network is absolutely at capacity and that the City of Melbourne has 30,000 available car spaces in existing buildings. And all we need is an app called Parkhound or Spacer to link people up to those things. So, we don’t have a car parking problem, we’ve just got a management issue about where those people being able to find those car spaces, so car parking and height and so basically anything over two stories, everyone in Melbourne is up in arms. And so, basically what they did in New Zealand is that they heard that, and they’ve got a new policy which says that anything up to five story, there’s no third-party objection rights, even if it’s got zero car parking. So, they’re happy to waive the car parking to zero because construction of basement is, like labour costs are very high, really high in Australia and New Zealand. We’re literally saving like 15, sometimes 20% of the housing cost out by taking out basement car parking.

Jeremy: [00:32:08] So, so New Zealand has changed their planning rules and Breathe have been working with the with the kind of community-based developer, believe it or not, with an incredible constitution out of Hamilton and New Zealand and a local architect called Edwards White in New Zealand. And we’ve been working with them to build their version of Nightingale. You know, that’s specific to New Zealand. And so, we’re working on a project with them. But the first project isn’t like Nightingale One, like 20 apartments. It’s like Nightingale Village. So, it’s, you know, it’s eight buildings by eight different architects, all carbon neutral in a village. And we’re working really closely to make sure that we knocked that out of the park and we’re building the infrastructure around that. It’s called Project Korimako. Korimako is a New Zealand bird, you know, as opposed to, you know, the Nightingale. Anyway, I’m really looking forward to. So, the Breathe team kind are working with them and we’ve taken all the learnings from our time at Nightingale over there to kind of try and, you know, just leapfrog kind of five years of R&D. So yeah, it’s, it’s definitely it’s definitely spreading.

Eve: [00:33:16] Interesting. So, in the meantime, what’s happening with Breathe? I know a little bit because, full disclosure, Jeremy is my architect on a project in Australia which has suffered through the pandemic and objection rights. Right?

Jeremy: [00:33:33] Well, I mean you saw that there was one objector on your project, which was a really aspirational project, not an overdevelopment. And we had to spend a lot of time with that one objector, you know, to kind of work through that was painful. And now our big challenge is funding, right? Funding and finance.

Eve: [00:33:53] Well, also the contractor, it’s a very, very dense urban site. The contractor is really concerned about how he’s going to build there. And so, you’re not going to like this but he says, you know, they need the whole road. That objector went away because we gave them an accessible parking spot, which the contractor says he now needs. It is really, I mean, I’ve never seen, I mean, I’m in a small town. I know that entitlements and zoning moves very slowly in places like San Francisco, but I’ve really never been through anything quite like it. Especially with the pandemic. And everyone disappeared and there were no phones, and no one responded to email.

Jeremy: [00:34:40] Yeah, it was challenging, wasn’t it? Anyway, we’ll get there, Eve. So, what was the question again?

Eve: [00:34:47] So, like, what’s happening in your architecture studio?

Jeremy: [00:34:53] Yeah, okay. Okay. Right. So, you know, we’ve kind of specialized in sustainability for a long time. And when I say specialized, it’s just been something that we’ve always done. I think the big change for us in the last couple of years is that one of our great architects, Bonnie Herring, was the director of architecture here, we’ve now made her a director of sustainability. We’re now doing lifecycle assessment on all of our buildings. So, we’re one of three firms in the country that are kind of measuring carbon and trying to deal with whole of life carbon or embodied carbon, which has been interesting. And, you know, everyone says to us, you know, it’s funny that you guys tend to focus on narrow your focus down and doesn’t that cost you work? But interestingly, by narrowing our focus, we’ve got clients like ANZ Bank. So, you know, we’re a relatively small practice. You know, I think there’s 27 staff here and ANZ Bank are again one of the big four banks here, and they’ve been working with us in the last couple of years about changing their branch rollouts to being, you know, instead of constructing branches, basically working on a system where we build, you know, a carbon neutral, like kit of parts or furniture installation basically that can be installed and then removed at the end of each lease and taken to other branches and, and all the parts can be used. There’s a barcode on all of the parts so you know.

Eve: [00:36:23] It’s like knock down furniture for ANZ Bank.

Jeremy: [00:36:25] Exactly, exactly. So basically, kind of, and the incredible thing about that is, you know, just in the 21st century, being able to design everything in 3D, you know, prototype everything, build a prototype branch, test everything, and then start to roll out, you know, branches. And so, we basically built this kit of parts, a 3D model, a handbook, basically like an IKEA catalogue showing how it all goes together. A little YouTube tutorial to future architects working on these branches.

Eve: [00:37:02] A phone number.

Jeremy: [00:37:04] No phone number, but, you know, so we designed that. We rolled out the first three branches together with ANZ and then we worked with their three other architects to then take them through it and then we worked with another three. And so, we’ve kind of been spreading how to do that, you know? Yeah, like a tutorial, but you know, they’ve just finished their 60th branch and they’re rolling out across the country, so they’ll roll out hundreds of these things. So, these carbon neutral branches in operation with a massive reduction in embodied carbon, that’ll be totally circular. So, there’s no glue in these things, Everything’s screwed together or bolted together. So, at the end of a component’s life, it can all be, you know, broken down to its kit of parts and reused. I mean, that’s been pretty interesting.

Eve: [00:37:48] For people listening, they’re wondering, is this really what an architect does? So, you know, is this the role of an architect?

Jeremy: [00:37:58] Well, that’s a really good question, right? Because what is an architect in the 21st century? You know, I’m on the National Council of the Institute of Architects in Australia. And, you know, a lot of architects think their job is to draw buildings. You know, and I would say to any architects listening that that is absolutely not our job, that, you know, 39% of all carbon emissions on this planet come from the built environment. And that, you know, we’re in a time of massive climate crisis and that we as a profession need to be asking ourselves big questions like, eh, should we be drawing a building at all? Or should or should we be finding a different solution? So as architects, we’re trained as systems thinkers, you know, Eve, you’re trained as an architect, and you know.

Eve: [00:38:46] It’s a great training, it’s creative, and it’s systematic and it’s, you train to be a problem solver and make something from nothing. Yeah.

Jeremy: [00:38:55] Yeah. Correct. And so what I would say to architects is to use that thinking to say, what is the answer to this solution? Is it building more basement car parks or is it actually just introducing the council to apps that already exist, or is it building an app? You know, like what is the answer to the problem? And it’s not always drawing a building, you know? So, yeah, I think that where, you know, yeah, we probably approach architecture a little bit differently to traditional firms. I’m not a big fan of single, you know, residential family houses, you know, or the inequity in that that so many architects focus on this fetish-ization of you know I want to do this big luxurious house, you know, and I want to get it photographed and put in a magazine.

Jeremy: [00:39:48] But if you think about the impact that you can have, you know, spending all that time with a pedantic, wealthy client to build their one dream house as opposed to you could be working with Aboriginal Housing Victoria, you know, and building housing for First Nations Australians who have been, you know, pushed off their own land in this country, you know, or you could be working with ANZ to say, well you’re about to roll out 400 branches, how do we pull out thousands and thousands of tonnes of carbon out of that and how do you improve the working experience for all of your staff through that, by, you know, introducing Biophilic design and flooding the place with plants and pink UV grow lights so that at night time when the branch closes, it glows pink, you know. So, yeah, I think that we have to ask ourselves. You know, this is post, we are we exist post peak oil. We exist post, you know, the debate on climate change. There is no debate now. And we have to choose who we want to be in the profession and what we want to be doing, but it shouldn’t be adding to that 39% of carbon emissions. It shouldn’t be adding to social injustice. You know, we get to be change makers and we should, you know, focus our time and our energy on that.

Eve: [00:41:14] Yes, I totally agree. For me, it’s also that buildings make better cities for everyone. And I get.

Jeremy: [00:41:25] Absolutely.

Eve: [00:41:26] Really upset when all the focus is on that special Italian marble finish inside, when really, it’s the external walls of the building that are going to make a street or a place or a square, really a wonderful, really place to be, you know.

Jeremy: [00:41:43] I had an architect at Breathe the other day, quote, a famous quote to me, and he said, Jeremy, God is in the detail. And I banged my fist on the table and I said, absolutely not. Not in this place. You know, it’s in the big idea and it’s in the ethic of what you’re doing, you know?

Eve: [00:42:02] But on the other hand, your details are gorgeous. So…

Jeremy: [00:42:05] Yeah, absolutely. I mean, but those two things have to coexist, right? You know, you can’t just obsess about a detail without actually if you think about Bonnie in the way that she worked and designed the commons, you know, every detail is about a reduction. How do I take things out? And so, it’s so reductive that it’s really, really beautiful. But there was a reason for that, right? A sustainability reason, a cost reason. So yeah, but also Eve, interesting that you studied architecture, but you saw that what actually needed to happen in the built environment was funding for the right type of projects. So, Small Change is an example of I teach at Melbourne University, I teach Nightingale night school to thesis students, you know, every second semester at Melbourne University. And I become incredibly proud when I hear about one of my graduates going out and they might work for Lend Lease in and become the head of their sustainability, you know, or they might go and work for a property developer and become a development manager there, or they might go and work for the public housing team in Singapore, you know. But I get really inspired when I hear that architects understand that sometimes the most impact they can have is not drawing buildings but using their systems thinking to actually make massive change. So, I think the key is getting up upstream, right? Architects are always downstream. You’ve got to get up to the source to be able to kind of change be outcomes.

Eve: [00:43:45] I think that’s right. And I don’t know if it’s changing, but I taught in architecture school for a while and I found it incredibly myopic that students were taught to design just buildings and very little time was spent on everything else they could do with their education.

Jeremy: [00:44:05] I think it depends a lot on what university, you know, like I was at the Royal College of the Arts a couple of years ago, you know, with a woman, Tash, there seeing what she was doing. And she was there really trying to get, you know, these architects in London thinking really about systems, big things, you know, how do we, you know, how do we as a profession have, massive impact which leads to massive change.

Eve: [00:44:32] Yes. So, I’m going to ask you one more question. When are we going to build a Nightingale project together in the US? That’s what I really want to do.

Jeremy: [00:44:43] Well I mean, if you think of if you think about what the barriers are. So, can we get a great architect in the US? Absolutely. You know. Can we find a site with lots of opportunity in the US? Like, absolutely. You know, I mean, often, you know, we’ll try and align strategic planning support with community support. You know, and you can imagine that there would be states or cities within the US. I mean, it’s obviously quite divided at the moment, but we but we would need to go to the right place to do it. And then the biggest piece of the puzzle is funding, you know. So, and I think that…

Eve: [00:45:22] It always is. Yeah.

Jeremy: [00:45:23] And I think that, you know, that you could solve that. So, and well, actually the last piece of the puzzle is that the Nightingale Housing Board has said absolutely no to any, the reason that Breathe are working with the New Zealand crew is that the Nightingale Housing Board have said Jeremy No we’re, we’ve got a sole, let’s just solve Melbourne, you know, and I’ve kind of pushed them to, you know, Adelaide to the next state to the west of us and I’ll push them north into, into New South Wales. So, we’re kind of in a few states here. But yeah, I think that, you know, we could call it the Eagle.

Eve: [00:46:07] I love this idea of sustainability through reductionism. Like I worked in this Pittsburgh market, which is a really soft market when I was doing real estate development. And I had to reduce everything down to the bare minimum for different reasons, just because the market couldn’t support anything else. But there are now places here where it can support, it can support more. But I mean, you know, my own apartment has polished concrete floors because we really couldn’t afford to cover it. And I’ve got, you know, concrete, raw concrete block walls because painting it just wasn’t part of the budget. I think that’s beautiful. You know, I think that it’s exposing that, you know.

Jeremy: [00:46:50] But if you detail it well, I mean, the fascinating thing is if you think about the Commons, you know, Bonnie being so reductive that even the surfaces. So, all of the tap ware that we used to specify in Melbourne was cast in brass and it made it made in Melbourne, cast in brass sent off to the chrome platers so to be electro plated with chrome. And then it would come back to the manufacturers that would brush the chrome, that would repackage it, they would send it out. And chrome plating is a very toxic process, anyway. It’s very, very energy intensive and it requires all of this transport between the brass caster and the chrome platter and back again. So, Bonnie pulls all of the chrome plating off, you know, talks to the manufacturer, gets them to agree to give us basically the rough cast brass, you know, just buff off.

Eve: [00:47:40] Which are beautiful, right.

Jeremy: [00:47:42] Absolutely beautiful. And now in Melbourne, you know, find me a building you know, whatever, ten years on that doesn’t have bar store furniture and brass tap you know. So, it’s actually, it’s become an aesthetic and I’m not saying that again, maybe it was just the time, but you know, it’s become an aesthetic in its own right in this city. But it’s really come out of, you know, Bonnie Herring pushing this, just really pushing the reductionist agenda. So, yeah, I mean, it’s interesting. And then if you think that all of the apartments around here, we pull all the ceilings out to give us, you know, taller ceiling heights and to not put all of the, you know, embodied carbon in those ceilings and to expose all the thermal mass to give us really stable temperatures. You know, we’ve been pulling the ceilings out since 2014 and now no apartments around here, you know, like they’ve all got exposed concrete ceilings, you know.

Eve: [00:48:52] So, there was this language in construction and building homes that wasn’t really there for good purpose, right. And you’ve stripped it away and it’s really quite a beautiful aesthetic and people are adopting it, it’s a great thing.

Jeremy: [00:49:07] It’s interesting. Eve, I better run because I’ve got to go and talk to someone. So good to speak with you.

Eve: [00:49:15] And I want to, I’ll want to know in two or three years where you are then, because this was enormous progress, especially given that there was a pandemic during all of this.

Jeremy: [00:49:25] Yeah, but I think that I’m sure it was the same in the States. We were expecting the sky to fall, and everything was upside down. So, you know, housing prices went up, construction prices went up, yet demand went up like nothing made any sense. So, yeah, you know, I am still expecting the sky to fall, Eve.

Eve: [00:49:49] I’m hoping to come to Melbourne sooner and we’re going to catch up again then. Thank you very much.

Jeremy: [00:49:56] Thanks, Eve. Thank you.

Eve: [00:49:58] You too. Bye.

Eve: [00:50:16] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. You can support this podcast by sharing it with others, posting about it on social media or leaving a rating and review. To catch all the latest from me you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing yourself head on over to wefunder.com/smallchange, where you can invest directly in Small Change and our mission to democratize capital formation to create impact in commercial real estate development. A special thanks to David Allardice for his excellent editing of this podcast and original music, and a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Jeremy McLeod

Democratizing green roofs.

Molly Meyer is democratizing the green roof. 

80% of the buildings that will exist in a few decades from now are already built. And since buildings are one of the biggest contributors to climate change, figuring out how to retrofit them economically and easily is a must do. Green roofs are a big part of that. Molly wants to put a green roof within the reach of anyone who owns a building.

She’s tackling this through engineering incredibly lightweight soil and systematically training contractors in how to use it. Her company, Omni Ecosystems, in Chicago, is growing, evidence of the demand.

Molly’s interest in green roofs developed in Germany, where she spent two years working in the green roof industry on a Robert Bosch Fellowship after completing her degree in Earth Systems at Stanford. She founded Omni Ecosystems in 2009 where she works to advance technology associated with working landscapes in order to create rooftop gardens (and other types of working landscapes) that are functional, biodiverse, environmentally friendly, and fiscally beneficial. The company is multidisciplinary and comprised of five branches: OmniInnovation (research and development), OmniProducts (product development), OmniWorkshop (design studio), OmniConstruction (installs living infrastructure systems), and OmniStewardship (provides care for long term landscape management). They don’t just build green roofs – they invent, design, supply, construct, and maintain working landscapes.

In 2019 Omni Ecosystems headquarters relocated to the Bowman Dairy Company’s State Street facility in Chicago, rehabilitating the neglected into a design studio with a 30 ft palm tree, construction yard and manufacturing warehouse, and a rooftop showcase with a 15,000 sq ft green roof including 32 trees. Omni Ecosystems has patented a number of innovative solutions to improve their products including the Omni Tapestry and the Omni Green Roof and have received numerous awards for their visionary products and Molly has received more for her visionary leadership.

Read the podcast transcript here

Eve Picker: [00:00:11] I thought I’d kick off the New Year with an inspirational conversation I had with Molly Meyer last year. Molly is the founder of Omni Systems. She’s developed a brand-new approach to greening roofs.  She’s engineered an incredibly light-weight soil that weighs just 12.5% of your average garden soil, making it possible to easily grow trees on rooftops. Why is this so important? 80% of the buildings that will exist in a few decades from now are already built. And since buildings are one of the biggest contributors to climate change, figuring out how to retrofit them economically and easily is a must do. Green roofs are a big part of that. Molly wants to put a green roof within the reach of anyone who owns a building. I was blown away. 

If you missed this podcast when it was first published, make sure to catch it now.

If you’d like to join me in my quest to rethink real estate, there are two simple things you can do. Share this podcast. And go to rethinkrealestateforgood.co where you can subscribe to be the first to hear about my podcasts, blog posts and other goodies.

Eve: [00:01:38] Molly Meyer is democratizing the green roof. Why, you ask? 80% of the buildings that will exist in a few decades from now are already built. And since buildings are one of the biggest contributors to climate change, figuring out how to retrofit them economically and easily is a must do. Green roofs are a really big part of that. Molly wants to put a green roof within the reach of anyone who owns a building. She’s tackling this through engineering incredibly lightweight soil and systematically training contractors in how to use it. Her company, Omni Systems in Chicago, is growing, evidence of the demand. I was fascinated and hope you will be to listen in. If you’d like to join me in my quest to rethink real estate, please share this podcast. Or go to RethinkRealEstate.Co and describe to be the first to hear what we’re cooking up next. Hi, Molly. It’s really nice to have you on my show today.

Molly Meyer: [00:01:41] It’s so nice to be here. Thank you, Eve.

Eve: [00:01:44] You’ve built an amazing company I heard about called Omni Ecosystems with a vision to democratize the Green Roof. So tell me about that. What’s the problem that you’re trying to solve?

Molly: [00:01:57] Yeah, so, well, green roofs are one aspect of it, but when we’re thinking about putting landscapes on structure, weight is a serious concern. So making sure that green roofs, or that the ecosystems that we put on structure aren’t too heavy. And so we’ve invented a new type of growing media or engineered green media, which colloquially we call soil, but it’s very, very lightweight. And so typical soil, like in someone’s front yard, would weigh under a lawn. To grow that lawn would be about 120 pounds per square foot. And typical green roof systems will grow along in about 80 pounds a square foot. We’ve grown lawns in 15.

Molly: [00:02:48] Oh Wow.

Molly: [00:02:50] Orders of magnitude lighter weight.

Eve: [00:02:52] Wow. Wow, wow.

Molly: [00:02:54] And so why is this important? You know, this is one aspect of what we do, which is broadly, broadly what we do is how do we integrate nature into the built environment. But why is this aspect of it important is because when we look at the building stock that’s going to exist in 2040, I might have this stat wrong, but I believe it’s almost 80% of the building stock is already built. Right. And that’s huge. So, and when we know that the built environment contributes at least 40% to greenhouse gas emissions, then that makes it very clear that there’s a huge imperative to retrofit and to adapt our existing structures to be more, to be able to mitigate and adapt to climate change. So when we think of overhauling the auto industry or transportation, if the administration were to put forth a new sort of emissions standards for auto manufacturers, that would turn over about 10 to 15 years. So, we’d know, okay, in 2037, by 2037, here in 2022, those new standards will be in effect. And we know we’ll see the benefits of these better emission standards. But that’s still only, what, a quarter or a third of emissions. There’s still almost half comes from buildings. So, we really do need to be thinking now about what retrofits look like. And while there’s a lot that contributes towards how a building can be greener, I think one really important part is integrating nature into it. So, creating greenery in, on and around buildings.

Eve: [00:04:49] Interesting. Just as an example, I don’t know, maybe about five years ago, I live in a little downtown building which has a flat roof with a stair to it. And I wanted to put a, I wanted to put a green roof on it. And everyone said, no, no, no, no, you won’t have the structure. You’ll have to get a structural engineer, etc., etc. But, you know, I was thinking some lovely little perennial. It’s a tiny little area. It’s maybe 20 by 20. But I thought, you know, something that would be low maintenance in the sun, up there, would give us a little less cooling needs inside since we’re on the top floor. So, when you go to retrofit a building, did you look at existing structure to understand what sort of weight it could carry? Like if joists carry a roof, what extra can they carry?

Molly: [00:05:37] Sure. Yeah. So, we don’t have structural engineers on staff. We, you know, a developer or a building owner would hire them as another consultant within the team. And it’s really important to have a structural engineer to evaluate the building so that we can ensure that it can hold even a lighter load to put the system on. But when our soil scientist invented this new type of growing media, the very first projects they looked at were incredibly limited loads. There used to be in Chicago, a small grocer called True Nature Foods, and True Nature wanted to grow food on their own rooftop and their joists, the structural engineers said their joist would only support an additional 12 pounds per square foot. So, insanely light, and no one had ever grown food in this capacity. But the soil scientists that that we work with, Michael Rabkin, he invented our soils. This was back in 2004, 2005 time period when he was faced with this question. He said that was the first project that they were trying to tackle, and he really developed a process to do this. And it’s all based on the concepts of terraforming. Terraforming is how do you grow soil? So, soil grows in nature, right? Rocks break down biological materials like microbes and earthworms and whatnot, grow in on and around them and organic matter builds up over time. So, you have a profile of biogeochemical processes happening. It’s where geology and biology meet, is what soils really are. And so, to grow soils is really to ask how do we introduce biological organisms to the geosphere in a way that we can make sure plants can thrive?

Molly: [00:07:44] And so, Michael, his work prior to omni ecosystems was with the U.S. Military asking how would we grow food on Mars? How would we grow food? Yeah, in otherwise unable to be grown upon areas. And so, if you were to watch the movie The Martian with Mike, it’s painful because he just goes, “That’s not how it works. That’s not how it works.” Apologies to Matt Damon, but the genesis of the soils at Omni Ecosystem differ significantly from how other providers within this industry ask: How do you grow on structure? How do you grow in lightweight? Because their approach is very much from an engineering or mechanical mindset. Let’s look at the geology and the chemistry of it. So, making sure that there’s certain rock substrate and then there’s a certain amount of NPK, nitrogen, phosphorus, potassium and other micronutrients. Whereas our approach is we can grow on any geologic substrate because we can add the appropriate biology in order to turn that rock into soil. And so, what we’ve done is we’ve just used a very, very lightweight rock and we grow within it, we turn it into soil on a rooftop. And so, our processes really mimic the ideas of ecological succession. So, when a forest fire goes through an area and decimates a forest, over the course of the next five decades, you will see a forest regrow there. And there’s these ecological steps that occur in growing back a forest. We take those biological processes, and we accelerate them. We put all the ingredients together so that nature can do what happens in after forest fire in five decades. We do it in 12 weeks on a rooftop.

Eve: [00:09:53] Wow. So, it’s actually on the roof. These were not the questions I was going to ask you. I’m fascinated. I know I like it. So, it’s actually a process that you implement on the rooftop.

Molly: [00:10:08] It is, yes. You know, we grow soil from bare rocks. So, on day one, the rooftop looks the worst that it will. And over time, it grows. And so, the most cost effective version of this is actually one of the most cost effective versions of greening rooftops anywhere on a market. It’s less expensive than other sort of monoculture systems. We’ve created a native wildflower meadow that can work anywhere in the Midwest and East up and down the Eastern Seaboard to really mimic nature, to create native habitats.

Eve: [00:10:27] Fascinating, how fascinating, and do different weights of soil give you the ability to grow different things?

Molly: [00:10:51] Weight, not so much depth. Yes. So, the deeper we would go with a soil profile, different plants can survive. So, there are a few misconceptions, however. Many plants don’t actually have tap roots or roots that need to go straight down. Most plants can adapt, and their roots can go sideways. So, lawns, native wildflower meadows, those can all exist in the shallowest three inches. When we try to create forests or tree canopy on roofs, then we do go to a deeper profile because typically our clients want to have mature trees on the roof. And so, we have to cover fully their root balls or their rooting mass with soil. And so, we might have to go up to a two foot depth, but it’s still very lightweight. For example, on our own headquarters, the building where I’m speaking to you today. We created a rooftop with a very structured Bosque, so a series of 15 maple trees in one area. There’s over 30 trees on the roof, but 15 maple trees in one area that, through the use of this lightweight soil, through the use of just optimizing just the right depths that need to be there. And, through the use of air spading, which is a process by which you remove excess soil from the root of a tree. Those things, we’ve allowed us to put this forest on the roof in 60 pounds per square foot. To do this with any other technology, or approach, would weigh 240.

Eve: [00:12:31] Wow.

Molly: [00:12:32] Yeah.

Eve: [00:12:33] When can I come and visit?

Molly: [00:12:34] Any time. Eve, come any time.

Eve: [00:12:36] It sounds really amazing. You’re sort of in the process of making your vision to democratize green roofs into reality. And just tell me a little bit about your company and when it launched and what products and services you offer.

Molly: [00:12:53] Yeah, absolutely. So, we started the company about 13 and a half years ago, in January of 2009. Great time to start a company in the real estate industry. If you remember, I’m being sarcastic. It was.

Eve: [00:13:08] Did she get a loan for a building then?

Molly: [00:13:11] Not so much. But we started the company then here in Chicago because there was quite a robust green roof industry here in Chicago. Thanks to Mayor Daley, his administration put forth a sustainable development policy that was the core of which was around green roofs. So, there was a great market here and we brought our products and services, which at first were really just green roofs. And so, we started with this lightweight soil, bringing it to market. And over time, we found that clients were asking us for more and more services in addition to the products, because it’s a unique approach. It’s not what most landscapers would do and how they would approach creating green space. And so over time, we added a construction arm and a maintenance arm and a design studio. Today, the core of our business is really around supplying our, the soils that we’ve invented and designing landscapes that do more than just look pretty but actively work to adapt and mitigate the climate change. We do still offer some of those construction maintenance services, but it’s less of the focus of the firm. And really what we’re trying to do is get these soils out to other contractors so that they can implement them because we realize there’s too much work to be done for us to try to become a big behemoth contractor. We really want to educate other contractors because our skill set is in inventing and understanding soils. And then our other core is designing with this advanced technology in mind.

Molly: [00:14:59] So through our design studio, we’ve really been able to push the industry forward in thinking about what can be done on structure and within landscape. So the rooftop that I mentioned before in the building I’m in where we have a quarter of the weight of a typical approach, that’s the first time that’s ever been done, and it’s in the staid and risk averse real estate architecture and construction industries. It’s unique to push forward that much through a client. So, our own design practice can push those boundaries and then lead the way for other designers to implement or to apply those to other projects. But another example of sort of work that we do now is not just on structure but on grade. So, one of the soils that we’ve created actually has an enormous amount of pore space. So typical soils have about 25% pore space, which means like air space or where air or water could be held within the geologic substrate. And our stormwater soil has 78 to 91% pore space.

Eve: [00:16:09] Interesting.

Molly: [00:16:10] Over three times the amount of space for water to be held. And this is really important because this becomes then a stormwater management tool using innovative soils. Projects where we are applying this are particularly in urban infill sites where there’s environmental contamination. So, when you have environmental contamination and you’re doing new construction, you often need to dig out that contaminated soil, haul it off somewhere, make it somebody else’s problem to dispose of. But hauling that off in order to create space for cisterns or underground vaults to manage your stormwater.

Molly: [00:16:49] So what we’ve been able to do is say we can cap the existing site, which is a typical approach to environmental remediation, to put a engineered barrier on a site and leave the contamination in situ. And then on top of that, we’re able to put this super spongy soil and it basically behaves like a green roof on ground. But in doing this, the soil, the contamination remains in place to minimize the amount of negative impact that might occur due to that contamination moving. We’re able to bring in this clean soil that manages the stormwater without digging down, and we’re able to often exceed the stormwater requirements of a site. So doing all of this in a couple of sites that we’ve studied and are implementing this on, we have found up to a 35% cost savings when you compare the grey infrastructure approach to the green infrastructure, meaning if you were to look at the environmental, civil and the landscape budgets together of the typical grey infrastructure solution, meaning with cisterns and hauling off contaminated soil, it would be 35% more expensive than just capping the site and putting a super spongy soil on. And the other benefit is that for that less money, we’re getting a more robust landscape.

Eve: [00:18:20] Yeah, and that sounds amazing.

Molly: [00:18:22] So bigger trees. Yeah. Yeah.

Eve: [00:18:25] So do you find that it’s useful where you have really poor soil, like solid clay or it’s really. I suppose you could treat that as contamination too, right?

Molly: [00:18:34] Yes, you could. Absolutely.

Eve: [00:19:37] Because there’s no water runoff. It’s just like a brick wall.

Molly: [00:18:40] Right.

Speaker1: [00:18:41] Just thinking here.

Molly: [00:18:43] Yeah.

Eve: [00:18:44] We’ve lost a lot of retail and there’s lots of strip malls with tons of parking that are standing empty. And I wonder all the time what they’re going to become. Can you just cover over asphalt or concrete?

Molly: [00:19:57] We can, yeah.

Eve: [00:19:59] Have you done that yet?

Molly: [00:19:00] We have actually, a version of that.

Eve: [00:19:04] Turn the mall, the local mall into a park with tiny little retail outlets around the hitch. I think I might go buy one.

Molly: [00:19:13] We absolutely can.

Eve: [00:19:14] That’s really interesting.

Molly: [00:19:19] Yeah. And we have yeah, we’ve put the soil on just straight on asphalt and concrete caps and very shallow, and we can grow plants out of it.

Eve: [00:19:26] Because, you know, that does a couple of things that first of all, it changes the nature of the space. And secondly, the demolition costs and hauling that material and putting it in landfill is just an awful thing to do, you know? So really, really interesting.

Molly: [00:19:42] Yeah. The carbon footprint, I think can particularly as developers start to consider and quantify better the carbon expenditure that they have with each of the decisions they make, it may become very cost effective because of the ability to offset all those hauling the carbon of all that hauling. Yeah.

Eve: [00:20:05] So where are you offering your products and services now? Just Chicago or have you gone national.

Molly: [00:20:11] We’re national. We do this work coast to coast. We have projects now in Phoenix and California, Minneapolis, Atlanta, DC, New York, Connecticut.

Eve: [00:20:26] Not outside the country?

Molly: [00:20:27] Well, we do have a very first couple of projects in the Grand Cayman this year. Everyone on our team is saying, I have to go to that project for site visit. And so, it’s very competitive to us and staff members there for a site visit. But right now, really solidly work within the continental United States. And we’re excited that we have a couple of opportunities to expand beyond that right now.

Eve: [00:20:51] Well, I have a project I’m working on and trying to get built in Australia and we could use that technology there. And the architect I’m working with would be fascinated by this. I mean, they have lighter soils there, but really nothing, nothing like this.

Molly: [00:21:06] Yeah.

Eve: [00:21:07] Are you getting towards your vision to democratize the green roof? How far do you have to go?

Molly: [00:21:12] Oh, we have a long way to go. Well, I think we are making headway, but this is a big endeavor. And it’s not just about us. It’s about everybody contributing to it. We definitely have a couple of decades more of work to do.

Eve: [00:21:26] Who are your customers?

Molly: [00:21:27] Yeah, good question. So, our customers are, for our landscape architecture studio, we are often either directly contracted by architects or ownership, depending on how a certain contract might be structured. For our products, we sell those to other contractors. So, roofers, landscapers and periodically general contractors who do work.

Eve: [00:21:55] So if I wanted to find someone in southwestern Pennsylvania, could I go to your site and see who you sold to?

Molly: [00:22:02] Oh, yeah. You know what? I don’t know if we have a list on the site for Southwest Pennsylvania, but, yeah, we have folks I can connect you with.

Eve: [00:22:11] Okay. Do you touch on who’s on your team? You’ve got a research division. Like what does your team look like to start a company and grow a company like this?

Molly: [00:22:21] Yeah, we have a very diverse team with quite a broad set of skill sets. So, we do have a soil scientist and, as well as a team of, I think about ten landscape architects and a couple of architects. We also have construction project managers. Obviously, HR and accounting and then we have horticulturalists.

Eve: [00:22:50] So your typical stuff.

Molly: [00:22:51] I started the company where I was wearing all the hats, you know somebody had to drive a forklift. It was me, right? If somebody had to pull weeds, it was me. Over time, we’ve grown, and we’ve really gone from a group of generalists who are willing to do anything to now, over the last few years, really having a group of specialists who bring expertise from their prior work. So, we have a director of operations now who comes to us after a career as an owner’s rep. So, she really understands the breadth of the industry and how to interact with our typical clients and how our team should be operating. Yeah, so a really, quite a diverse group of people. But what’s peculiar about our group and what we do is that we need this breadth, to enable to go deep in what we do, right? Because what we do is so unique, but it has to slot in across the industry from design and construction, also through stewardship, through the whole timeline, and be able to speak to each of the stakeholders which are obviously very diverse within the AC industry.

Eve: [00:24:04] And what’s the range and scale of projects?

Molly: [00:24:07] Oh yeah, we have very large projects which can be acres in size, like the Morton Salt Project where we’re applying our soils on grade to manage contamination and stormwater on that site. It’s a four-acre site and other projects are even larger. And then we have a contest among our sales team for the smallest project. And I think right now it’s about 26 square feet. But if you have anything smaller than that, they will be fighting tooth and nail to sell it to you.

Eve: [00:24:43] 26 square feet, that’s a little room.

Molly: [00:24:44] Yeah, exactly.

Eve: [00:24:25] No. So a little tiny little courtyard. Like a little urban courtyard somewhere. Tiny, weenie, little one.

Molly: [00:24:49] Yeah. That might have even been a set of planters, but yeah. But, more or less, our average project tends to be, I don’t know, between a half-acre and an acre of size.

Eve: [00:25:02] Residential, residential, commercial. Do you have residential customers who come to you?

Molly: [00:25:12] We do have residential customers that come to us. Our typical clients, however, are commercial and institutional. So, over the past ten years, much of our work has been commercial developers who are looking to green amenity deck space for their tenants. And we’re finding quite an increase in that after the pandemic, as people are thinking about how do we lure our folks back to the office? And green space is really critical, and adapting existing structures is very critical. And that’s obviously a sweet spot for us. Through the pandemic, many of our projects continued that were commercial, but we have seen quite an uptick in institutional work, health care and higher ed. Those portfolios for us are really increasing significantly. And then we do residential. Yeah, we do it and we enjoy it. But really, I think we’re a commercial outfit, so we kind of work with commercial clients.

Eve: [00:26:06] Interesting. Just to wrap this part of the conversation up, just tell me about one of your favorite projects that you worked on that was really very impactful.

Molly: [00:26:14] Sure. Well, we were lucky to build and supply and continue to maintain the green roof on Studio Gang Architects headquarters here in Chicago. And that was a really fun project for many reasons. Obviously, to get to work with Studio Gang is an honor, but also because of what we actually did on that project. So, they were looking at an existing building. I’m not remembering the vintage, but that was probably before the 1930s. And so, there was a limitation on the structural load. I want to say it was around 22 pounds a square foot that we were limited to. You know, Studio Gang wanted to put a wildflower meadow on the roof, a native meadow, as well as some trees. So, we worked with the structural engineer to identify the columns over which we could place trees, and then the remaining area, we sort of sloped the topography of the soil to manage the weight, keep it low, and then seeded the roof with a native wildflower meadow. And this was really, really fun to do and to think about the species that were up there. But one of the challenges that came up was that the project was delayed and what should have been seeded in the spring was seeded in the fall and late enough in the year that we weren’t sure if the plants could establish and protect the soil from wind scour through the winter. So, we spoke with the Studio Gang and said, hey, look, we can seed with the meadow, with the native species, and they can cold stratify help establish in the spring. But through the winter we’re not entirely sure. So, what we’d like to suggest is seeding the roof with a cold hardy annual so it could establish in the fall, cover the roof through the winter, and then we can mow it back in the spring. Or it could die back because it’s an annual and then the perennial plants could establish.

Eve: [00:28:20] Yeah, yeah, that makes sense. Yeah. It’s like a blanket.

Molly: [00:28:23] Right. A cozy blanket. So, we ended up seeding with winter wheat. And winter wheat, we thought, I think at the time this was the first time we did this. We were like, let’s just throw a lot of wheat on this roof because we’ve got to make sure it stays in place. So, when we came back in the spring, it was a wheat field across this rooftop. It was so dense. And so, we asked, can we leave it up here rather than mow it? What do you think about just seeing what happens? And they were game. And so, we let it mature and in July we took some samples, sent them to a lab, and they were cleared for, basically there are certain type of fungus that can attack wheat and then it can be dangerous to humans if you were to consume it, but it came back clear on all this. So, we got a group of students together from a non-profit called After School Matters here in Chicago and One Summer Chicago, two different groups. But we worked with them to train them up. The students came to the rooftop with us. We harvested all the wheat. Well, actually, we harvested about 3000 square feet because it was a lot of work. So, we just did about 3000 square feet of this roof because Studio Gang wanted us to harvest with scissors so that we wouldn’t damage the underlying perennials that were coming up.

Eve: [00:29:51] That’s a lot of work.

Molly: [00:29:51] It was so much work. So, the students and we, like everybody, like our staff was out there or the students and we all were out there with a pair of scissors doing this. We brought the harvest back to our headquarters at the time. Another group of students helped us winnow, separating the chaff from the grain, and they came up with all different ways to do this. They took boards and beat the boards together to break up the seed heads. They took a bucket and filled it up and put a chain in there on a drill and beat apart the wheat. And then they took fans and blew the chaff away from the grain. So, like all this stuff, and over the course of three weeks they processed all of this wheat and we had 66 pounds of grain and a local artisanal miller milled it into a high grade pastry flour. And we had over 60 pounds of flour, which then a local baker worked with the students to bake it into cookies that they sold to raise money for After School Matters and One Summer Chicago.

Eve: [00:30:59] That’s really a lovely story. That’s a lot work.

Molly: [00:31:02] It was so much work, so much work. But it did really pay off because a few things came of that. One is the students were hilarious and incredible and so much fun to work with. And one of the students was like an aspiring stand-up comedian, and he put a whole bit together about like how insane it is where cookies and bread come from, which was awesome. And then at the time, the mayor of Chicago was Rahm Emanuel, and he came to our headquarters to celebrate their graduation from this non-profit, this student summer program that they were in. And there were 30,000 kids across Chicago that were in this program, and about 30 of them were here, were with us. And he came to their graduation, and he was supposed to be at our office for like 30 minutes. He spent almost 2 hours just hanging out with the kids. It was so cool. They gave him a pound of flour. And then, you know, Studio Gang’s rooftop ended up winning an award for this project. And today it’s a native wildflower meadow. So, after that first season, the story.

Eve: [00:32:18] They didn’t keep the wheat? Because wheat is beautiful.

Molly: [00:32:20] It is. It really is. But they wanted the native wildflower meadow and so they let it go back to that. And every year now they do a BioBlitz where they bring out a group of biologists and study like what are the species they’re seeing and what’s happening on the roof. So, it’s interesting to see that this is a space, a very urban space. It’s right at the intersections of Ashland in Milwaukee, in Chicago. It’s a very dense intersection, but three floors up, all this ecology has happened in the past five or six years. You know, it’s pretty impactful.

Eve: [00:32:57] It’s pretty fabulous.

Molly: [00:33:18] And then we also learned something very cool, which I love the data behind what we find out on each project. So, here’s a project where it’s about 5000 square feet. We harvested 3000 square feet of wheat and we got 66 pounds of flour. So, what we know now is that for every 50 square feet of a green roof, you could have 1 pound of flour grown. And this is important when we think about how do we scale this up, right? So across the city of Chicago, we worked with Perkins and Will to actually study how many square feet of green roof could ever be built and learned that from each of these data points of all of our projects, that little bits like how much, how much stormwater on this project, how much we do on this project and whatnot. We learned that, you know, if every year you harvested wheat on all the, all the eligible rooftops in Chicago for green roofs you could get, what’s the number of pounds? It’s almost 10 million pounds of flour and that of grain. And that grain could turn into nearly 50 million bottles of beer a year. That is pretty dang cool.

Eve: [00:35:38] Well, so I have two more questions for you. Clearly, you’re really passionate about this. How did you come to it? What’s your background?

Molly: [00:35:09] Oh, yeah, I know enough to get myself really in trouble. So, I studied Earth Systems for my undergraduate degree and my graduate degree. So, I got an undergrad and a master’s from Stanford in Earth Systems. And my focus there was within geology and narrowly within geology, I took a lot of soils and biogeochemistry classes, but I really just knew enough to get myself in trouble. I didn’t. I’m not a soil scientist. After my master’s degree, I ended up going to work for a general contractor as a carpenter for a couple of years just to do something different and be, I wanted to be up in Seattle where I could ski and climb every weekend, and after a few years of that, kind of wanted to go back into working in the environment but thought about, I was so interested in construction and how the built environment was, operates, but I really love soils and a couple of conversations some friends said, what about green roofs? So, I got a fellowship to work in Germany and learned how they build green roofs over there.

Eve: [00:36:23] It’s the country of green,

Molly: [00:36:25] Right, yeah.

Eve: [00:36:26] I mean, they separate out all their recycling. You can’t put glass bottles in except for certain hours because it might disturb the neighbors. I mean, they are so organized.

Molly: [00:36:37] Yeah, yeah, they are.

Eve: [00:36:40] Very precise. Yeah.

Molly: [00:36:41] Yeah. And so, I went over there, and I was there for about a year and a half learning, learning about the German green roof industry, which at the time really was far ahead of the United States. And so, I learned a lot there about green roofs, best practices, came back to the United States and just very fortuitously met Michael Repkin within that first few months of coming back, or being in Chicago. And it’s, his soil science background and me to know enough that he was speaking the truth, but not enough to be able to do it myself. We teamed up and really created Omni Ecosystems from that.

Eve: [00:37:20] How fabulous.

Molly: [00:37:21] Yeah. And over the past 13 years, in some ways we’ve leapfrogged what Germany did. You know, German green roofs remain very much about seeding, which is a monoculture and non-native to most of Europe and North America. In our work is, how can we go lightweight, how can we manage more stormwater, how can we become more biodiverse? But none of that would be possible without understanding what they developed in Germany and building upon it.

Eve: [00:37:48] Absolutely fascinating. So, what’s next for you? What’s next? There’s got to be something next brewing.

Molly: [00:37:55] Oh, boy. We always have little things brewing, but, you know, what we’re really excited about right now is scaling up the solutions we’ve created so that others can implement this. We recognize that we are on a very short timeline to mitigate and adapt to climate change. And the soils that we’ve invented and the design approach that we have has really kind of shown people, hey, there’s a path, it’s proven, this isn’t a pilot study anymore. We have this done and figured out. And so, what we’re working actively on right now is scaling and empowering others to use this technology. And that’s why I said earlier, our construction and maintenance teams are small and mighty, but really what they’re about is learning how these, our systems are best implemented and managed so that we can train others to do it. So, we’ve now built training programs. We have more than 50 contractors around the United States, either fully trained and implementing our systems or in the process of getting trained up. And that to us is really exciting because our hands can only do so much. But getting this technology to others.

Eve: [00:39:16] Now is exciting because I would want to know who they are. I mean, I hope you have a database.

Molly: [00:39:21] We do. And to your point earlier, it’s not on our website yet. But that’s part of the, part of our plan over the course of the next year is to build that up. And we want to make sure it’s just easy, easy for people to deploy this technology and use it.

Eve: [00:39:39] Well, this has been absolutely delightful. I’m in awe. How interesting.

Molly: [00:39:43] Thank you, Eve. It’s a treat to speak with you. And I do hope you’ll come visit sometime.

Eve: [00:39:47] I’m definitely going to. When this latest COVID wave settles down again, I’ll try and come to Chicago. I’d really love to see what you’re doing. Thank you so much.

Molly: [00:39:17] Thank you, Eve.

Eve: [00:39:24] That was Molly Meyer, founder of Omni Systems. She’s developed a brand new approach to greening roofs, an engineered soil that weighs just 15 pounds per square foot. That’s just 12.5% of your garden soil, which averages 120 pounds per square foot. And it’s not only meadows that she’s growing, but trees in her lightweight soil. I’m blown away.

Eve: [00:40:40] I hope you enjoyed today’s guest and our deep dive. You can find out more about this episode or others you might have missed on the show notes page at RethinkRealEstateforGood.co. There’s lots to listen to there. You can support this podcast by sharing it with others, posting about it on social media or leaving a rating and review. To catch all the latest from me you can follow me on LinkedIn. Even better, if you’re ready to dabble in some impact investing yourself head on over to wefunder.com/smallchange, where you can invest directly in Small Change and our mission to democratize capital formation to create impact in commercial real estate development. A special thanks to David Allardice for his excellent editing of this podcast and original music, and a big thanks to you for spending your time with me today. We’ll talk again soon. But for now, this is Eve Picker signing off to go make some change.

Image courtesy of Molly Meyer