Building the future of affordable housing with ShelterTech’s Southeast Asia cohort
Katherine Khoo, Program Manager — Villgro Philippines, examines the urgent need for affordable housing in Southeast Asia and how ShelterTech is supporting innovative entrepreneurs address it.
When world leaders cautioned citizens to stay at home in mid-March of 2020, what ensued was a total shift in how we lived our lives. Across the globe, people began the transition to working from home, students everywhere adapted to distance learning, and our health systems bore the brunt of caring for millions affected by the coronavirus. For many of us, staying home meant being safe, putting in place precautions to protect ourselves and reduce the likelihood of catching COVID-19. But for the 1.6 billion people who live in inadequate shelter, staying safe first meant finding a livable home.
A little over a year later, most of the world continues to be shuttered in, as it waits for vaccines and the latest scientific advancements to combat the pandemic which has sadly taken the lives of millions. Having a safe and livable home is still the first line of defense against COVID-19. However, housing challenges have long preceded the pandemic. The global economic crisis of 2008, for example, found housing at the heart of the conversation, as we witnessed the explosion of the housing bubble that created irreversible and damaging effects for the world’s economy. More than a decade has passed since, and the gap in decent affordable housing continues to be prevalent across the globe.
In Southeast Asia, an estimated 36 million people still live below the international poverty line. With the rapid growth and urbanization in the region, there is also high instances of migration among people from rural areas to cities and urban centers, many of whom are seeking for more lucrative livelihood opportunities and a chance at a better life. As people move towards cities, many are unable to afford the continuously increasing rent prices and cost of living, ending up in substandard, unsafe, and unhygienic shelter in cities’ slums, or spending more than 30% of their income on housing.
The scale of this problem demands solutions that are urgent, multidisciplinary, and have the needs of low and middle-income communities at the center of design and implementation.
With the disastrous effects of COVID-19, the housing gap has widened further. Housing’s underlying systemic issues have been exacerbated by the pandemic, underscoring the inextricable link between housing and our overall health and wellbeing, now more than ever.
The need for innovation in affordable housing
Innovation is critical to solve these existing housing and sustainable development challenges globally, particularly in fast-growing regions like Southeast Asia. The need of the hour is to unleash the potential of innovation through market-based models and entrepreneurial solutions, hand in hand with policy and investments, to address the intractable challenges in affordable housing.
While there are plenty of exciting innovations and entrepreneurial solutions in housing and construction, the majority of these have largely been centered around high-income segments, leaving those in the low to middle-income segments most vulnerable to systemic gaps. Creating solutions that are accessible, affordable, and prioritizes the livability of homes is crucial. Furthermore, a re-examination of current housing practices and its connection to other global challenges is needed. As it stands, almost 40% of greenhouse gas emissions come from buildings, prompting a well overdue conversation around the need for the sector to pivot to more sustainable materials and systems. Innovations in materials, markets, energy, and financing are pushing the envelope to create a future where housing is not only accessible and affordable, but sustainable and green, too.
Enabling a supportive ecosystem for investible shelter entrepreneurs
To address all of the above and bring affordable housing innovations to the impact investment universe, Villgro Philippines partnered with Habitat for Humanity’s Terwilliger Center for Innovation in Shelter for the ShelterTech accelerator Southeast Asia about a year ago. We were excited to launch the program for the first time in the region.
Despite a previous ecosystem study of shelter entrepreneurs and investors present across eight countries in the region, we were skeptical about the number of innovators who would heed our call for applications. After a whirlwind two months of working with ecosystem and community partners, we were ecstatic to receive 100 applications from entrepreneurs and innovators from all over Southeast Asia. We then began our selection process, looking through each application and inviting promising ones for a quick call to better understand the problem they were trying to solve and where their businesses were currently at. Subsequently, we further shortlisted applicants for a final presentation in front of a selection committee composed of housing experts and impact investors. Deliberation in selecting who would make up ShelterTech’s first Southeast Asia cohort was a long and difficult process, but ten promising and remarkable startups were identified to join the program.
Over the last six months, our team has worked closely with this incredible cohort of 10 startups that are changing the future of affordable housing in Southeast Asia. (Read more about them here) Through hands-on mentorship support, we have been able to diagnose key risks and challenges, identify opportunities, and unlock partnerships with like-minded organizations. While the COVID-19 pandemic has forced us to conduct the program virtually, we were able to leverage technology to bring together entrepreneurs from Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, and Singapore, with mentors and partners from all over Southeast Asia, as well as places as far as the United States, India, the United Kingdom, Japan, Switzerland, and the Netherlands.
Recognizing the needs of entrepreneurs to better navigate the market and establish productive connections to investors and partners to create impact at scale, Habitat’s ShelterTech is the ideal platform to plug into an ecosystem of shelter entrepreneurs, investors, housing experts, corporations, and foundations who are all interested in pushing for more innovative shelter solutions. Leading by example is Habitat’s very own Shelter Venture Fund, which has put in investment in several companies that have been part of previous ShelterTech cohorts in India, and Mexico. We are also extremely grateful and proud to have our Steering Committee providing strategic direction, insights, and connections to the local ecosystem for our cohort entrepreneurs.
As the world’s leading platform for affordable housing innovation, ShelterTech’s ambitious goal is to make affordable housing a top impact investment category by 2025. While that seems like a tall order, the companies that we work with prove to us that there are investable companies out there with business models that are not only market-viable but are also creating meaningful impact to low- and middle-income communities across the region. I am excited to see what they do and how they grow in the coming years, and how they will make ShelterTech’s goal a reality.
To find out how to engage with ShelterTech accelerator Southeast Asia, please reach out to kath@villgrophilippines.org
Kath is a Program Manager at Villgro Philippines. She leads program management the Impact Pioneers Network, ShelterTech accelerator Southeast Asia, and ReachHealth Innovation Challenge.
