Not long ago, businesses would reframe from commenting on important social issues. If they wanted to make a difference, they usually did so through separate philanthropic organizations. The idea was to remain as neutral as possible to avoid alienating potential customers.
Today, that does not work.
In a world where social media connects brands and consumers, staying silent in the face of issues such as climate change, racial injustice, or gender equality is untenable. Consumers now want to know that the brands they’re loyal to share their values. According to a recent survey, 75% of people would start shopping with a company that positions itself on the same side of an issue that they care about.
Employees are similar. Repeated research shows that they want to work for companies that have a social conscience. When they’re in alignment with their employers, today’s employees work harder, remain more engaged, and turnover less. Businesses, therefore, have a vested interest in getting on the right side of major issues and working with their communities to make a difference.
For startups, there are no shortage of issues that could make a solid foundation for a new business. Alex Hagan, the CEO of The Property Block, a socially conscious startup that’s turning the affordable housing market in the UK on its head, serves as an example of how you can make a difference while turning a profit at the same time.
A problem that defied solutions
As the second-largest economy in Europe, the United Kingdom is a desirable place to live. However, it’s not easy to find an affordable place throughout much of the country. Experts trace the history of the U.K.’s affordable housing crisis back through a century of chronic underinvestment.
The private sector hasn’t been able to solve this issue. Development companies prefer to develop untouched land, but there are restrictions on new development, typically in areas surrounding major towns and cities to prevent urban sprawl. This limits development opportunities and drives prices of already-developed land to abnormally high levels due to land scarcity.
The government’s response so far has been to allow developers more access to those protected lands, but these efforts haven’t worked very well with some developments containing just 10% new affordable housing units. It’s an intractable problem that’s begging for a new approach and an innovative solution.
A startup with a purpose
The Property Block is a real estate technology firm launched with the goal of solving the U.K.’s affordable housing crisis. Under Alex’s direction, they realized that most real estate developers found it easier to build a new development and attract people to it rather than to create affordable homes where there was existing demand. They found the simplest solution to the affordable housing crisis is to find underutilized existing properties and redevelop them into higher-density affordable housing.
To do that, The Property Block developed a proprietary data-driven algorithm that identifies areas with high affordable housing demand, and finds properties within the location that are well suited to be redeveloped. They then contact the property owners to see if they’re willing to sell for above market value. In fact, The Property Block can often entice owners with buyout offers as high as 35% above market rates, and because they know that each redevelopment will yield a profit, there’s little risk.
Redeveloping communities, not just buildings
The Property Block also has structured their business to address additional inequities in the U.K. The centerpiece of that effort is an anti-discrimination stance in all of their hiring.
According to Alex though, that alone wasn’t enough. He’s also working to partner with NGOs to make The Property Block a premier employer for former armed forces members and people re-entering society after incarceration.
Both are issues close to Alex. On the topic, he says that “I come from an impoverished area in the northeast of England with a family of ex-servicemen, some of whom suffered from mental health issues and struggled with integration back into the community, and they found themselves back in prison time and time again.”
By making his startup a place where disadvantaged people can work to reintegrate into society, Alex is further helping the very people who most require the affordable housing he is helping to build.
A startup worth emulating
The Property Block is a great example of a startup living its values, solving a societal problem, and turning a profit. Moreover, they demonstrate that many systemic issues that were thought unsolvable can in fact be addressed through innovation.