Property
Are smart cities that appealing?
Ang Hui Hsien 
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THE Asia-Pacific will see 10 smart cities by 2025, of which more than half will be in China. Among the nations on the bandwagon is Malaysia.

And while Prime Minister Datuk Seri Najib Razak announced in May, 11 major initiatives and projects aimed at propelling Cyberjaya further as the country’s smart city, the question is whether they will draw property investors and buyers.

There are no real data to draw on, due to two main factors – one, there is no consensus as to what defines a smart city and secondly, the factors attracting property investors and buyers go beyond whether a city is smart or not.

In a recent article, Frost and Sullivan Malaysia managing director Hazmi Yusof defined smart cities as a “convergence between technology, infrastructure, and services to manage sustainable and inclusive growth.”

Such a broad definition and scope, he reasons, has resulted in different quarters having different opinions as to what is a smart city.

However, it is generally agreed that data and the Internet of Things (IoT) play a significant role in optimising a city’s management and resources.

Smart cities would have better data and communication methods to ensure resources are better used, says Koh

Property PriceTag CEO Cha-ly Koh says: “Maintaining and supporting a city is becoming more expensive. We may no longer afford bureaucratic methods of governance.

“Smart cities would have state-of-the-art data and communication methods to ensure resources are better used for us to be competitive in the region,” she says

Transitioning to a new model requires municipalities to train their manpower and review each new policy to identify its efficacy.

Some argue that this is difficult to achieve as they are frequently overwhelmed and understaffed

San Diego city, US, has been actively implementing the model in an initiative spearheaded by its city hall.

Its street lights are installed with 3,400 sensor nodes to monitor audio, video and temperature conditions on its roads in real time, as well as adaptive traffic lights.

 

Keeping track

San Diego chief data officer Maksim Percherskiy says the data collected from these technologies allow the municipality to keep track of whom and how its policies are affecting the city.

“When you try to achieve various sustainable goals, a lot of policy-making ends up being a guess.

“Smart cities are a way to help us get information for planning purposes. They provide us with the tools and data to be proactive and reactive,” he says.

Percherskiy, who was speaking at the 3rd Smart Cities Asia 2017 Conference and Exhibition recently, says monitoring technology like this are examples of base-level usage of IoT. It is safer than advanced usage where decision-making and implementation rests solely on machines.

“We need to be clear of our goals when investing in technologies like this.

“In San Diego, it is not about making decisions but about ensuring policies work and offer better situational awareness,” he says.

On the property front, the implementation of the smart city model has breathed new life into the industry.

In India, a smart city project in Kochi, Kerala resulted in its borough Kakkanad experiencing big land deals and significant price appreciation.

Many experts foresee potential price appreciation for smart cities, making them ideal as investment destinations, although they caution that investors must have a long-term vision as many of these initiatives are still in the implementation stage’

 

The flipside

Improved infrastructure and enhanced connectivity also benefit the office space segment and attract interest from other markets such as hospitality, serviced apartments and retail.

Of course, as with all things, smart cities also come with their downsides, although they are often overshadowed by the benefits.

Chief among them are security and privacy issues. A city that relies heavily on technology becomes vulnerable to hacking and data theft.

ZAZ Ventures smart cities and innovation funding expert Vladimir Bataev says with IoT’s arrival, what used to be a completely digital technology has crept into society’s daily lives.

There is little evidence to show that newer devices are more secure than their predecessors, says Bataev

“We see sensors, computers and software entering any object and device – from those at roadsides to eye scanners and all kinds of wearable equipment.

“If we look at the history and common trends in information technology, there is very little evidence that the new devices are more secure than those we’ve seen before on desktops and the Internet,” he says.

 

Vulnerability

Koh says the more connected a city is, it becomes more vulnerable to cyber attacks.

Hence, there is a need for sophisticated measures to secure key utilities that keep a city running, such as its power grid and transportation network.

“Once a city is connected, the data would be available for us to optimise usage and resources. But this will also be open to cross-border hacking and control.

“The other issue rests on privacy where most democratic populations might feel uneasy with the endless documentation of data surrounding their daily lives,” she says.

With Malaysians quickly adopting new technology, as proven by many urbanites’ use of mobile apps such as Waze, Koh says the real barrier to smart city implementation in the country is the lack of data transparency versus a tech-savvy population.

“Nonetheless, education on responsible and optimal uses of information is important to prevent abuse and protect privacy,” she says.

In spite of the global push for smart cities, their implementation is bogged down by energy and financial costs.

 

Energy costs

Bataev says that the use of technology comes with significant energy costs which must be considered when deciding whether an IoT solution should be rolled out in a city.

“Arguably, many of these use some form of an energy-harvesting method, and the technology consists of small devices that use little energy, but the cost can come up to a lot when multiplied and extrapolated.

“Additionally, the data collected would have to be stored in a facility which, in turn, needs to be built and powered. Hence, it requires its own set of energy costs,” he says.

Percherskiy, however, believes the construction of such facilities should be seen as an opportunity.

“Somebody has to manufacture and deploy those chips and build the technology to transmit and analyse data.

“If governments are investing in these, then it will create jobs,” he points out.

Although it is still too early to tell, some parties have raised concerns that the appeal of smart cities would draw in more people and result in increased demand for housing, which would raise their prices.

However, Koh says price appreciation depends very much on how collected data are used, outlining the difference between smart cities and open data.

“You can have a smart city that is still centrally controlled without open data. Here, the influence in price would be limited to policymakers.

In my opinion, those impact would be limited,” she states.

Dangers of IoT

THE threats faced by smart cities due to cybercriminals remain real, despite the many precautionary measures taken by the private and public sectors.

What is particularly unsettling is the fact that such attacks can be orchestrated by anyone from anywhere, while the scale of the impact can be devastating.

Last June, several Ukrainian ministries, banks, metro stations and state-owned enterprises were affected by a malware which overwrote important computer files.

The following month, a casino in the US was hacked via an Internet-connected acquarium, where 10GB of data was stolen and sent to a device in Finland.

During a cyber-security conference in the Netherlands, an 11-year-old boy demonstrated how even toys can be weaponised when he hacked into Bluetooth devices and assumed control of a robotic teddy bear.

Findings from international digital security company Gemalto revealed 918 data breaches in H1, involving 1.9 billion data records – a 164% increase compared to the same period last year.

Not surprisingly, people like ZAZ Ventures smart cities and innovation funding expert Vladimir Bataev believes more regulations should be in place.

“I think meaningful and sensible limitations and technological constraints by municipals and governments are the right way to go. It is time for all this technology to slow down,” he says.



This article first appeared in Focus Malaysia Issue 256.