Why are we demolishing homes during a housing crisis? | Olaf Grawert

0:00Olaf Grawert: This episode is supported by Harvard Business School Executive Education. Their programs create powerful connections for leaders around the world, strengthening both organizations and individuals by deepening existing relationships and fostering new ones. Participants leave with lifelong friends, new potential business partners, and a powerful globe-spanning network of fellow changemakers. Learn more at hbs.me slash learn. That's hbs.me slash learn.

0:33Olaf Grawert: This episode is brought to you by Ground News. In a world where the same story gets spun a hundred different ways, how do you know what's actually happening? That's the challenge Ground News solves. Ground News isn't a news publisher. It's an app and website that shows you how every story is being covered across the political spectrum and around the world. Take the recent Supreme Court hearing on social media age verification. Many sources covered it, but the headlines tell vastly different stories. On Ground News, you can swipe through each headline and see content about the source, such as its political bias, how reliable the reporting is, and who owns them.

1:17Olaf Grawert: Ground News empowers you to figure out what's really going on. That's the kind of critical thinking TED champions, exploring multiple perspectives before drawing your own conclusions. Right now, TED listeners get 40 % off the Vantage subscription for unlimited access. Just go to groundnews.com slash TED. That's groundnews.com slash TED, code TED, for 40 % off. You can only get this limited time offer by using our link. See the full picture. Visit groundnews.com slash TED. today. This message is brought to you by Apple Card. It's a great time to apply for an Apple Card. You'll love earning unlimited daily cash on every purchase.

2:04Olaf Grawert: That includes 3 % daily cash when you buy the latest iPhone, AirPods, and Apple Watch at Apple. Through this special referral offer, when you get a new Apple Card, you can earn bonus daily cash. To qualify, you must apply at apple.co slash getdailycash. Apple Card issued by Goldman Sachs Bank USA, Salt Lake City Branch. Offer may not be available elsewhere. Terms and limitations apply. As many of you know, I grew up in Spanish Harlem. My parents still live there, and it's not far from where I live now. And it's crazy to see just how much the visual landscape of that neighborhood has changed over the years.

2:40Olaf Grawert: Old buildings have been knocked down in favor of shiny contemporary low and high rises. Some local spots have been replaced with new chain restaurants and trendy small businesses. So walking to my parents' apartment is a trip down memory lane. I remember the place where you'd get your shoes repaired, the spot where you'd replace the battery in your watch. And I forget what happened, but they've been gone for years. And the buildings they were in, gone too. We knock down buildings and construct new ones, assuming that's the only way to make a buck and move our communities into the future. But what if that's not true?

3:17Olaf Grawert: And what if preserving homes is actually a way to fight the housing crisis and the climate crisis too?

3:27Olaf Grawert: I'm Madhupa Akinola. This is TED Business, a podcast from TED. Our speaker today, architect Olaf Gravert, is asking a basic question. Why are we demolishing homes, especially during a global housing crisis. He's asking us to look more closely at how real estate speculation functions in our economy and to think of our homes as something more than a commodity. And after the talk, I'll ask you to think more broadly about the practices of preservation and renovation. But first, a quick break. This episode is brought to you by LinkedIn. For small businesses, every hire matters. But here's the challenge.

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5:51Olaf Grawert: And now, Olaf Graver takes the TED stage.

5:57Modupe Akinola: So on January 10, Paris Hilton shared a video of her house destroyed in the LA fire. Walking through the ruins, heartbroken, she said, what breaks her heart even more is knowing that this isn't just her story. Because so many people have lost everything. And it's not just walls and roofs that the fire demolished. It's the memories and the stories that made those houses homes. Over one million people liked her post, showing sympathy and support not only for her loss, but for the very idea behind it. Yet, there's something that most of us don't realize, which is that every minute somewhere in Europe, a house is demolished.

6:41Modupe Akinola: Every minute. And it's not by wind, floods or fire, but by human hands. And honestly, this is something I don't get, because it's not only the walls and the roofs that we demolish, it's the memories, the communities and the sense of belonging that we demolish too. and all of it at the cost of the people and the planet. So the question is, why do we even demolish buildings? As an architect who works on renovation, I can tell you it's not because these buildings are broken and it's not because they cannot be renovated or fixed. It's also not because we want to save energy or build better buildings for those who currently live there.

7:23Modupe Akinola: In one word, profit. Today, real estate is the most valuable asset in the world. So a majority of the global money flows into the buying and selling of property. And I ask you what promises most profit? New buildings, central apartments and trophy offices. In the logic of money, the old can never beat the new. And this fuels a constant cycle of demolition for new construction. because in the logic of real estate speculators, every building is up for demolition. And this is something you have to understand. No, really. Every house in which you live that promises more profit is up for demolition.

8:07Modupe Akinola: Why? Because to speculators, your house is a commodity. It's a good. And just like an old toaster, you don't fix it, you replace it. So why is demolition so profitable? Well, essentially, it's a question of values. So in our current system, the value of a building is measured only by its price. So in our real estate system, value and price are the same. So if I ask you, what is the value of a house? What is the value of this building? What would be the answer? Well, in a world in which value and price are the same, the answer shrinks to a few economic factors. It's very simple. it's square meters and land, location and market potential.

8:52Modupe Akinola: So this is the base how real estate speculators calculate. It's the base for their strategy. So they would buy a land, they pay the price for the building, they clear the land, which means they demolish the building, they build a new so they add the construction costs and they divide it by the square meters. Essentially this is what real estate speculation is about, how much profit you can extract from an existing building and how much money you can make once the old building is gone and the new one is built. It's a shockingly cold calculation that turns the profit of tomorrow into a wrecking ball today.

9:31Modupe Akinola: And it's based on a spreadsheet that only counts money and it never asks what a building holds and who lives there. but value and price are actually not the same no there is a difference so the question shouldn't only be what is the value of a house but the question should also be what is the price to your home no what is the price of the memories and the stories so which price do we give to family bonds to birthday celebrations to also the fights with our partners and these moments of forgiveness? And what price tag do we also put on community, on the neighborhoods that raise us, on the familiar faces in the hallway, on friendship, or on the larger scale, on the freedom of the next generation to live?

10:20Modupe Akinola: And these are the hidden costs of demolition that no one speaks about, the hidden costs that you will never find in a budget or in a spreadsheet. All of it happening in an era of severe housing crisis, where we all agree, no? Where millions are struggling to find an affordable home, where young people cannot move out of their parents' apartments, where working people are struggling to keep a roof over their head, and where even the middle class cannot afford property any longer. And beyond these struggles, homelessness is rising in almost every country. But it's not only the people who suffer.

10:58Modupe Akinola: The planet suffers too. because the building sector is the biggest CO2 emitter on earth, yet no one speaks about it. 38 % come from the building industry compared to roughly 3 % for flying, a number that we discuss a lot, for instance. But it's not only the biggest CO2 emitter, it's also Europe's biggest waste producer. 36 % of all the waste comes from the construction industry. And again, to put it in context, compared to only 8 % from private households. So all the energy it takes to demolish a building and all the energy it takes to rebuild a building is only unleashed because the real values, the social and the ecological values, are not accounted in our system.

11:45Modupe Akinola: So we are tearing down buildings and ironically heating up both the planet and the housing market. So architects are part of this value chain. You know, architects are part of it, of real estate speculation, of demolition for new construction. But as a citizen, I'm suffering its consequences of rising temperatures and rising rents. So the question is, how can the whole value chain evolve? How can we evolve the value chain by looking differently at what we already have? And that's getting really interesting because what do we have around us? actually, Europe is already built. And that's really the good news.

12:25Modupe Akinola: Europe is built. Why? Because after the Second World War, we introduced policies that made rebuilding fast, cheap, and easy. And this system was basically based on three key pillars. Emergency policies, industrial methods, and public money. And all of it aimed at new construction. And even if we don't notice it day to day, this system still writes the rule books, no? It trains us today to still see the risk instead of seeing the potential. It still trains us to assume that the new is always better than the old. And it's at the core of our legal system, which makes it not only less profitable for the market, but also much, much harder to renovate and transform.

13:13Modupe Akinola: because all of it, tax incentives to subsidies, building codes to regulation, and risk insurances to credits, favor starting anew. The question is, what happens if we look at things differently? So now that we know it's rooted in this legal system, the market builds its strategy on, and we know about the consequences, it's the moment where we can say, how do we shift it? And I think there it's important to understand that we humans invented that system So we have to make it work for us instead of us working for the system. And this is what French architects Lacatheur and Vassal do. And I want to present you one of their works today.

13:55Modupe Akinola: They look differently at what is already there. To them, every building is heritage. Not because of its architectural style and not because once a famous person lived in there, but because they recognize the social and ecological value in the building. Lakaton Vassal, they never demolish. They never demolish a building. They add, they build on, they renovate, they transform. And by doing so, they acknowledge all the energy stored in the walls and the roofs from the thoughts to the labor, to the legacy and even the CO2. And I want to show you one of their projects, which proves that it's a real alternative so that renovation and transformation are a real alternative.

14:41Modupe Akinola: And we are back at the house, which is a social housing in France, the Grand Parc in Bordeaux, 530 apartments that La Coton Vassale together with Dureau and Hutin architects transformed. How? All the residents stayed in the house while the building was renovated. They worked with prefabricated elements that were craned in. These elements arrived and were stacked in front of the existing building like a shelf, almost like a bookshelf that stands in front of the old. What they did in a second step is they opened up the old facade. They replaced the tiny old windows with big sliding doors, opening the interior to this new winter gardens, flooding the space with light and air, but also creating a generosity.

15:28Modupe Akinola: It's a social gesture also. You create generosity for those who didn't have it before and amazing views. And the numbers behind it are really stunning. Half a day to place the prefabricated element, two days to cut open the old facade, two days to plug in the new facade and one week to renovate the interior. So it takes two weeks to improve everybody's life. to cut down the heating bills and to boost local businesses working on renovation. And all of it at a third of the costs of a standard new apartment. So 55 ,000 euros for the renovation of one apartment compared to 165 for new construction.

16:15Modupe Akinola: And the new apartment, a standard new apartment would never have the winter gardens and it would never have the generosity that they can provide in their work, which is a proof that the most sustainable house is the one already built. And that's also the moment where I invite everybody to imagine that this could happen all over Europe. This could happen all around the world because it is a real systemic alternative that actually could function anywhere. So now some of you might think, well, that's a nice story, but it won't work for my house because I live in a single family home, because I own an old apartment in a block, in a city block.

16:52Modupe Akinola: And this might be true, no? This might not be your way. But I can guarantee you as an architect that there's almost for every building a way to be renovated and transformed. So this can be your story. But, and here is a but, only if we manage to change the legal system that keeps the old value system in place. we have to understand that the real innovation and real evolution is finding and recognizing the value in the existing. Because the demolition of buildings is just as outdated as food waste, animal testing or single-use plastics. All things that we as a society already agree on and have an understanding for.

17:38Modupe Akinola: And this is why we say we have to create a new system. We have to create a common path and focus on one collective goal, which is to house Europe in the existing. This is why we started an initiative, a European Citizens Initiative, which is a pan-European project, which has a clear mission. Renovate, don't speculate. Our movement aims to become the largest architectural initiative, advocating for new laws to make renovation and transformation the new norm. a social, ecological, but also economic alternative to demolition and new construction, and all with the support of one million citizens across the EU.

18:20Modupe Akinola: And one million is not only the number of supporters we need, it's also the number of likes Paris Hilton got for her post. So I ask everyone, if that many people can show support for one home lost in fire, imagine the impact that we can make together for the millions of homes that are up for demolition right now. Thank you.

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20:31Olaf Grawert: did before them. I think what's important about Olaf's point is that it's not an either-or situation. The choice isn't just demolish the buildings around us or leave them unchanged. He's asking us to think more broadly about what shape reservation can take. He's asking us to consider the power of transformation in the spaces closest to us, our own homes and communities. If we can reimagine the architecture of our existing homes into something new and beautiful, we can also reimagine a world where speculative real estate does not dictate how communities function, where housing doesn't come at the expense of our environment.

21:11Olaf Grawert: Housing is a salient, urgent example, but I think this idea applies to so many things big and small. So I'll ask you to consider this. Is there something in your life that you need to renovate now? What could be changed from the inside out? What could be given a new life? That's it for today. TED Business is part of the TED Audio Collective. This episode was produced by Hannah Kingsley Ma, edited by Alejandra Salazar, and fact-checked by Julia Dickerson. Special thanks to Maria Ladeus, Farrah DeGrange, Daniela Ballarezo, Tansika Sangmanivang, and Roxanne Heilash. I'm Madhupa Akinola. Thanks for listening.

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