Featuring commentary by Molly Turner
By Wendy W. Fok, D.Des Harvard GSD and Law School
The voice of “the crowd” holds meaning like never before. The advent of network technologies and digital platforms invite the public to participate in the process of collective creation. “Crowdsourcing” is more than an abstract idea. Already it has informed the creation of two signature public projects in New York, and it promises to change the way the public can interact with the design of the built environment. What effect will this new media have on the way cities evolve?
In 2006, Time Magazine named “You” (the crowd) the “Person of the Year.” The title acknowledged the infinite potential of the thousands and millions of “you” who now direct media and financing within the new digital democracy. These citizens of the digital innovation age have created new platforms, such as those seen in the early beta developments of Kickstarter, Twitter, Wikipedia, and Facebook. This form of open innovation and new media has proven valuable within the fields of consumer goods. Accepted by most industries, such “crowdsourcing” can also be used to innovate within the built environment, and the real estate industry is primed to benefit from its emergence.
A glimpse into three innovative projects and case studies that explore the avenue of crowdsourcing demonstrates the impact of new media in the production of real estate. A first example is the LowLine, “a plan to use innovative solar technology to illuminate an historic trolley terminal on the Lower East Side of New York City. Our vision is a stunning underground park, providing a beautiful respite and a cultural attraction in one of the world’s most dense, exciting urban environments.” A second project is the +Pool, an initiative to bring a floating swimming pool to the East River, on the Manhattan and/or Brooklyn banks of New York City. A third and final example is the Atlantic Yards Project, a public and private mixed-use development. These three case studies break with the traditional model of public participation within the development process through the engagement of new media.
As a whole, this article reveals how new technologies and business strategies are transforming not only business processes, but also the way products and services are created and marketed. For real estate development in particular, this innovation is altering organizational strategies for gathering private and public support and shifting the dynamics of competition for traditional design practices and real estate developments alike. In this context, crowdsourcing can provide awareness and support to a development, shorten the project timeline, and reduce project costs through raising capital.
The Participatory Process
Many observers and authors have noted the role of online platforms in aggregating resources across geographies. Villarroel (2013) notes that online platforms have provoked rapid congregation of distributed resources held by individuals who are geographically dispersed throughout the world. Benkler (2009) emphasizes that peer production is the most significant organizational innovation that has emerged from Internet-mediated social practice. The phenomenon most often associated with peer production, however, is crowdsourcing or crowdfunding (Howe, 2006).
Wired writer Jeff Howe coined the term “crowdsourcing” in 2006. Organizationally, the basis of crowdsourcing combines three core characteristics: decentralization of problem conception and execution of solutions, harnessing of diverse motivations, and separation of governance and management from property and contract (Benkler, 2009). Open innovation, on the other hand, is derived from two forms: a self-organized and self-motivated collaborative activity to achieve a common goal, or an organizational strategy to broaden innovation boundaries while retaining to internal research and development (R&D) agendas (Huff, Möslein, Reichwald, 2013). The word “crowd” is misleading within the term “crowdsourcing,” as the success of these projects rarely relies on a general crowd but instead on invited participation from engaged members of the public (Owens, 2013) and at many times, through mediated and precise “communication costs.” (Villarroel, 2013).
Crowdfunding is a very broad term that ranges in basis from donation to debt or equity positions in a project. This article considers crowdfunding in relation to platforms such as Kickstarter and Indigogo in the boundary of donation-based endeavors, which remains apart from the realm of real estate investment. The LowLine and +Pool used Kickstarter as a donation-based fund-raising platform to raise awareness of their design projects, exhibiting the crux of peer innovation. These projects embody an entrepreneurial spirit and belief breathing life to unbuilt and unforeseeable design projects for the built environment. They imply that direct input from the public network can inform the built environment. Beyond the smoke and mirrors, the larger question still lingers — what are the implications of this new form of public participation for urban development?
In an interview with Dan Barasch, co-founder and Executive Director of the LowLine, Barasch sees crowd participation within a design project as a form of both monetary and ideation support for a project, as it substantiates the design concept by further establishing a public stake and recognition for a project. His view is that “in essence, crowd funding (and sourcing) does two things for an early stage start up: it financially supports an effort, and it signals support for the idea itself.”
The LowLine project highlights several competitive advantages of the peer innovation model. Peer innovation has resulted from the public’s natural inclination to open social media distribution about the project, including fan-fare and blog-o-sphere writing about the project digitally. For the LowLine, this is exemplified by the success of the project’s Kickstarter campaign and support from established institutions and foundations, such as at the Friends of the Highline:
“The LowLine has been crowd-funded from the very start of the project. Initially we received our first round of seed funding via over 3,000 individual backers on Kickstarter, leading to a record-setting $150,000. Since that time, we have diversified our funding streams with significant contributions from corporate, foundation, and public sources. But that initial Kickstarter success proved to be an important signal to larger and more institutional funders that our project was gaining in momentum and support.”
Dan Barasch, Executive Co-Director of the LowLine
Public interest in the project gained significant momentum by engaging the crowd in the public relations of the underused and abandoned city-owned trolley terminal, set to become the LowLine. Additionally, the process increased funding streams through unconventional methods and direct partnerships with internationally renowned engineering and construction teams. Without peer and open innovation backing, a typical non-profit project such as the LowLine would traditionally confront numerous institutional challenges to access public funding, compromising the speed and time of development. Instead, during the launch of the project in 2008, the LowLine team was able to work on the design, research and development, and funding streams in order to launch their first prototype and install it on-site by 2011–2012.
The +Pool was motivated and ideated around the same time as the Lowline. Located in New York, the +Pool claims to become the “world’s first water-filtering, floating pool.” Regardless of whether this claim will become a reality or not, peer contribution opportunities have been successful, made possible through the team’s creative efforts towards fostering community and online social media awareness of the project. The “tile by tile” option for reserving a name, or “spot” mounted on the “+” feature of pool served as public motivation of over 4,700 backers for the project. The contribution by these backers was threefold, serving to fund the project research and development, provide awareness and support of the project, and most importantly, contribute to a project that has low design cost for the individual contributors. The +Pool provides an excellent example of speed and cost advantage, in which online platforms provided an innovative medium through which to garner the recognition and support of crowdsourced peer production.
“The +Pool was ideated in 2010, with a Kickstarter campaign in 2011. It’s still relatively nascent to see what kind of impact crowdsourcing and crowdfunding has on larger projects on actually building a project, such as ours; however, our team feels that by crowdsourcing the project, it has expedited the process of “client education”, which usually takes a lot of time, in the traditional project scheme. This project was enabled through the public announcement through new media that allowed a faster inclination of awareness and has the potential of creating value for the public quicker, to shape the life of the project. On a support level, and funding level, it makes sense.”
Archie Coates, Co-Founder of +Pool and Family
In the case of the +Pool, the public image of the design project gained a sizeable foundation of public interest. This served to engage companies like Google, who have privately partnered with the +Pool team to partially fund private initiatives such as their online water monitoring system currently active through the +Pool website, powered by open sourced resources. These types of privately funded endeavors are seeds of larger return on investments as open innovation begins to engage the larger and broader public and create further opportunities for private investment.
Crowdsourcing has significant competitive advantage overall, including market advantage, quality advantage, speed advantage, and cost advantage. An additional organizational advantage in the first two case studies is content advantage, described by Villarroel:
“Crowdsourcing is a new way of thinking about work that requires new rules of engagement. This open approach requires that work be accessible to occasional contributors, offering a win-win exchange, therefore, fostering an informal yet durable relationship.”
Conventionally, larger urban developments often lack the organizational motivation provided by the private sector, as many larger projects are impacted by bureaucratic ties that tend to limit the success of a collaborative process by the public, unlike the case of crowdfunding. As Arana Hankin, the former director of the Atlantic Yards Project at New York State’s economic development agency, Empire State Development, pointedly states, “…unless the public sector attempts to deliver innovative projects or they have the ability to guarantee a high return on investment, which they do not at this point, I do not see government using crowdsourcing to fund public real estate projects.” Her viewpoint underscores the challenging nature of public projects within real estate and many public sector urban developments.
Under construction since 2011, the Atlantic Yards Project has progressed slowly and fitfully. Atlantic Yards, rebranded as Pacific Park in Brooklyn, is a project that covers the Atlantic terminal urban renewal area. The project is a mixed-use commercial and residential development project, consisting of seventeen high-rise buildings that are under construction. The most recently completed parcel of the development includes the Barclays Center sports arena, which opened in September 2012. Original talk of the public redevelopment began in the late 1950s and continued into the 1960s, and was published in the June 24, 1968 New York Times’ article, “Renewal Raises Brooklyn Hopes.”
According to Arana Hankin, “public private real estate projects are necessarily developed at a large scale, and typically are not driven by community interest, or innovation, but by business interest.” The agency of crowdsourcing is limited, therefore, in mediating the relationship between public authorities and citizen participation. However, if financial and business gains could be justified through community contribution and support, crowdsourcing for community interest and input on a project could be an option for expediting the speed of isolated real estate opportunities and further the marketing value.
“There are a number of new online platforms that have given a broader segment of the population the ability to impact the built environment, either through small scale investment opportunities, capitalizing on their current assets, or by supporting community planning projects. IOBY (In Our Backyard), was created in Brooklyn in response to residents’ frustration with large-scale planning projects. The organization has celebrated success primarily because they are tackling projects that are too small for government to initiate, and the overwhelming feeling shared by many residents is that innovative projects are not being delivered by government.
“Public private real estate projects are necessarily developed at a large scale, and typically are not driven by community interest, or innovation, but by business interest. These projects are immensely complex and multilayered, and not easy to execute. Nonetheless, there could be opportunities for government to solicit financial support from residents through crowdsourcing on isolated components of these projects such as public space, public art, or public programming.”
Arana Hankin, Former Director of The Atlantic Yards Project
Crowdsourcing the built environment has the potential to create an online platform for collaboration and exchange of knowledge that can help improve organizational performance and advantage, grow a project’s bottom line, and open up new opportunities for community participation in public and private development. However, crowdsourcing as a mainstay of civic engagement for public agencies will have its setbacks:
“As someone who worked in politics and government for over 10 years, I would find this an extremely hard sell. Government continues to be criticized for too heavily subsidizing public private real estate deals, not to mention the developers who are awarded these projects consistently are the largest grossing real estate firms in the city. Many segments of the population believe that public amenities should be funded by either government and/or the private sector.” (Arana Hankin)
Case Study Conclusion
Innovation and its technologies within our ever-changing means of producing real estate and architectural design have enabled the exploration of crowdsourcing as a form of organizational strategy. Crowdsourcing is quickly outperforming traditional organizations and emerging into the mainstream of the built environment. It is therefore critical for real estate developers to understand how to manage strategies for crowdsourcing.
Projects like the Lowline and the +Pool are just a few examples of localized projects that are diffused and popularized through the support of international communities. This is facilitated through crowdsourcing and enabled by limited communication costs and low design costs. These collaborations reach a global scale to cultivate international recognition of peer-produced resolutions for regional or local challenges and as a result, can create unprecedented value. By employing new media, developers can expedite project delivery by addressing stakeholder concerns earlier in the process and thereby reduce development costs. With increased attention to conflict mitigation, crowdsourcing could facilitate the creation of a better built environment imagined by developers, designers, and the community.
As indicated by Dong-Ping Wong and Archie Coats of +Pool, and Barasch of the LowLine, peer production through social media and online contributions has gained traction in the urban development field. The increased transparency between the public and governmental agencies may sometimes hinder the process of potential project realizations, due to the lack of guidance and quality control of social media distribution. For some projects, the prosperity of new media distribution networks comes with a cost.
Crowdsourcing as a strategic organizational tactic for the use within architecture and real estate is most functionally advantageous through applied instances where cost reduction, rather than distributed exploration of a resource and opportunity space, is the core function of a system (Benkler, 2009). This type of organizational strategy optimizes and gathers independent contractors and the public into a singular forum, within a controlled vacuum and task-based scenario, but does not affect governance or ownership, as their participation is usually in a fixed method, beyond “hedonic gains.” These examples include: payments (i.e. Kickstarter for LowLine), novelty (i.e. +Pool tiles), or as public forum (i.e. community public hearings for The Atlantic Yards).
A repeated debate since the early recognition of open innovation is fundamental concern over the relationship between the creator, the contributor, and the creation. The question remains as to how the intellectual property of crowdsourced projects can retain its authority and ownership within the value-generating potential. As much as the crowd participates in supporting a project in digital format, it is valuable to understand that the crowd does not take ownership or authorship in the determined physical property of the designed good — whether it be an underground park, a water- filtration pool in the middle of the Hudson, or potentially a future crowd-voted design of stadium such as the Barclay Center. These variables lie in a spectrum from trading “strong” intellectual property goods (e.g. patented products), to “weak” intellectual property goods (e.g. open source), (Chesbrough, 2003). The public lays no claim to the monetary gains of what the designer generates, even in spite of public contribution in thought and process.
An additional concern for most public relations and marketing teams is to manage the public’s role in the phrasing or framing of the project. It can be argued that the “public knows best,” and that public community hearings for public or private developments should allow community members to speak their views and be heard by city officials. Many argue that this model developed when the digital age was less technologically networked and connected, functioning out of necessity, lack of alternative media, as well as the desire to engage on a personal level.
New Age Implications of the Networked Society
Crowdsourced projects are created through cultural motivation, where their basis in “design costs” is balanced by the benefit of “communication costs” given the crowdsourcing medium. These details are reflected in the image above, which diagrams the “producer squeeze problem,” meaning that the higher the communication costs, the lower the design costs, based on Moore’s Law. For there to be a business opportunity, the product complexity must exceed what the individuals and groups alone must achieve (Villarroel, 2013). There is an interesting phenomenon on the balance of a “design cost” based on a “design product” vs. “communication cost” discussion that emerges out of a crowdsourced project. While the way online self-organization works is fascinating, the various issues of closed firms versus open practices and how it operates are still of high concern to traditional operators.
Open innovation projects allow individual users and the public to become the primary source of value contributors within projects, through monetary or creative support. These types of modular collective problem solving projects, such as the Lowline and the +Pool, demonstrate a new paradigm of large projects, in which new communication methods engage the public in design and development more tangibly and powerfully. Crowdsourcing also opens up opportunities for project funding and enables organizations to take on the problem-solving role themselves (Lakhani, 2013).
Crowdsourcing is an approach that calls for strategic and organizational excellence to embrace new methods and capitalize on new opportunities (Villarroel, Gorbatai, 2011a, b). Traditional firms and real estate developers that work in strong cultures of internalized research and development structures could feel threatened by the high threshold of open innovation disclosure, limited privacy, and the appropriability of intellectual property. However, these same firms have the ability to benefit from various digital media companies that have adapted successfully to crowdsourced, peer production, and open innovation models that reach out to the public domain for information commons licensing. Ultimately, as in all innovation cycles, crowdsourcing is dependent on sharing, openness, and public participation. In the coming years, this sharing has great potential to contribute to a more transparent, effective, and lucrative urban development process overall.
Commentary by Molly Turner
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Molly Turner is the Global Head of Civic Partnerships at Airbnb. Molly manages public-private partnerships with a variety of government agencies, non-profits- and tourism organizations for the 34,000 cities in which Airbnb is active. Prior to working at Airbnb, Molly conducted research with the UNESCO World Heritage Center to develop strategies for sustainable tourism. She currently serves on the boards of Tumml, a civic startup incubator and SPUR, a non profit organization dedicated to urban policy in the San Francisco Bay Area. Molly a holds a BA from Dartmouth College and a Master in Urban Planning from Harvard University.
Who is the Crowd? New collaborative technologies are disrupting industries around the globe, and urban life may be the final frontier. The author argues that two new models of collaboration — crowdsourcing and crowdfunding — have the possibility to disrupt real estate development. I ask how these models might impact the residents that live in the very cities that are being disrupted.
I have argued in the past that when new technologies are applied to urban development, it can lead to genius strokes of ingenuity or unknowingly repeating the mistakes of our urbanist past. Indeed, crowdsourced urbanism presents both opportunities and challenges.
Cities are complex organisms to build and manage, which is why several professions specialize in building and managing them. Urban planners, for example, are tasked with weighing the opportunities and challenges of development. Their responsibilities to the public are outline in The American Institute of Certified Planners Code of Ethics, which includes provisions such as:
“We shall have special concern for the long-range consequences of present actions.
“We shall give people the opportunity to have a meaningful impact on the development of plans and programs that may affect them. Participation should be broad enough to include those who lack formal organization or influence.
“We shall seek social justice by working to expand choice and opportunity for all persons, recognizing a special responsibility to plan for the needs of the disadvantaged and to promote racial and economic integration. We shall urge the alteration of policies, institutions, and decisions that oppose such needs.”
When total or partial control of urban development is devolved to the public, the professionals are no longer responsible for the process or outcome. Therefore, I ask: Does the crowd represent the public? Can it create inclusive processes and outcomes? Can crowdsourcing entirely or even partially supplant traditional planning processes? I will outline the potential opportunities and challenges of such devolution of control and examine what role the crowd might best play as we build cities together.
Crowdsourced urbanism brings a whole new meaning to the concept of public participation. Almost every urban development process in the United States has a required public participation component, though they notoriously lack meaningful and sustained engagement. Using new technologies to source ideas and funding from the public can completely transform that public’s engagement with the project. This could result in a much more personal connection to the urban environment and possibly lead to better stewardship of it. New technologies have made collaboration online significantly easier. We can co-create documents, share images, and communicate across time zones. We can create online communities around particular locations, interests or experiences. Crowdsourcing leverages these technologies to increase collaboration and community building in the real world by bringing residents together offline to gather in, or even to create, public spaces.
As the world rapidly urbanizes, cities need to adapt to new residents and new demands. Traditional urban development processes simply cannot keep up with the pace of change. Furthermore, as new technologies make life and work more efficient, residents have begun to expect immediate gratification. They can become frustrated with their lack of control over the extremely slow-moving and bureaucratic development process, which may lead residents to turn to the incremental and responsive projects that crowdsourcing enables.
Finally, crowdsourcing can provide the kinds of public amenities that the public sector cannot, whether because of budgetary limitations, lack of will or simply lack of creativity. It can allow the public to literally create a city of its own design. Residents can create public art, bike lanes, underground parks or water-filtering floating pools — all amenities the public sector might view as non-necessary, but that can make a city a truly wonderful place to live.
Building cities takes a long time, longer than most residents’ attention spans last. It also takes a lot of money, more than most city governments themselves can afford. Crowdsourcing can certainly play a small role in the funding and processes of urban development, but it could never take the place of federal subsidies or long-term plans. It might be best suited to idea generation at the beginning of the process, community participation in the middle, or beautification and stewardship at the end.
Crowdsourcing’s biggest strength and weakness is its ability to respond to consumer demands. There is a great risk that trendy projects could be supported at the expense of necessary ones. The author’s first two case studies exemplify this: residents are much more likely to support an underground park that reminds them of Batman or a pool with nifty new technology than to support the necessary upgrading of hidden infrastructure. The crowd does not have a broad knowledge of what the city needs and therefore cannot make decisions about where its energy and resources would best be spent.
Similarly, crowdsourcing is likely to work in populous and popular cities like New York City, but not in low-density and little known cities like Peoria. The author mentioned that some of the supporters for the Lowline and +Pool lived abroad. It’s unlikely that a public pool in Peoria would inspire someone from Paris to contribute to a Kickstarter campaign. Crowdsourcing risks exacerbating existing inequalities, funneling even more attention and resources to already privileged areas. Let us acknowledge that crowdsourcing relies on an engaged populace that is Internet literate and has money and time to spare. Clearly the crowd is not going to be representative of an entire city’s population; therefore its preferences are not going to reflect significant social or cultural differences throughout the city. The crowd will likely support projects its members can interact with on a regular basis in the neighborhoods where they live, further neglecting already marginalized neighborhoods.
For this reason, the makeup of the crowd is perhaps the most important criterion for whether relying on it will be successful. Urban planners have learned, through various iterations of public participation, that overly relying on the wisdom of the crowd is risky. Even if the crowd was representative of the city’s diverse population, its best intentions may not lead to the most just outcome. Again, ordinary residents likely do not have comprehensive knowledge of the city’s greatest needs and therefore may not allocate their time and resources effectively or fairly.
My final point may seem obvious, but as the United States adapts increasingly to neoliberalism, it is a necessary one to make: the private sector and the crowd cannot and should not replace the government. Public parks, transportation, schools, and sewers require extraordinary resources and oversight that the public sector is best positioned to manage. The public sector has the responsibility to look out for “the interests of the disadvantaged” and “those who lack formal organization or influence.” The crowd, by definition, does not include those residents and very likely cannot look out for their best interests. Additionally, the public sector, if funded properly, can build infrastructure that the crowd can only dream of. Crowdfunding will never be able to replace tax funding.
We live together in cities because it’s more efficient and productive to co-locate and collaborate. Today, enthusiastic urban dwellers have begun to harness new technologies to collaborate and make their cities better together. While these new tools may save costs for developers and local government, beautify neighborhoods and enliven public spaces, the question remains: can they sufficiently serve the public interest? As we careen down the inevitable path of urban innovation, let’s take stock of who the crowd is serving — and who it’s not.