Melbourne and Sydney are looking to take their Smart Blocks apartment sustainability program to market, with a “service design competition” to find the right operator to develop and expand the program.

Smart Blocks is a successful national program helping strata building owners and managers improve common property energy efficiency, including lighting, water systems, pools, amenities and HVAC. It was created with a $1 million grant to Strata Community Australia, and developed by SCA in conjunction with the City of Melbourne, City of Sydney, Owners Corporation Network and Green Strata.

The program was last year gifted by SCA to the City of Melbourne, and has since been managed in collaboration with the City of Sydney.

While there is strong support and demand for the program to continue, the City of Melbourne’s Urban Sustainability section sees private ownership of the program as being potentially more effective. Benefits would include an increased potential to meet customer needs; leverage of the start-up entrepreneurial sectors, which could tap multiple income streams like owners corp fee-for service, council subscriptions, supplier contributions and advertising; increased capacity for council to focus on strategic work in the apartment sector; and reduced council operational costs.

A private program operator would also be able to give sustainability product and service referrals, something demanded by customers but which the council said it could not fulfil.

A “nimble and more responsive external entity”, a report to council said, would also lead to greater carbon savings.

The proposal from Melbourne is for itself and Sydney to provide seed funding of $100,000 each over two years to a new operator, who would develop the program so it could stand on its own legs, and potentially expand its reach and scope.

“This figure was calculated to be large enough to enable the new owner to innovate rapidly but small enough to ensure they ‘have skin in the game’ and are investing their own resources to create a sustainable business model,” the report said.

The cost of running the program for council was estimated at $250,000 a year.

The service design competition will involve:

  • a competitive national recruitment process
  • the use of a Business Model Canvas as a frame to test applicants’ capacity to develop and run an effective enterprise
  • the formation of a judging panel including experts from City of Melbourne, City of Sydney and entrepreneurial, technology and strata sectors

Following a successful bid, the program’s intellectual property would be licensed to the new owner for two years, following which outright ownership would be granted on the basis of quality performance.

The proposal was supported by Melbourne’s Future Melbourne Committee on Tuesday night and will go to council for approval next Tuesday.

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