A new Passive House build and design company in Melbourne has snapped up the opportunity to promote equity investment to smaller or so called “retail” investors.
Melbourne based architect Felicity Bernstein has two passions. One is to demonstrate to Australians what a very healthy home looks like – a home that is also net zero energy and fossil fuel free. Another passion is to build a business that promotes this.
For the first she’s pursuing her commitment to the German developed Passive House system, under the umbrella of Hütt Homes.
For the second she’s launched a crowd funded equity campaign that takes advantage of new legislation that allows companies such as hers to advertise for smaller investors to take equity stakes in her start up.
On the potential for Passive House, the timing could be near perfect. Right now, the concept of airtight, low carbon, healthy version of building, for houses and commercial, is sweeping through sustainability aficionados with the kind of fervour we saw in the early days of the green building movement.
When you delve into it, it’s no surprise. Oliver Steele’s The Fern in Redfern, with what he says are Australia’s first Passivhaus apartments (promoted on The Fifth Estate and its sister site The Green List), offer the potential for “no bills, no noise, and no dust”.
In Perth, Passive House expert Daniel Kress is so frustrated with the slow pace of take up for the concept, he’s launched a series of nine day courses to train people directly.
The system offers intelligent design that can compensate for sites that don’t have perfect northerly orientation and can’t have passive solar. Or sites that are subject to pollen dust or traffic fumes, where the Aussie habit of airy and often leaky homes will have annoying consequences for asthma suffers and others.
Bernstein and her partner, who hail from Germany, are smitten.
But Bernstein wants to take things further and build houses with the lowest possible VOCs (volatile organic compounds), use lowest possible embodied carbon materials and provide net zero energy.
Her plan is to build a prototype house that her family will live in and make available as a case study for five years, to benefit intending clients and help promote the concept to a wider audience, including through television.
The business will use the prototype as a kind of demonstration home, but already there are three other projects in the pipeline.
She told The Fifth Estate that the equity raising program is mainly to fund marketing and promotional capacity, before embarking on a second tranche of equity funding to scale up the business.
Crowd funding grows in scope and scale
Legislation passed last year means that the crowd funding programs that have become popular in the past 10 years can now be promoted through a prospectus to small or retail (mum and dad) investors.
In the past, promotion of equity investment was only available to sophisticated investors, defined as people with net wealth of $2.5 million or had earned $250,000 a year for the past two years.
Bernstein’s business is using the Birchal platform to first launch a two week expressions of interest campaign, now concluded, for investment tranches of as little as $50 to a maximum allowed $10,000.
What investors get is shares or equity in the company, explains Birchal founder Alan Crabbe who is also founder of crowd funding outfit Pozible.
“Traditional” crowd funding such as Pozible “has been around, but it can’t raise capital. It can only sell an item or an experience.” Such as a book that will be published or an event, he explains.
The investment is via ordinary shares, which means you get a vote in the company.
“One of the key changes to the legislation is that it allows them to promote and advertise they’re open to investment,” Crabbe says.
The regulations governing Birchal are managed by the Australian Securities and Investments Commission.
Other businesses jumping aboard the platform include a razor delivery service, a digital loyalty service and a watch company.
Bernstein’s company is the first in the sustainability arena, Crabbe says.
“We think this is really valuable for more consumer facing companies as a way to involve customers and fans and the community.
“For us this is one of the first companies in sustainability and one of the first in the property space.
“We like it. I think the approach is that Felicity has taken with the business is quite unique. It’s a property developer, it’s sustainable and a design company.”
He thinks there could be “a lot of people” who want to invest in this area.
Hutt, he says, doesn’t want to access big tranches of funding, just enough seed funding to take the business to the next stage of development.
Key is to get a prototype house that can demonstrate what great results can come from a Passive House.
Bernstein told The Fifth Estate that the process has been highly successful so far with strong responses on the expressions of interest process.
Respondents have been from “all walks of life” she says, “from industry professionals and private people and a whole group of people who like to invest in other companies.”
She hasn’t decided on upper limit for investment but it will “probably be somewhere $350,000 to $500,000”.
Most will be used for marketing, including faster development of the website, sponsorship and “really pushing the brand.”
For now Bernstein is happy for her and her family to build the prototype.
“It’s a bit of a display home. We’ll use it as a case study home, which means it’s lived in.”
The various components of the house will be measured and monitored including air pressure testing performance. Another will be the level of VOCs in the house, “because I want to build a home without toxins, so that’s quite important.”
The case study will run over five years and the house will be open for seminars and wine tastings and so on, Bernstein says.
“We live in a motor home so we can make this happen.
“We are pushing the limits on this so it will go far beyond the normal.”
Key will be to build “completely foil free” home, that is without the usual foil membrane and chemical based membranes that a Passive House is usually wrapped in.
These are still typically very healthy homes, she says, because through the ventilation system any impurities are flushed out.
But Bernstein is going further.
“We don’t’ want any membrane at all so we’re working with wood and board – a cross laminated timber that slides together.
“Then outside we will use wood carbon insulation mixed with resin.”
Bernstein wants to go biophilic with as many natural materials as possible use plants to that can extract any residual toxins and turn them into oxygen.
“Because it’s very hard to build a completely toxin free house.”
On materials the plan is to go as natural as possible.
“We’ll push the limits but we probably won’t get away without the plasterboard. Plasterboard is not very green and has quite an unhealthy footprint.”
“We made a lot of conscious choices in the materials we use because materials have very high carbon footprint.
“The other important thing is to get to completely fossil free.”
The house will be run by solar power and expected to save 97 per cent of regular energy consumption. Tesla batteries will chip in with the night time use and to charge the car.
In addition the house will have a high level of automation “because it’s part of the modern lifestyle.”
This includes lighting to mimic natural circadian rhythms such as avoiding blue light and using warmer colours at night to encourage sleep.
“A mix of warm colours – red, orangey light.”
“So basically we have all colours and can set it to mimic night time and can set it to wake us up by mimicking sunrise, so it gets the melatonin production going.
In media statements she says: “Wellness should be rated much higher when it comes to housing. The majority of our current housing stock makes us sick, silently… In western world countries people often spend between 80 per cent and 90 per cent of their time indoors, where levels of toxicity can be between two and five times higher than outdoors.”