Climate Adaptation & Low-Carbon Housing Challenge
La Firme
Accessible tech-enabled architecture services for improving housing quality and resilience in Latin America
What is the name of your solution?
La Firme
Provide a one-line summary of your solution.
Accessible tech-enabled architecture services for improving housing quality and resilience in LatAm
Film your elevator pitch.
What specific problem are you solving?
Latin America has experienced rapid levels of urban growth in the last decades and currently has the highest urbanization rate in the developing world, with 80% of its population living in cities (UN, 2009). Unfortunately, as the alternatives to housing offered by the private and public sector are inaccessible and inadequate, the main way of housing production in Latin America is self-construction. This means that over 60% of the population builds their own homes without technical assistance (more than 270 million people across the region) representing the main driver of the horizontal and unplanned low-density growth in emergent cities.
Multi-faceted problem:
The construction industry is one of the largest contributors to global carbon emissions, with the cement industry alone representing 8% of emissions. LatAm families build with traditional materials (brick and mortar) and, interestingly, the largest Peruvian cement companies report that between 50% and 70% of their cement sales are for self-construction projects. Selfbuilt homes usually have poorly designed structures that either need repair or replacement, or are oversized. In both cases, they represent waste of construction material that can be up to double the amount of necessary material. These mistakes and miscalculations can cost families up to 50% more during construction due to informal and improvised processes.
Low density urban sprawl is concerning because it increases land consumption and CO2 emission production due to higher dependency on transportation and sub optimized use of urban infrastructure and services. Homes built without professional assistance tend to have weak structures that fail to support multiple floors above, limiting the potential for vertical growth and densification of neighborhoods.
Layout designs fail to maximize the limited space available for families and leave little to no space for light or ventilation. Self-built homes usually build the entire area of each lot, leaving no absorbent land, key for urban resilience.
Structural flaws are especially concerning due to the high risk of earthquakes in the region. A study states that 80% of homes in Peru will collapse in the event of another earthquake.
Low and middle income families do not hire professionals (architects or engineers) because these services are out of reach, meaning that they are perceived as a luxury that families cannot afford and are completely out of their network. Therefore, most families work with maestros -informal contractors- who have variable technical expertise. On the other hand, as the current architectural design process is a very manual and time-consuming process, architects prioritize higher-end projects with clear timelines and reliable remuneration, since it's not cost-effective for them to serve lower-income projects. This, however, is a small market for which architects need to compete. The two sides of the market are fragmented, but there is an opportunity to facilitate in the middle.
We believe that, by addressing self production processes at scale and from the beginning, we can impact urban growth and its response to natural disasters and contributions to climate change, increasing resilience for families and cities at the same time.
What is your solution?
La Firme’s digital platform provides accessible and affordable architecture and engineering services for families to design their home and plan their construction. By integrating existing technologies and creating a digital-first architecture service we are able to reduce the time invested by professionals and, therefore, reduce its costs for the millions of families self-constructing their homes across Latin America.
By addressing the production of informal housing at scale, we can improve results for them and cities overall. First, the architects on our platform are trained to maximize bioclimatic features such as ventilation, insulation and natural light to provide comfort and reduce the need to install energy-intensive cooling or heating systems and artificial lighting systems. Second, by planning the construction process, we reduce mistakes and miscalculations and, therefore, construction waste. Third, through professional structural design, we enable families to safely densify their sites and slow down low-density urban sprawl. Finally, as we gain families’ trust over time, we will train our architects in the use of more sustainable materials and construction techniques so that they can introduce those options to families.
As cities continue to grow, so will the housing sector and the impact of construction-related emissions. Our solution represents an early action and cost-effective practice to avoid locking-in carbon-intensive options for several decades. The multidimensional nature of our solution contributes to reaching the expected social and environmental impact by reducing carbon emissions related to housing production, ensuring better housing investments and the construction of safer and more resilient homes in a region where there is high risk of natural disasters on a yearly basis.
How it works:
The service is composed of three main phases: Site Analysis, Architectural Design, and Final Plans. The site analysis is currently a time-intensive activity that requires professionals traveling to the site, taking measurements, and gathering data onsite. Instead we leverage existing databases and aerial imagery to automatically assess the characteristics of the lot (as environmental risks, soil type, topography, etc.) and produce an automatic report and a customized quote for families. In the cases where an in-person visit is required, we use different technologies to assess the current structure and create a digital plan. During the Design phase, families share their spatial needs and preferences through our engaging online experience. Families then choose an architect from a couple of pre-filtered options (based on location, experience, style, etc.) to design their home in only 3 online meetings of less than one hour each. Architects receive all the previously collected information and templates that enable them to focus their time on design and to work faster. Finally, families receive a complete drawing set, a booklet that translates its technicalities and empowers families during construction, and an incremental growth strategy designed to phase construction according to their financial possibilities. In summary, our service increases efficiency through automation, standardization and guidance throughout the architectural service, all of which makes it AFFORDABLE for families and PROFITABLE for architects.
Who does your solution serve, and in what ways will the solution impact their lives?
Our customers are low and middle-income families in Latin America who are about to start building their own houses. These families build on empty lots which they often inherit, or over existing constructions built by previous generations, also without any professional assistance. Families may want to renovate the current house to accommodate for new uses, or expand their current first-floor and single-family unit into a 4-story multi-family building over time. Considering the top 5 countries with the highest self-construction rates in the region, our potential target population is 1.8 million households every year. In urban Peru, our initial market, there are 86,000 families who build without professional assistance per year (INEI, 2017). Most families within our target audience work fully or partially in the informal economy and therefore have variable income sources. The decision makers in these families are usually between 30 and 55 years of age and have teenage children.
From an urban planning and environmental perspective, we will prioritize consolidated areas of cities that have the potential to densify. These areas are already served by utilities and urban infrastructure. Contrary to the common belief, these neighborhoods aren’t solely in the periphery of cities but also stitched in the “formal” urban fabric. In the case of Lima, we will focus on North, East and South districts, for example, ATE, San Juan de Miraflores, Chorrillos, and Los Olivos neighborhoods.
By providing accessible and affordable technical assistance, we will enable the construction of safer buildings, maximize their space to meet their needs, and reduce unnecessary overspending during construction. In the long-term we are not only providing a structurally safe home, but a better investment overall. Considering housing as an asset, houses built with plans are usually worth 20% more on average. These homes will be able to serve generations to come and contribute to family wealth, instead of becoming a liability.
How are you and your team well-positioned to deliver this solution?
La Firme is composed of three founding members: Mora, Fiorella and Raul. We are all from Latin America and share the same goal and passion to develop innovative solutions to pressing urban issues, primarily for our region. We have proven to each other to be a solid team with a strong collaborative spirit and have worked with respect during challenging moments. Our team combines a diverse set of skills in the realms of urbanism, architecture, social research, and venture design. Fiorella Belli studied social sciences in Peru, has led social innovation ventures and developed digital services for low and middle income families in Latin America; Mora Orensanz studied architecture and urbanism in Argentina, worked in environmental research and in urban design in New York and Latin America. Both Mora and Fiorella recently graduated from the Masters in City Planning at MIT, with a joint thesis on affordable housing in Peru. Raul Briceño studied Economics in Lima, Peru and is currently a dual-degree candidate as he is finishing the Masters in City Planning and an MBA at MIT. Raul has 7 years experience in social impact, sustainability, and entrepreneurship. He led for 5 years a social enterprise that provided an off-grid and affordable sanitation service to +20,000 people living in marginalized urban areas of Lima.
The country where we plan to launch and first grow our venture is Peru, specifically in Lima, where two of our founding members were born and raised. Raul and Fiorella have extensive experience working in social impact initiatives in Peru, working with diverse vulnerable populations. They have previously done field work, designed and provided services for this population, and collaborated with international development agencies as well as with governmental institutions. These experiences and networks will prove relevant as we move forward to launch and grow La Firme in Peru.
Which dimension of the Challenge does your solution most closely address?
Support informal communities in upgrading to more resilient housing, including financing, design, and low-carbon materials or energy sources.
In what city, town, or region is your solution team headquartered?
Lima
In what country is your solution team headquartered?
What is your solution’s stage of development?
Pilot: An organization testing a product, service, or business model with a small number of users
How many people does your solution currently serve?
During 2022, we implemented marketing campaigns to acquire new clients and test hypotheses about the main decision-making drivers of families. In less than 1 month, we had a waiting list with +20 families interested in working with La Firme to develop the technical plans they needed for their future construction projects.
Currently, we are testing the demand and are receiving approximately 15 interested families per week. We are only serving specific cases as we want to continue learning about different scenarios to keep adjusting our value proposition and customer journey. Each case varies in terms of the conditions of the current house infrastructure, number of families involved, available budget, among others. Carefully examining case by case is enabling us to develop family profiles and housing typologies to better serve future projects.
Why are you applying to Solve?
As we are in the early stages of our startup, we are actively looking to expand our networks to inform and complement our strategies in different areas. We consider that we would greatly benefit from a rich entrepreneurial ecosystem such as Solve’s. We want to be challenged by advisors on our go-to-market strategy, financial plan, team hiring plan, and overall company growth, without compromising on our social purpose.
On the other hand, we believe that our solution is multi-dimensional and can be a catalyst to enable and promote a more environmentally sustainable approach to affordable housing at scale in growing cities in Latin America. Solve will give us the opportunity to interact and learn from technical experts on the environmental side and other sustainability focused entrepreneurs and use this to keep improving our value proposition and the impact we can generate for millions of families and future cities.
In which of the following areas do you most need partners or support?
Who is the Team Lead for your solution?
Fiorella Belli Ferro
What makes your solution innovative?
Our core innovation is to have tech-enabled architecture services designed to fit the needs and financial constraints of an underserved market. La Firme's innovative model seeks to build on the existing behaviors of the target population, articulate the key actors of self-construction and progressively influence the current value chain, rethinking traditional processes of the industry.
We differ from all of our competitors in multiple ways. We leverage technology to introduce standardization, automation, and personalization in home design. Most of the existing proposals focus on the technical development of technical solutions or innovative materials that take time to penetrate the market. La Firme, on the other hand, considers the challenge of self-construction as a topic with cultural, historical, urban, social and environmental edges, in addition to technical ones, which must be addressed from a service approach. In addition, the few existing solutions that are involved in the design process are usually based on 100% standardized designs, which are not always adapted to the needs of each family and their existing house. La Firme's digital service seeks to standardize and automate the process while maintaining a degree of personalization in each project to meet the diversity of needs of families and territories. Lastly, our model engages independent architects, engineers, and maestros as partners in the process of low and middle-income housing production in an efficient way for the first time. We are creating a venture that not only enables families to plan and construct better homes while expanding the market for architectural professionals, but a model that relies heavily on a digital solution, making it easily scalable in the Global South.
What are your impact goals for the next year and the next five years, and how will you achieve them?
Impact goals by 2028:
900 families in 3 cities of Perú y 100 families in Mexico City have architectural and technical plans to inform the construction of their future houses through our service.
2,000 additional house units designed and 1000 remodeled in consolidated areas of the city as we facilitate the vertical growth in neighborhoods with access to water, plumbing, electricity and paved streets. This way, we contribute to densifying our cities.
9,000 people live in secure and adequate homes, built with professional assistance.
850 homes that incorporate new sustainable materials and pre-fabricated elements in their construction. This is only possible if families have plans and these considerations are included in the design and phasing of the project.
Allow savings of around 7 million US dollars to 1000 families through the reduction of errors and overspending during construction because of the technical plans and reports produced by La Firme.
Provide an additional monthly income of about 800 US dollars to 25 architects who will work with La Firme each month.
We plan to achieve the first 3 impact goals by positioning La Firme in our target market in Lima, Peru and then replicating the same marketing strategy when expanding to Mexico. As part of our outreach plan, we will create digital campaigns in social media (facebook, instagram and tiktok), develop a referral incentive program to increase word-to-mouth and collaborate with community leaders to gain access to a broader community and neighborhood networks. The objective behind these activities is to communicate La Firme’s value proposition clearly, increase the willingness to pay of our target segment and to position ourselves as an innovative, practical and affordable option for the planning and construction journey of middle and low-income families. Moreover, we will constantly improve our platform as we grow the number of customers through machine learning. As we grow the number of customers and collect more data through our platform, we will be able to automatize and customize the design journey for families and, ultimately, improve efficiency throughout the whole experience.
Regarding the final impact goal, we will develop partnerships with architecture departments of various universities and the official Professional Architecture Association in each country. Throughout these partnerships, we seek to position La Firme as a new work option for architects that are looking for alternative revenue sources, flexible working times, increasing their portfolio and are interested in working with a market segment they have not explored before. We will focus mainly on the cost-efficient components of our service and demonstrate how we are re-thinking the traditional design experience enabling them to take on more projects in less time.
Which of the UN Sustainable Development Goals does your solution address?
How are you measuring your progress toward your impact goals?
La Firme has set 5 main impact indicators:
Number of people living in safer and more functional homes designed by La Firme's architects - La Firme will make it more accessible and affordable for low-income families to construct robust houses that are safe and resilient. On the other hand, La Firme will allow families to better distribute their limited available spaces based on their needs, interests and preferences. Safer and more functional homes not only improve the family members' interactions and dynamics, but also introduce bioclimatic designs that maximize natural resources, such as light and ventilation, that create a better environment to thrive and reduce the use of energy.
Amount of money saved by families throughout the construction journey with our plans - La Firme avoids families incurring in future expenses to fix and repair houses constructed without technical assistance. Families that self-construct without any professional guidance end up spending almost twice the amount of the initial construction budget as their process extends over 5-10 years. Considering the average housing size and budget, a family will save approximately USD 7,000 through La Firme's solution by avoiding unnecessary repairs over time.
New housing units designed above existing structures (densification) - La Firme will enable the construction of safer homes above existing structures and enable a vertical expansion of the city instead of a horizontal one. This will promote densification, compact urban surfaces and, consequently, reduce carbon emissions in urban areas.
Monthly median revenue per architect on the platform - La Firme will increase work opportunities for trained architects that struggle to find clients as independent professionals. We will make a whole new market segment available for them in a cost-efficient way.
- Number of units that incorporate new materials - As we identify design patterns and partially standardized elements of the layouts, we will be able to attract the sustainable and prefabricated industry (which currently does not greatly operate in this segment) and include new materials in the homes built with La Firme’s plans.
What is your theory of change?
The lack of housing alternatives for Latin American families is a multidimensional problem. Both markets and governments fail to provide affordable options so families are left to build their own homes. Self-construction involves issues such as land tenure, financing, access to basic services, materials and construction techniques, etc. We focus on improving access to technical assistance as it directly tackles housing quality at an early-stage of the building process, and it’s a critical entry point that has not been solved before despite it’s huge potential for unlocking other pieces of the puzzle. Once we are able to gain families' trust and advise the construction of their homes, other opportunities arise. We can expand our services to include legal assistance, propose designs that use new materials and technologies, partner with institutions to provide better financing options, among many more. A well designed and planned home that responds to its natural ecosystem, increases the resiliency of families in a context of growing hazards such as earthquakes, mudslides, flooding, etc. But ultimately, we deeply believe that better quality housing provides a critical stepping stone for families to further improve their wellbeing, unlocking better educational, health and economic opportunities for its members and neighborhoods.
Describe the core technology that powers your solution.
Our digital platform integrates existing technologies developed by other vendors such as image processing, AI, and virtual reality into our architectural service journey to increase efficiency and enable us to scale. These technologies include processing aerial imagery into ready-to-use CAD files for architects, generative design, automatically scanning rooms and identifying measurements, automatically producing CAD plans, producing 3D images through virtual reality, etc.
Our own technology will also include machine learning to match families with architects, provide automatic quotes, assess remotely the site based on existing databases, convert technical drawings into explained reports, among other features. As we continuously analyze the gathered data from families, we will identify patterns that can inform ways of continuously improving our service. Our software maximizes user friendly and inclusive interfaces designed specifically for our target population.
Which of the following categories best describes your solution?
A new business model or process that relies on technology to be successful
Please select the technologies currently used in your solution:
If your solution has a website or an app, provide the links here:
www.casalafirme.com
In which countries do you currently operate?
In which countries will you be operating within the next year?
What type of organization is your solution team?
For-profit, including B-Corp or similar models
How many people work on your solution team?
3 full-time staff, 2 contractors
How long have you been working on your solution?
1.4 years
What is your approach to incorporating diversity, equity, and inclusivity into your work?
As a fully Latin American team and a women-led venture, we care deeply about diversity, equity and inclusion. In order to achieve this in our internal organization, we will develop transparent procedures for hiring and retention of employees, a respectful organizational culture, and equal payment policies, among other strategies.
Our three founding team members share the same values about diversity and inclusion and are committed to guarantee these values are reflected when recruiting new members, growing the venture, developing partnerships, acquiring customers and creating a board of directors.
As our goal is to serve a diverse set of families across Latin America, having a diverse international team is critical to inform our strategies to work in each country. This will allow us to bridge cultural differences, identify early-on potential blind spots, and learn from each social and environmental context.
Additionally, we have registered La Firme in Peru and were rigorous with how the company’s social impact mission and objectives were legally outlined. We are considering the option to incorporate as a Public Benefit Corporation in the USA which would also allow us to protect our mission of social impact externally and internally.
What is your business model?
As a B2C, La Firme earns a percentage from each design service acquired by families. Our automated system calculates a quote according to the lot’s size, location and number of floors requested by families. This price (which varies by country) covers the Site Analysis, Architectural Design, and Final Plans phases, including the meetings with the architect, and the complete set of plans and reports produced both by La Firme and architects.
To provide flexibility and adapt to families’ variable cash flows, families have plenty of time to pre-pay a percentage of the total service before getting started, and the rest in installments throughout the service which unlock each new phase. We are constantly revisiting the fee that La Firme keeps from the total payment as it varies according to the technologies that we incorporate and level of automation that we achieve, lowering the hours spent by each architect or engineer.
In the near future, we will leverage machine learning, automated generative design algorithms and data collection to reduce costs/price as more families use the platform. We believe there is potential for other sources of revenue, such as legal advice for families, interior design, and supervision during construction.
Do you primarily provide products or services directly to individuals, to other organizations, or to the government?
Individual consumers or stakeholders (B2C)What is your plan for becoming financially sustainable?
As a social enterprise, La Firme aims to sell a service to become financially sustainable. In order to achieve that, we will need an initial investment that we will seek through impact investors primarily early to finance our growth. We do not plan to subsidize our service but to make it affordable and attractive to our target customers and increase their willingness to pay. We will not seek donations and will prioritize covering most of our operative costs with our own revenues once we have our platform running.
Until July 2023 we will continue to refine our service and business model using the current funds we have raised and a few more grants we have applied to. By mid of 2023 we will start raising funds from impact investors to be able to build the first version of our platform, grow the team and our current operations, and invest in marketing and publicity. In this way we hope that we can start covering our costs from our revenue in 2024.
Solution Team
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Fiorella Belli Ferro Co-Founder, La Firme
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Raul Briceno Brignole La Firme
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Mora Orensanz Co-founder, La Firme
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Our Organization
La Firme