Scott Clements’ Vision: Unleashing the Potential of Brisbane
In episode 39 of REDD’s Business and Technology Podcast, join our host Jackson Barnes and co-host Nigel Heyn, in this fascinating episode with Scott Clements, the enthusiastic managing director of Inertia Engineering, who offers valuable insights into the world of engineering and the ever-evolving landscape of technology. He begins by highlighting the seismic shifts that technology has triggered in the engineering realm over the past few decades. From the archaic days of shared email addresses and paper drawings, engineering has transformed into a digital marvel, with 3D modeling and efficient communication systems at the forefront.📈
Scott delves into the challenges and opportunities presented by emerging technologies like AI, emphasising the need for engineers to embrace marketing to thrive in this tech-driven era. He shatters the stereotype that engineers are averse to marketing, asserting that it’s all about showcasing your problem-solving prowess.
Scott’s enthusiasm for Brisbane’s future and its upcoming Olympics is palpable. 🌟 He insists that seizing this golden chance isn’t just about hosting a stellar event but leaving a legacy that’ll propel the region forward. 🏆 Turning to the housing crisis, Scott suggests streamlining approvals, reducing construction costs, and embracing the game-changing “build-to-rent” concept. 🏡
Scott’s wisdom and passion paint a vivid picture of a city ready to evolve, with engineers leading the charge. 🏗️ His insights will leave you inspired and contemplating the boundless opportunities awaiting Brisbane and beyond. 🌇🌏
#EngineeringEvolution #BrisbaneLegacy #TechTransforms #BuildToRent #OlympicDreams
00:00 – Opener
00:20 – Start
03:19 – The Transformation of Engineering and Marketing
04:58 – Why did Scott go to Australia?
06:58 – Ideal time for engaging the engineering team
07:40 – The “Midtown” Project
08:51 – How did Scott end up at Inertia?
11:05 – What is the story behind Inertia?
11:53 – What sets Inertia apart from other engineering firms?
15:00 – Efficiency Through Digitalisation
20:10 – The Impact of AI and Automation
24:02 – Brisbane’s Olympic Opportunity
26:26 – Challenges in Planning for the Olympics
28:29 – Solving the Housing Crisis
33:00 – Challenges in Housing and Planning
37:19 – The Promise of Build-to-Rent Housing
39:41 – Daily Challenges for a Business Owner
42:14 – The Future of Southeast Queensland
42:48 – Outro
If you would like to discuss any of the topics discussed in this episode further with a REDD expert or if you would like to be a guest on the show, please get in touch either via our website, [email protected], or through any of the links below. https://redd.com.au
Hello and welcome to Redd’s Business and Technology Podcast. I’m your host, Jackson Barnes and I’m your co-host Nigel Heyn. Today we’re sitting down with Scott Clements, who’s the managing director of Inertia Engineering. We’ll be speaking about everything future of the engineering and construction industry. Scott, thanks for coming in.
Thanks for having me.
Alrighty. Let’s mate, let’s start with your background and what you did before. Inertia Engineering.
Yeah, well, I suppose I went through the normal path of going to university at UQ. Spent the first six years here doing engineering, structural engineering for a local consulting firm, sort of mid-size firm here. Then decided to go overseas as most Australians do at that point in time and spent three years in the UK.
Why did you go to the UK or just exposure or
Just the travel really.
Yeah, so worked over there, worked for a year in the north of the UK in Leeds. I was very keen not to go to London. I wanted to see the rest of the UK instead. So worked for a year in Leeds and then two years in Bath. Very lucky in Bath to work for a very sort of cutting edge, innovative firm there, a firm called Bureau Happel who are highly regarded English firm, who also have offices in I think the States and in Singapore as well, and Europe. Good experience.
Do you learn more over there than you would’ve just working just in Australia?
It’s certainly, and I think I already got the fundamentals of the technical side in Australia, in Brisbane, but I didn’t get everything that we could do. What are the opportunities out there with different construction techniques or different ways to approach things, different culture. The way they ran as a business was a lot more fluid, I guess a little bit more of a flow business than a structured business, although they had structure as well. They did things like hiring graphic designers to really lead engineering work, lead projects where normally in engineering you’re sort of after the architect or someone like that, so they’d do projects like Bridges or stadiums that engineering is such a crucial part of it that they had the add-on sort of front end side of things to drive the design. So I was very lucky that I came across in a senior level already, so I got the opportunity to then work really at the front end of projects, really cool projects, such as I had to look at this stadium in Marse in France where existing football stadium there and they wanted to retrofit a roof over the top of it, and so for weeks on end it was just me and a graphic designer working out how we could make it look, but also make it work as well at the same time. That’s
Awesome. Did you do any, I imagine over in Leeds for example, there would’ve been a lot of old buildings you’d have to renovate in the stuff, whether it would be nothing like that in Australia beyond 300 years or whatever?
Yeah, yeah, yeah. There’s obviously opportunities all the time for that sort of thing. It was a brewery redevelopment, so it was in Dorchester, which is in the south of England. There’s massive, much bigger than Castle Main here, a big precinct and then so they redeveloped that or probably are still redeveloping that at the moment. Residential shopping centres, cinemas, all sorts of things. Working with the existing structure and some things that I’d had experience with a little bit here and some things I probably clash with the locals on as to I think they could be done better as well, but yeah, great opportunities. Yeah.
We will speak about inertia engineering in a second, but did you bring any of that experience and graphic design, lead engineering next into the way you operate inertia?
Yeah, definitely. I think that’s the biggest gap in most of what engineers do here, structural or civil or whatever type is that they don’t think enough broadly. They don’t think enough holistically around the problem they’re trying to solve. They see a very narrow, this is what I’ve done before, so this is what I should do this time without stepping back and looking at the big picture, understanding the big picture sometimes we always talk about that. Sometimes you don’t even have to solve that problem, you could make it go away by looking at it in a different way. So yeah, that side of things and being a little bit more creative upfront, thinking around things rather than trying to go through them,
That sort of
Awesome. We’ll unpack that creativity piece a little bit later, but first when you finished overseas and you come back to Australia and why’d you come over to Australia and then why did you start in with inertia?
Well, actually I’d decided when I was leaving the UK had not be an engineer again, so that was a bit of a sideways journey. I’m not, while I can do the technical side, it probably doesn’t excite me as much. It’s probably the front end of the technical side really does. I suppose that’s my holistic problem solving side where you can have an impact across a range of different areas. So
What’s the front end? Just for the listening who don’t understand?
I suppose it’s the earlier you get involved in a project, the more you have to, the more influence you can have by understanding what every different stakeholder caress about. Whether it’s a developer build five or six different engineers, you might be working on that. The architect, the town planner, the urban designer, all sorts of, we work in teams of 15 people and I just love knowing what everyone really caress about and getting involved in that side of things so I can then, even though my role or our role within that is less than 10%, but potentially at the front end I can think my way around a problem or help be part of a big complex team of consultants to essentially just make a great impact on that project
As opposed to more of an architect led, here’s the design, make sure it’s not going to fall over engineering stuff.
Pretty much really like the collaborative process more and I think that when you get really good consultants around the table that are good at what they do, but also good at talking and listening to each other, that’s when the best results.
So when through the process for anyone listening who’s maybe looking against something in the future or in that industry at all, when’s the ideal time to engage the engineering team, do you think? In the process?
Always right at the front. Okay.
One, I think. So look, we’ve done amazing projects. We’ve got engaged before the developers bought the site,
So they go, look, Scott, we are looking at Scott or Inertia or whoever it is, we’re looking at this site. It might be an existing building or it might be just a piece of land. The piece of land might be, well, what are the constraints around it? How can we work around those constraints? What do we need to worry about? What do we need to look out for? What are the opportunities too? There’s a few that are highly constrained sites that everyone else passes up on, but we look at it and go, actually there’s a solution, potential solution here,
And if you get it for the right price, well then you can get the value out of it. There’s one particular project that we did in the city that’s a multi award-winning one now called Midtown, where we’ve got engaged to do pre-purchase due diligence of two existing buildings and our client had a dream to say, well, how can we add levels on top of these two existing 20 story buildings and said, can you have a look at the building? Can you have, you’ve got two weeks to do some due diligence on working out whether we can do this or not, which is obviously we weren’t going to be completely confident in that period of time, but we’re confident enough that we could go ahead with it and based on our advice and some architect’s advice, they purchased that building and we ended up with seven stories on top and joining the two towers together and a very successful and really interesting project that we’ve actually been written up in the American Institute of Civil Engineers. We’ve presented to engineers in the UK about
That was Midtown?
Yes. Cool. So you moved back to Australia, don’t want to be engineering anymore, but still like the early concept side and then how did you land inertia?
Yeah, so my of Sojourn away from engineering went into I guess more development or actually project homework. So I was involved in the construction, marketing, finance, sales side of that and I love that being involved in a whole different part of the industry and it’s probably what’s driven me to understand and be involved upfront in projects. I have obviously understood different elements as well and can add value through that. Unfortunately the G F C hit that little sojourn and then I was getting about to get married at the time. I thought I better get a real job again. So I started working with my now business partner at Inertia. He’d started a small business. It was the version before Inertia. It wasn’t called inertia at the time, but he was just working out as a sub consultant to another geotechnical engineering firm and he had too much work on. So I said, look, do you want me to help you out? I just started doing some contract work and I think six months later I said, well, should we give this a go? We seemed to be offering value to people and getting more work and out of the G F C we kept growing, so we made an agreement to join up and that was 2008. Three years later I’d call the start of inertia when we got a bit more serious about things like websites and marketing and our own office and whatnot.
How many employees inertia at that time?
So 2008 I was essentially the second one. So there
Was three of us all
Together and then 2011 when we say we got serious, it was only five of us still, so we’d just been ticking along doing some smaller structural engineering work and being quite happy. I had started a family at the time, so I wasn’t really trying to spend all my time in the office, but I probably always knew that I wanted to do more than just sit on the tools I guess.
Did you change it to Inertia Engineering Inn 2011 and what’s the name? What is it? The background?
The real story is I wanted Momentum, but I couldn’t get it, so Inertia was the next option. I think that it’s worked out really well, actually. I think it’s better than Momentum. Inertia’s a little bit misunderstood I think is a term in this country. I know a lot of people that I’ve spoken to, particularly older Australians that used to use the term, think about it as inert as in not moving, but inertia is actually, it’s in its state of movement or otherwise not movement unless acted upon by an outside force. So essentially our take on it is that our services always moving and our projects stand the test of time.
Okay, cool. What sets Inertia Engineering apart from other engineering firms?
I think there’s a couple of things. There’s probably maybe three things. I think culture’s always been a big drive for us. We spend and we have always been a lot of time connecting with each other, doing different social things, doing charity things as well, and I think everyone that has, almost everyone that’s come there has said, oh, this is different. We really enjoy this being here. So that’s probably the baseline for us. The cultural side of things, I suppose my background being outside of engineering has helped as well, so I like to teach our younger engineers more about the industry than just their narrow focus that they learn at the university, which is essentially computer programmes and spreadsheets and things like that. So I really like to show them the view from everyone else’s eyes as in the other stakeholders that are involved in a project or whatnot. Probably lastly, marketing. I really liked marketing, I enjoy it. So I think that some of the engineering firms are catching up a little bit now, but 10 years ago no one was doing anything at all.
Why do you like marketing?
I dunno. Good question. Okay.
Most business owners are natural marketers, right?
Yeah. You don’t think of engineers as marketers though, but
You don’t think of Scott as an engineer though or a
I do have a saying to anyone that will probably listen to me most of the time, but particularly to our people, is that only doing a really good job is only half the job. You’ve got to tell people about it too. Not tell people about it in an arrogant way, but let people know what you can do and that the value you can offer to a project or a client and then you get that opportunity to do it again
Ultimately engineers love solving problems. That’s generally what they did engineering for and what drives them to do engineering. They’d get more opportunities to solve more problems if they tell people about it. So I think that’s probably the drive a little bit. And I also have another saying we’re only competing against other engineers that don’t always, they feel like marketing’s a dirty word.
Yeah, that’s what I thought most engineers thought about marketing, which I thought was very surprising when I come in math actually. So that’s cool and we can unpack that one a little bit in a second, but before I do, there’s a lot of ways I want to take this not do you want to jump in a couple of questions first?
Probably the first question I’ve got for you Scott, is you’ve seen obviously technology transform organisations like yours over the past couple of decades. Can you share with us where you’ve come from? Where do you see go? Obviously there’s so much coming in the likes of AI and automation and obviously cyber is integral to everything you do. Just take us through the journey.
Well, I’m going to show my age a little bit here was when I first started in, before 2000, let’s just call it that our office had one email address that we all shared. We still had paper copies of all our plans and plotters and we still sometimes drew by hand and drew and had to scratch out things when they were wrong and redo them or redo it all again. So the first step has been that efficiency on the digital drawing side of things without a doubt, and that’s probably the thing that’s come the longest way I think the industry in my time. I think that Australia’s still behind other countries, so
Particularly on the drawing we’re behind or where do you
See Yeah, yeah, it’s coming in now. So most of the leading, I suppose countries such as the UK or Germany always have integrated building models where the clash detection between structure or services or anything else is almost automatic, and then that building model then gets used for the life of the building to understand what maintenance requirements and things like that are. We’re doing it now, but we were slow on the uptake, particularly in the private space there. Government’s mandating a lot of this now, but the private space has been slow, so that’s probably the biggest change I think. Then I’d probably go to operating systems, how we manage projects, how we record our time and things, how do we record communication as well? That’s something that we did probably 12, 10 to 12 years ago. We have an amazing database with pretty much every single email communication on every single project we’ve done that we can pull up at any time, and it helps us when we have with a changeover of personnel or an old project come up, we said, what happened here? So that sort of thing has really helped us.
How did you do that 20 years ago?
Oh, that was about 10 years ago that,
Yeah, before you had, because now you’ve got product numbers and you captured the emails and stuff. How was that done 15 years ago?
Yeah, how do we do it beforehand? I don’t think it was done much at all. That’s the difference I suppose the emails, you’d sort of save the important ones manually. We’d drag it over into folder or print them out or
We’d still have manila folders for every single project where you printed all the important things out and it’s obviously a little bit down to trusting humans to print the right ones out and record all the information required.
And obviously as we all know, the communication side of things has changed a lot in the last few years with the advent of covid and driving things like teams and Slack and all that sort of stuff. So we were using Slack and whatnot before that, but I do sometimes think there’s too much. There can be too much of it, but yeah.
And leading ahead, Scott, the challenges you as a business owner facing with technology and where we’re going. Can you share what those are, what you see?
Yeah. Well there’s obviously challenges and opportunities. I think there’s a lot of opportunity in, for me, there’s a couple of things we’d like to focus on and personally one as a business owner is to really understand in depth how the business runs up to date day to day. That’s sort of my dream to say all the metrics, the key metrics of the business and our key clients are at hand at all times. Now we’re not far away from that, but we’re a long way from that in a lot of ways, and that’s probably more humans in the way of technology or being able to pull all the different parts of technology together. I think that’s a great opportunity for anyone that wants it to run a really smooth, we know that businesses aren’t always smooth, but as smooth as possible business with the up-to-date information that we can get to make decisions, critical decisions all the time, and to make sure you’re also servicing your clients, which is really what the business is purpose is, right? I mean, I’ve been amazed with the change in advent of ai, not necessarily yet in our industry affecting that, but the uptake from, we wouldn’t even have this conversation two years ago about AI and now everyone’s talking about it. Some people, as we’ve talked about, are calling things AI that aren’t ai. That’s right.
It’s a buzzword. Any software these days that comes out in this news, AI power, this podcast is all done by ai. That’s right. We’re not really here.
I truly believe that it will hugely impact what we do. Not just ai, but just different ways of programming things. There’s a lot of what engineers do that can be done by a computer almost without input or very little input, and I would see that, I’m just throwing numbers out here, but I would see that possibly 50% of what we’re doing now will change and not be done by a person, really person
So maybe not the first, but certainly not the last. In that side of things is important to us to make sure that we’re not left behind, whether that’s left behind because someone else a competitor does it, uses technology to do it better or uses technology to do it cheaper, which is probably more where our industry goes normally cheaper rather than better, but yeah.
And are clients demanding any particular technologies or new ways? Like you mentioned earlier that we are behind the Germans and the Europeans. Is that translated into demands that customers put on you as an engineering firm to embrace newer technology platforms or systems or anything like that?
Not really as yet in the straight engineering design and consultancy space, I think that in reality only our really sophisticated clients, our best clients really understand what we do in a lot of ways anyway. There’s a lot that, and certainly the general public, when you say you’re an engineer, half of ’em still think you’re driving a train. So there’s a lot that don’t fully understand how we get to a point, and that’s back to what I was probably talking a little bit about marketing before is that engineers don’t explain it well enough either, so it’s probably on us more than anyone else. So we’re not really outside of the drawing and digital side in the three D modelling side, that’s a must. It’s our opportunity to show what can be done differently, I think, which is a really good opportunity because once as you know, when you would put something out and show the benefit of something in that technology early and then that’s sort of automatically associated with you and your service.
So yeah, not so much yet. I can see more broadly the construction industry changing in the next, well, I probably would’ve said this 10 years ago, but maybe in the next 10 years we don’t do a hell of a lot of modulate construction or prefabricated construction. We tend to just throw people into something on a site, but with the pressures that we’re currently having, that’s coming out again. So that changes the way we design things too, because you then, what modular and precast tends to do in a project is it means you’ve got to design really, really accurately and a lot earlier in the process. You can’t wait until it’s being built to resolve your design. You have to have it fully resolved, fully coordinated with the other specialists, and then they build it and offsite and throw it up on site. So
That’s exciting. I mean, 50% of job being automated with ai, that’s a crazy opportunity for whoever masters that and gets there first. It has been interesting. I think the amount engineering firms rely on technology over the years. You’ve just got more and more and more and more, right? It’s going to be much bigger tech spend less humans probably in 10 years, which would be pretty exciting. More broadly speaking, you mentioned before we jumped on the show, you are really passionate and excited about Brisbane and the opportunity we’ve got here. Do you want to speak a little bit about that?
Yeah, well, I’m a Brisbane boy and I do think we’re in one of the most livable cities in the world and I’d probably extend that. I would extend that to southeast Queensland in general. So when I say Brisbane, I’m really talking about Southeast Queensland, but ultimately I’m from Brisbane, so I use that term more than anything as we know, we have the world’s biggest event coming to the smallest place it’s ever come to. That’s the cool thing about Brisbane winning the Olympics is that we’ve got a real opportunity, we’ll be on the world stage as a relatively small city really, and with that drives all sorts of desire to build and to live here and for opportunities for people to come and see and go, oh, look what they’ve got there. I do fear that we might not fully utilise or leverage the opportunity we’ve got. I have no doubt we’ll put on a great Olympics.
What do you mean by that? Why?
I think that the opportunity of the Olympics is not just to put on a great Olympics. The opportunity is to create a legacy for a whole region or a whole city for 50 years. So there’s once in our lifetime chance, probably once in two lifetimes chance that Brisbane’s going to have an opportunity that people can throw all sorts of money at the city, the infrastructure of the city, not just sporting infrastructure but transport infrastructure in particular and development in general. It’s almost an unlimited, it will be almost an unlimited pot, but so how can we plan around using that to the best advantage for future people in southeast Queensland so that we we’re not in 2050 talking about traffic problems or transport problems or all sorts of things like that.
There’s a lot of people saying that now that obviously there’s a bit of a housing crisis going on already traffic’s getting only worse at the moment. Some people are actually negative about the Olympics coming in because of those kind of concerns, which is going to be interesting. What are some of the ways you think that they can plan for the Olympics 2032 without causing all those problems and planning? So it is a legacy. What are some of your ideas?
We should be voting Scott in as a politician, we need good leadership.
Look, transport, it’s everything to me lines up with transport first. We’ve had an announcement about two weeks ago about the development of Hamilton North Shore. I think the number is something like 12,000 new apartments in that area over the next 10 years or so. It’s the biggest growth area in Brisbane. It doesn’t have a train station.
We’ve got an opportunity to put a train station there and I have no doubt that there’s conversations about it, but I don’t understand why that should be the first bit. The housing bit comes after it. So we’ve got a funny city where we’ve got some really great places that should be developed that aren’t being developed and some places that probably shouldn’t be developed. We generally do follow public transport, but then some of it and train lines in particular in our high density areas. But then we’ve had over a 20, 30 year period a real push for development around large shopping centres. So that might be the Frank Lowry rule, I’m not sure, but we’ve got a huge density at Chim side with limited transport out there outside of buses. Macro batts the same thing. Why did we choose those hubs? Well, we know what we chose those hubs. There’s big shopping centres there, but why aren’t we choosing hubs that are perfectly capable of transporting mass, transporting a lot more people? Also, please don’t choose places in the flood zone like Milton or make sure you sort of mitigate against those issues.
Shopping centres in schools that seem to be the areas everyone just flocks around there and then wants to go in those areas because of that, which is understandable because you need to get close to those things if your young family, for example, you got to look for good school areas and that kind of thing. Makes a lot of sense. What do you think some of the challenges apart from transport we’re going to see?
I think the biggest one that everyone’s talking about in the industry at the moment is just cost of construction.
The government spend that’s happening on health right now and health in the next few years will then will actually overlap with the spend on sports infrastructure. So we’ve got an unprecedented spend from government on construction activities. Now the issue with that is we’ve got a limited supply of people, limited supply of construction supplies, but particularly people. So those two government spends can’t not happen particularly the Olympics one, but the health one’s already there and it’s already happening. So what it’s doing is it’s driving up construction pricing throughout the whole industry. We have particularly at that high end of government spend, they will all be unionised labour forces with high pay rates and they’re starting to suck up other sort of not normally government going into that space, which I don’t blame them. They’re looking for the best return and the best pay and all that sort of thing. But it’s pulling them out of the private development space. And the private development space is the space that provides all their houses,
Which is super important because like I said before, it’s already in a housing crisis. There’s all this health and Olympics kind of construction going to happen and people need to be in construction and building those kind of things. The construction industry has had a pretty terrible time over the past few years with collapsing, like you said, children, people and I increasing costs going crazy and it’s a risky business. I think everyone even five years ago looked at construction is potentially the risky kind of industry, but I think now more so than ever, what are some creative ways that industry can fix those challenges?
Well, it’s interesting. It is. I think it’s starting to be fixed a little bit already.
The real issue with builders, and I’m not an expert necessarily on how they contract and the solutions there, but the real issue is that they lock in pricing on a particular day and two years later they’re still building it. And what happens is that their input costs in their model of the price change but their end price. So I’ve said that I’m going to build this for a hundred dollars. I know my costs are $80 at that point in time, two years later my costs are now $110 and that’s what’s happening and it’s a particular contract system that does that. There are other models out there that are starting to be used a lot more frequently now.
Cost plus models,
Cost plus managing contractors, a number of different ways of doing it where builders have just got to the point where they don’t have to accept the other way. Probably we’re all our own worst enemy in construction and engineers and they’re different, but builders are the same. Once it gets quieter, they’ll start going back to that and accepting it again.
It’s a hard challenge, right? Because even for the person who’s signed the contract wants to get a thing built, it’s pretty hard to budget for cost plus or because you got to probably forget finance for this staff and it’s a huge kind of design process to go through and if you dunno what it’s going to cost at the end, that’s why they obviously fixed price, right?
Yeah, finance is the biggest issue. How can I lend you money to do this if I dunno how much that’s going to cost or if it works in the end
And the banks aren’t going to loan you between six and eight mil somewhere, it gets a little bit tricky.
But I think that a friend of mine always says the solution for high prices is high prices. So the market does sort itself out at some point, but we probably just have to learn from these big swings. Brisbane hasn’t had a big swing in market forces in construction for a long time and that’s been a great place to work because we can know what’s happening, but what we aren’t very good at is when there’s a big change up or a big change down and that’s the problem.
Without getting political here, what’s your thoughts on the residential housing shortage and what do you think can be done?
Yeah, it’s a complex problem. I think that there’s a number of things and I do think that the federal and state governments are doing the right things as far as funding for social and affordable housing, it is probably a little bit of a bandaid. I think throwing some money at something very quickly to go this now needs to be social now, needs to be affordable. The longer term fixes are probably a couple of things and a couple of things I’ve seen done in other places pretty well. One is just reducing the costs and the red tape around construction is a huge thing. So
Around the approvals
Around the approvals is particularly like six months or 12 months extra can add so much cost to the project, allow people to do small infill projects more often. Brisbane’s not great for that. In fact, since I think 2014 have almost been anti putting little infill projects, everyone likes to protect their leafy suburbs and houses and that’s what we vote for. To be honest, that’s our fault as residents to say not in my backyard type of thing,
But that’s probably the most affordable type of infill you can do. Whether it’s Granny flats or it’s a couple of townhouses or whatnot. That’s the stuff that actually people can still purchase or rent for a reasonable price. And I guess the other thing I’ve seen done overseas, and I’m just thinking post more likely the UK is that when they have a larger project and it’s starting to be done a little bit more now, is that they actually mandate that a certain percentage of that project’s affordable so they have to be delivered so it can be rented or purchased at a lower price point and they get plenty concessions or whatnot around that and it’s starting to be done here
But more of that to me is a longer term solution around it. A bit of give and take.
Yeah, it is an interesting challenge because you’re right, they’re that not in my backyard thing because people have their house and they want anyone in Australia blocking their view. People get upset. I cut down a tree at my place and my neighbour said, I’ve been watching that tree go for 20 years. I was like, okay, alright. He was dropping stuff on the roof so we had to get it cut down and he’s like, but I’ve been watching that. I was, yeah, so I can imagine at a wider lens, there’d be so many other problems from people in the family suburbs building a four story thing with much more affordable housing. A lot of people will get happy about it.
I’m seeing, and the issue normally happens is that it takes a lot of pressure to shift people’s perceptions
And once you start this, I asked this question of a leading ybi, yes in my backyard advocate not long ago and she said, I said, do you see this actually YIMBYs winning in other parts of the world? And she said, yes, there’s parts of the states for instance, and it is just come around because of the simple pressure of having, for instance, homeless people on the street or having things that aren’t working well in a community and then going, alright, I can actually understand how helping provide lower cost housing will help the whole community not, it might a little bit negatively impact me at the start, but everyone gets used to it after a bit anyway and they’ve actually got a better, stronger community to live in. It’s just that we don’t have, I don’t think at any level of government, anyone with a strength to stand up and explain that and show it and lead it, but particularly at a local government level, this is probably a broad statement that I probably shouldn’t save it. It’s a broad statement but very reactionary to the vocal minority.
What are your thoughts on the build to rent that’s going on? Do you think that’s going to solve any challenges?
Without a doubt, yeah. We’re scratching the surface that only at the moment, but in the US it’s huge. I dunno the figures off the top of my head, but from a percentage perspective it’s 20 or 30 times what we’ve got here built to rent housing in that’s planned in Australia, planned or in development is still less than 1% of housing supply. Even though most of these built to rent are 200 plus units and some of them are 600 to a thousand. The stuff that’s coming up, it’s still a very, very, very small part of what we can do. And I think that there’s real opportunity to, when you get the big ones, they create communities by themselves as well. The reason seems to be, and again, not an expert on the financing for build to ramp, but the reason seems to be that the funding model is very different. So it’s not necessarily just about the initial return on selling something, it’s a longer term, more patient capital superannuation investment, that side of things that they can accept a slightly higher construction cost than build to sell.
The premise around that is that it’s also service to living as well. So if the people that can get into cheaper housing doing a build to rent kind of thing and lower cost of living also get better service and a bit of a community look like Gasworks for example, that’s pretty cool over Gasworks actually. There’s some good apartments up there, for example with downstairs, there’s heaps of culture you can go down to and shopping centres right there and it’s good location close to the city. So I mean if I think of view, like that kind of concept makes a bit of sense to be honest for Brisbane,
Oh look, if I was mid twenties and wanting somewhere to live, I’d be definitely looking at that as an option. Great, great services, they’re not necessarily more affordable, necessarily cheaper from a rental perspective because you’ve got to pay for all those services, but for what you get for lifestyle and it is more affordable than buying something.
Alright, I think that’s all the questions I had. Anything else you wanted to add
Before we close out? Yeah, the only question I’ve really got as a business owner leading inertia to be one of the best in southeast Queensland and passionate about Brisbane. Scott, what are the challenges you face on a day-to-day basis? Give us three things that you see that is common as a business owner that you are faced with on a weekly basis. Good
Question, Nigel. Look, the one that’s obvious at the moment is lack of resources. And that is discussed almost on a day-to-day basis at our business. It is probably a little bit what we talked about with regards to the construction industry and builders not having enough people to do the work that is coming, but then we’ve got not enough places for them to live when they do come. So it’s another associate of mine said they’ve got to come and build it, build their own house. Look, that’s probably the biggest without a doubt right now, I would say that the pressures of the industry in construction prices are also making it difficult to efficiently manage our operations. So not just through lack of resources, but because what happens often with the project work is that it gets so far and then it gets repriced and then we have to look at is the pricing an issue? Will it go ahead or not? Do we have to change it? Do we have to stop? So this year in particular has been characterised by project starting and stopping, starting and stopping being, starting something. So we’ve already low on resources,
But then we’ve got to manage a constant change in our forward workflow around it. And as you know, doing that, it’s not efficient at all. So then we’re adding more costs potentially either more costs just to us absorbing it or more cost to the actual project because of the change and all that. So it’s ironic that higher costs are causing higher costs. Again, it’s like
You to build in more risk in a time where people can’t take more risk to be built in. So it’s a weird one.
That’s right. Yeah. I think I’ve only got two major ones. There’s probably lots of little things,
Fairly common I guess I said to a lots of business owners we deal with and even US Human resources is a massive challenge that I think it comes with it opportunity. But at the same time, like what you said before, Southeast Queensland passionate and we reds want to be the best we can be in Southeast Queensland. I think we’ve got an amazing decade ahead of us, but to your point, can we capitalise on that opportunity is the biggest challenge.
Yeah, I could think of nothing better to look back and say, let’s say four or five years after the Olympics and say, oh, that was an amazing legacy that we’ve benefited a whole region or a whole state potentially for a long period of time.
If anyone wants to find out more about inertia or yourself, Scott, how can they reach you?
Well, there’s the website, ww dot inertia eng.com au or look me up through that.
Awesome, Scott, thanks for coming in. Thank you.