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Open AccessArticle

Is Smart Housing a Good Deal? An Answer Based on Monte Carlo Net Present Value Analysis

1
Housing and Building National Research Center, Architecture and Housing Research Institute, Cairo 11511, Egypt
2
School of Land Planning and Regional Development, Planning and Development Research Center, Leadership Teaching Chair in Economic Regional Development, Laval University, Quebec, QC G1V 0A6, Canada
*
Author to whom correspondence should be addressed.
Sustainability 2019, 11(15), 4193; https://doi.org/10.3390/su11154193
Received: 28 June 2019 / Revised: 27 July 2019 / Accepted: 29 July 2019 / Published: 2 August 2019
(This article belongs to the Collection Sustainable Smart Cities and Villages)
The smart cities are considered to be an engine of economic and social growth. Most countries started to convert their existing cities into smart cities or construct new smart cities in order to improve the quality of life of their inhabitants. However, the problem that facing those countries while applying the concept of smart cities is the costs, especially for the residential sector. Despite the high initial and even operation costs for adopting different technologies in smart housing; the benefits could exceed those costs within the lifespan of the project. This article is shedding the light on the economics of smart housing. This study aims to evaluate the net present value (NPV) of a smart economic housing model to check the viability and feasibility of such projects. The calculation of the NPV based on Monte Carlo simulation provides an interesting methodological framework to evaluate the robustness of the results as well as providing a simple way to test for statistical significance of the results. This analysis helps to evaluate the potential profitability of smart housing solutions. The research ends up by proving the feasibility of this type of project. View Full-Text
Keywords: smart cities; smart housing; cost and benefits; net present value; Monte Carlo simulation; smart meters smart cities; smart housing; cost and benefits; net present value; Monte Carlo simulation; smart meters
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Elariane, S.A.; Dubé, J. Is Smart Housing a Good Deal? An Answer Based on Monte Carlo Net Present Value Analysis. Sustainability 2019, 11, 4193.

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