jimmy stice, a real estate entrepreneur who works in t-shirts and shorts, hopes to build small, sustainable houses in kalu yala, the jungle retreat and eco-town he founded in the panamanian rainforest. he already has spent years there developing an institute where college students come to explore and create strategies for alternative energy and farm-to-table food supplies, and experience outdoor living in tents.

raised in missouri, stice is passionate about creating a diverse community that facilitates the spread of innovative ideas.

“the original vision of kalu yala was as much as it is now, really. when we talk about the word sustainability we really meant social sustainability,” says stice, 36. the concept “is really important to me because that’s what my dad taught me.”

the builders of kalu yala, an eco-town in the making located in the heart of the panamanian rainforest, hope to complete the first permanent home this june. a hostel, designed to encourage adventure tourism, also recently opened in the town, in a wave of new initiatives that include expanded research on biofuels, using flies to compost, and other strategies related to environmental sustainability.

“i wanted to try (fly composting) because i knew this would be like an ideal environment for that kind of composting and basically i started a system of successful colonies of larvae,” says jules hart, a biology student during the spring semester at kalu yala. “we can give them all of our food scraps and they can break down almost anything.”

like most kalu yala interns, hart returned home at the end of her 10-week internship and plans to carry on her research at the university of nevada, where she attends college.

when they return home to the u.s. or other parts of the world, alums of kalu yala hope to adapt and apply their new knowledge to their local communities. in their place a new group of interns will continue work on existing projects or start new sustainability initiatives in construction, agriculture, energy, and recreation.

the visibility of large-scale climate change has made sustainability a profitable venture. kalu yala’s business model is capitalizing on the increasingly popular opportunities for environmentalism and ecotourism.

stice, whose father is a real estate developer, grew up in the world of creating, selling, and buying buildings. it’s an arena that is notorious for its negative environmental impacts. combining the two ideas of real estate and sustainability was a key impetus for stice in launching kalu yala.

the young american entrepreneur purchased the land and opened kalu yala in its jungle home in 2011. the town is built in a remote area in the panamanian jungle, accessed only by a treacherous 3-mile hike or car ride. originally cleared as pasture for raising cattle, the area is now home to an academic institute, a coffee shop, and a pub. cattle are still raised on pasture there to provide natural fertilizer, part of the community’s sustainability effort.

kalu yala is a kuna term meaning sacred land and a link that honors the indigenous guna people who maintain traditional ways of life on caribbean islands off the panama mainland where they operate a lucrative tourist business. in contrast, kalu yala is made by design and aspiring to be socially inclusive and environmentally sustainable eco-town, serving as a possible prototype for future town building.

“the idea is to become the world’s most sustainable town,” says tara mclaughlin, president of kalu yala institute, the study abroad program that operates out of kalu yala.

while institute staff and interns are living sustainably compared to the average american, they are doing so near communities that have been in balance with nature for centuries. but it is difficult to envision how such a sustainable city can be scaled up and applied to pre-existing urban areas with skyscrapers, industries, and cars choking the expressways and the atmosphere with carbon dioxide emissions from fossil fuels.

currently, nearly everyone at kalu yala lives and sleeps in tents or hammocks on top of elevated wooden platforms in roofed, open air ranchos. their lifestyles reflect the environmental mission of kalu yala; they use biodegradable products for personal hygiene, their clothes are air dried, and they eat mostly plant-based, farm-to-table local food.

the town boasts that a resident at kalu yala contributes a mere 8% of the carbon footprint of a typical american. while most students interning at kalu yala take international flights to panama, the students later plant trees to offset the carbon emissions of their trips. the current sustainability model that measures environmental impact is focused on carbon emissions but later will expand to include other elements of sustainability such as biodiversity.

as kalu yala begins to scale up with the ultimate goal of creating a town, the models for environmental sustainability and social inclusion will increasingly be put to the test. and their model of sustainability will have to adapt to the construction of permanent homes, the first major step towards town building.

construction, an industry that historically has been damaging to the environment, appears at odds with the town’s light carbon footprint. however, the houses themselves and the broader design of the city here are deliberately planned to align with kalu yala’s mission.

kalu yala’s current goal is the creation of two towns, which will be located within the same land purchased by stice. the less-populated town is situated closer to kalu yala and will house a population of roughly 500 full-time residents according to wes stiner, director of design and construction at kalu yala. the homes of the smaller town will be located on a piece of land that is roughly a half-mile long.

“with the way we are going to line the streets with trees, we’re actually going to be planting more trees than we’re probably going to be cutting,” stiner says. “for every acre we’re building on, there are four surrounding kalu yala that are going to be put into conservation.”

the houses themselves are designed to be environmentally friendly as well. each lot will house two homes, a larger, “charleston” style home and a smaller, “carriage” home. the larger homes will be 1,000-1,500 square feet and the tiny homes will be roughly 500 square feet, with airy floor plans that expand space with a sense of the natural landscape just outside. homes will allow a variety of price ranges.

the houses will be made of a combination of brick and amargo amargo, a petrified wood harvested from the bottom of the panama canal. to prevent construction waste, the needed material inputs have been precisely measured.

the creation of a town also will put increasing pressure on the socially inclusive model that kalu yala has molded as an integral component of their mission. the target intern demographic has been relatively affluent americans who stand in stark contrast to kalu yala’s neighbors in the panamanian community of san miguel. many people farm here but even getting a high school education is a challenge, and one that means long bus rides to schools outside the town. kalu yala isn’t designed to fill that kind of gap, but does hope to offer more english classes in san miguel, a spur for city jobs.

the mission of social inclusion has become “increasingly nuanced,” according to stice.

kalu yala has implemented a few programs to encourage integration with san miguel. they hope to expand collaboration with san miguel more in the future. currently, kalu yala has an afterschool program for kids in san miguel that teaches english and ideas of environmental sustainability, according to mclaughlin.

students interning at the kalu yala institute spend the first portion of orientation week learning about panama and they take spanish classes during their 10 weeks.

prioritizing panamanians and social integration has been too expensive in the past. “it’s more affordable to hire outside (panama),” says mclaughlin, explaining the lack of panamanian instructors at kalu yala institute.

however, kalu yala is making an effort to integrate more of the panamanian community. kalu yala will be offering 15 full scholarships to students from san miguel in january 2019, according to stice.

most interns come now from america, europe, or australia.

“having students found a town that’s based on existing for a mission is basically a way to create a really fast feedback loop that calls you out on your bullshit,” stice says.

while kalu yala stresses social inclusion, it’s hard to shake the neo-colonial overtones that implicate nearly all foreign endeavors coming into less affluent areas. the community of kalu yala remains overwhelmingly white and primarily english speakers, despite its location in the panamanian jungle.

“then socially — and this is the part where kalu yala is still struggling the most — (the question) is who’s being included with the diversity? and then the second part of that will be: are we creating socio-economic mobility in that diversity?” stice says. “we’re a start-up, and we haven’t done them yet, but they’re still a declared part of our mission and we won’t be successful until we fulfill them.”

of the main drivers of sustainability in real estate, the leed certification seems to be the one that has been given the most weight. leed stands for leadership in energy and environmental design and a building can be given a certification of certified, silver, gold, or platinum in ascending order of positive sustainable impact, which is based on an allocated points system out of 100 possible.  the points are given based upon a variety of factors including design innovation, water and energy efficiency, and environmental impact among others.

so why should portfolio managers care what the building owners are doing in regards to sustainability?

as with many things in business, it all comes down to cost. the materiality of these projects undertaken to upgrade to a leed certification level is not small. projects associated with a leed certification can vary from installing more efficient toilets to replacing large hvac units to more efficient models. there is a common misconception that the building owners will bear the weight of these costs, but that’s not typically the case. many times, owners will attempt and pass the projects through to the tenants in their operating costs and this could go unnoticed. now, depending on a company’s lease at that particular location this may or may not be acceptable and can often depend on if the project reduces operating expenses for the tenants of the building. however, if managers don’t realize they’re paying for these projects they can’t determine whether the costs are acceptable or not. hence, why transparency is critical for a corporate real estate portfolio.

with that being said, there is something special about being a tenant in leed-certified building and as a company expands, they should look to locate in leed-certified buildings. in the long run, it is typically less expensive to operate in one of these buildings although the base rent may be a bit more per square foot because they are often nicer. and not too mention that if managers are actively seeking these building, it gives owners more incentive to upgrade to become leed-certified and therefore the push for sustainability in commercial real estate continues!