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Hubville – a Financially Independent Project

The 150,000 household city of Hubville is small enough to have all the facilities within walking distance and of sufficient size to provide complete services. According to the Swedish National Board of Housing, Building and Planning Sweden, there is a need for 700,000 new homes by 2025.

building-a-house

Housing revenue and investment for transportation

Revenues from housing

In a city with 150,000 apartments and houses, the average housing area should be 75 m², adding up to a total of 11.2 Million square metres of housing area.

It is reasonable to have a 20,000 SEK/m² profit margin.
Total profit: 225 Billion SEK

Not calculated revenues

There will also be profits from offices and other commercial areas.

Profits from domestic travel is not calculatd, and it is dependent on the connection to an international network.

More: Revenues from apartments

The construction industry reports that the construction cost for an apartment in Sweden is approximately 29,500 SEK m². This cost should be possible to lower substantially. The cost hides corporate overheads, and Swedish construction companies have been criticised for lack of efficiency. In Sweden, although building regulations are tough, it is possible to build an ordinary villa in loose timber for less than 20,000 SEK/m², and according to building forums, it should be possible to build a lot cheaper, maintaining a high quality. The square metre cost, when building one villa, should be higher than when building a full apartment building. And building a whole city should provide cost reductions on scale. It should be possible to build apartments buildings in bulk, mainly using pre-fabricated elements (in wood) for 15-17,000 SEK per m².

What the residents pays

When a construction company sells condominiums, the apartment buyers usually collectively pay one part of the apartment, the other part is paid by the tenant. For instance, for an apartment house sold for 50 Million SEK, 35 Million is paid by the buyers, and 15 Million is paid by the tenant, which is all the buyers as a group.

Assume the tenant loans 8,000 SEK/m², which equals 600,000 SEK for a 75 m² apartment. Based on a 5% interest rate, the monthly fee would be 2,500 SEK, and based on a 3% interest rate it would be 1,500 SEK. With a total square metre price of 40,000 SEK, the price for the apartment buyer would be 32,000 SEK per square metre.

A rented apartment, based on 40,000 SEK per square meter and 75 m², would, based on a 5% interest rate; equal a monthly rent of 12 500 SEK. Based on a 3% interest, the monthly rent would be 7,500 SEK. Maintenance costs need to be added to the monthly fee.

Note: common areas like laundry room, hallways, stairways, lifts, and the entrance is included in the calculation, since it is included in the 29,500 SEK m², mentioned above.

Investment in domestic transportation

A Hyperloop or maglev connection between Hubville, Stockholm, Gothenburg and Malmo is estimated to 1,000 kilometres in total length.

With a cost of 300 Million SEK per kilometre (2-ways), the total investment is 300 Billion SEK.

Land purchase

The 150,000 household Hubville should have plenty of green areas and be surrounded with recreational areas for hiking, fishing and relaxation. The total need of land is 30-50 km² (= 11-19 square miles).

The price of Swedish pasture land is roughly 26,000 SEK per hectare. In comparison, Sodermalm in Stockholm has a land area of 5,7 km² and approximately 150,000 inhabitants.

Purchase of land: 90-150 Million SEK.

The international transportation network

Revenues

Tourism and business travel combined is estimated to an average of one annual roundtrip per Swedish resident. The population of Sweden is 10 Million. The calculation is based on an average roundtrip profit of 4,000 SEK.

Annual profits: 40 Billion SEK (excl. depreciation)

More: Annual profits

The cost for vactrain maintenance is low, and energy usage is very low. Thus, a 4.000 SEK round trip profit is reasonable.

The 10 Million annual trips is based on Hubville being connected to Stockholm, Gothenburg and Malmo.

In some parts of the world, for instance in Central Asia, distances are long and the population would spend less on travel. In those areas, these calculations are not applicable. Thus, it is reasonable that profits from i.e. European and US Hubvilles are distributed to those countries, in order to make the vactrain network financially feasible everywhere. Calculations are based on revenues being distributed to the country from which a roundtrip started.

Consequently, all revenues from Swedish travellers are distributed to HubvilleSwe, and there are no revenues for HubvilleSwe for non Swedish travelers visiting Sweden.

In a scenario with a 100-150 Billion SEK investment, if the investment interest is set to 2-3%, then 4-6 Billion SEK in annual earnings would be sufficient to obtain ROI.

More: Domestic and international vactrains

The cost for the domestic vactrain is based on Hyperloop’s calculations. The Hyperloop runs in a tunnel which will not enable passengers to walk in the train. The domestic vactrain would probably run at speeds of 1,200 km/h

A person traveling distances exceeding 1 hour probably want to be able to stand up and walk in the train. Then it could have toiletts and perhaps a small restaurant. Such a train would need a larger tunnel.

Perhaps, if the international connection from Sweden is through Denmark, then it is probably better that the domestic tunnel from Hubville to Malmo (near Denmak) has international tunnel dimensions (it should be possible to find a technical solution to fit a domestic train in an international tunnel)

The international vactrain could theoretically move in speeds up to 8,000 km/hour, but is more probable to move at speeds up to 2,500 km/hour

Investment in international transportation

The international vactrain network runs at a higher cost than the domestic, since it is faster and more spacious; the tunnel diametre is bigger. (If maglevs are used, the domestic and the international km cost are equal)

The international vactrain is estimated to 350 Million SEK per kilometre, with a total length of 500-600 kilometers (Denmark or Germany).

Total investment: 175–210 Billion SEK

More: Vactrain challenges

Vactrains challenges can be divided into three areas: technology, cost, and safety,

Technology

The most common arguments is whether it is possible to maintain a several hundreds or thousands of kilometres long tunnel at near vacuum pressure? There have been no tests conducted in tunnels of that length, but it is possible to calculate, and it does not seem to be one of the top challenges. Another related vacuum topic is the outside pressure on the tunnels. This also is possible to calculate, and it would not be a problem. Note that there have been submarines 10,000 metres below sea level, where the pressure is 100 times higher than the pressure would be on the vacuum tunnels.

Cost

The cost for building a vactrain network has been calculated by Swedish accounting firm KPMG, as well as by the Hyperloop consortium. The calculations should be treated cautiously due to bias, and there are critics saying that the cost would be higher.

However, the Hubville suggested solution with a network of new sustainable cities connected internationally, has not been included in any other calculations. So, an independent thorough calculation should be made to calculate the costs. But in that calculation it is important to also include all the profits from building a globally connected city.

Security

There are those saying terrorists might attack a vactrain network from the outside or a person bringing explosives into a vactrain. Assuming terrorists would aim to create as much destruction as possible, they would want to impose fear through a large number of casualties, and to paralyse the transportation system. However, the fatalities from an attack on a vactrain network would be several times lower than attacking a regular train, and even less than attacking an airplane. Regarding paralysing the transportation system, it should be possible to develop techniques to repair a damaged vactrain pipe in a very short time period.

Non estimated costs

In these calculations there are no costs for land owner compensation for the intrusion of vactrain tunnels on private property. If possible, vactrain tunnels are placed a few meters above the current railway system.

However, a vactrain reaching speeds exceeding 1 000 km/hour need a straight track in order to minimize G-forces on passengers, which at some places can make the current railway system inappropriate.

All calculations above only serve to illustrate the underlying principles of financing Hubville.

vac

Sources and further reading

The cost for a vactrain network varies. According to a KPMG study (link below), the kilometer cost would be around 280 Million SEK. According the Hyperloop video and other sources (i.e. the link below), the kilometer cost would be around 100 Million SEK. Perhaps the KPMG study is a more complete study, but on the other hand, maybe the route on which the KPMG study is based, is complex. Thus, the cost in these Hubville calculations is set to 300 Million SEK/km for the domestic vactrain network, and 350 Million SEK/km for the international.

Transatlantic tunnel, approach and cost.
The cost to build a vactrain on land, is substantially cheaper, than a transatlantic tunnel.
http://www.industrytap.com/transatlantic-meglev-train-would-be-largest-project-in-human-history/16108

KPMG study
A pre-feasibility study Stockholm – Helsinki using Hyperloop vactrain
https://assets.kpmg.com/content/dam/kpmg/pdf/2016/07/se-fs-links-pre-feasibility-study.pdf

Global market for smart cities
http://www.industrytap.com/global-smart-cities-market-reach-2-trillion-2020/27313

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