This year there’s been some chatter about CREtech reaching market saturation and with that a lot of buyer confusion among decision...
Real Estate Zen
People are resistant to change and once change is adopted, they swear to never change again.Anthony
I haven’t had an original thought in years; this post was inspired by Breaking Smart.
People are resistant to change and once change is adopted, people swear they will never change again. It’s understandable. To adopt new technology is to admit you aren’t any good at something, possibly incompetent, or at least technology can do it better. We often think of technology as separate from ourselves, as something you don’t have a relationship with, it does its job and your life goes on.
Cars at one point represented freedom, the open road offered vast opportunities for suburban developers. Today the definition of freedom for young urbanites is a carless lifestyle, heavily reliant on ridesharing. Ownership of a car is considered nonessential and even prohibitive. Once a network of self-driving cars is created, car ownership will be unplugged entirely. To get from A to B, we no longer have a relationship with our car but a smartphone. On demand anything is not a generational gap or fad and is here to stay.
As you probably have heard, WeWork is creating co-living communities to extend their brand to apartments. For traditional real estate professionals it’s easily dismissible; it’s what every other developer is trying do. Make a buck developing and leasing space. Perhaps you’re right and time will tell but I believe they may be on to something…
It’s well known that the experience economy is flourishing. What’s less well known is that people want flexibility even in what is usually considered long term. WeLive will likely offer a membership for living a lifestyle as they do now with WeWork spaces. As a member of their residential community, I can go anywhere I please, unbounded my changing needs and geographies. If I want to try out the Bay Area, I can just move to the Market Street community, no key money, no new lease, no moving furniture. A couple years later, I fall in love and decide to start a family, now I move to the WeLive Palo Alto community just by booking on my smartphone. The relationship isn’t with my dwelling but with technology.
It won’t be too long before the copycats nip WeLive’s heels. Equity Residential could get on this trend early and turn itself into an innovator but that is unlikely, as traditionalists prefer the status quo. Before we get amped up to scale this idea; let’s stop for a second and think if we should. Uber doesn’t own cars and Airbnb doesn’t own rooms. As I said earlier, WeWork is on to something but not entirely.
In true hacker ethos we should seek to create the greatest societal change with the least amount of resources. Software managing a network of long term apartments for residents to move about with as little friction as possible is a much more zenful approach. My space needs will inevitably change, as will my relationships, and as it does, my space will become fluid.
The benefits are clear for the customers. What about for the property owners? Well just as Handy cleans Airbnb rooms, property management companies at scale will manage apartments in the network. The network handles rent collection and credit risk, the landlord can be absentee in a good way. Perhaps offering a zenful experience for the landlord.
What about cities? The network will guarantee property upkeep and property tax through asset diversification. A vast network will have diverse income streams something a small landlord will not.
Of course there will be those that are resistant to change; people well above my pay grade outline Airbnb and Uber’s growing pains very well. I can see it now, housing departments, unions, and real estate brokers – all very pissed off. People often get mad when there is an intrusion on their reality.
Change may not become evident for many iterations but hacker ethos always finds a way. In the mean time, rethink your relationships.