By Michelle Landers
In less than ten years, Airbnb, Uber, and Lyft have changed the way we travel across town and around the world. These young firms have harnessed disruption as a key driver in technology innovation. Whether viewed through the lens of the gig economy or the sharing economy, these technologies have allowed individuals to monetize their homes and vehicles in ways unimaginable to most people not too long ago.
Coined in 1997 by Clayton Christensen of Harvard Business School, the term disruptive technology can apply to everything from the telephone to the personal computer. These products changed the way we communicate and eventually pushed aside telegrams and typewriters. Disruptive technology is already impacting real estate. Airbnb is now valued at $10 billion, more than well-established brands like Hyatt. And other tech companies are looking at ways to further disrupt the real estate industry, which has typically been reluctant to adopt new technology.
Zillow entered the world of residential real estate in 2006, initially partnering with local newspapers. The site ultimately bypassed the newsprint relationship, disrupting residential real estate advertising. Companies like VTS, which has entered the commercial leasing space, and Comfy, which allows tenants adjust heating and air conditioning to their individual preferences, are nibbling at the edge of commercial real estate. At this point, though, few technologies have been able to truly disrupt the built environment with regard to core issues like zoning, land cost, and construction.
Some promising technologies are emerging. Co-Urbanize, a mobile platform, allows abutters and community members to submit statements in support of, or in opposition to a project without attending meetings in person. Such technology can broaden the audience and create conversations in real time, rather than over the course of many in-person meetings, saving time and fast-tracking project approvals.
The MIT Media Lab is helping designers test different scenarios using virtual reality. The City Scope project helps planners and city leaders test different land usage patterns and learn how different zoning scenarios affect traffic, public health, open space, and economic development. The technology enables the creation of many different scenarios in a fraction of the time previously required and gives community leaders better vision with which to make future zoning decisions.
Another potentially disruptive technology for the real estate industry is 3D printing, which could significantly lower the cost of time, materials and labor. If 3D printing could be used on a mass scale to create stable, secure components, construction could be streamlined. Yet, as we have seen with the explosion of online shopping, technology that improves one process can have unintended consequences for another. Shopping malls are dying as legacy retailers like Sears and JC Penney struggle for relevance while shoppers buy online. What impact would 3D printing capable of manufacturing buildings and rooms have on labor unions and building contractors?
The ripples of advancing technology are already being felt in real estate. It is the hope that the same tools which have changed the playing field in hospitality and transportation, will solve the challenges of the built environment, allowing for smarter growth, better traffic management and more housing for the middle class.
Real estate firms need to be on the lookout for new technology and resist doing the things the way they have always been done. Innovative firms that adjust to a disruptive environment will be the winners in an ever increasing technological landscape.
Michelle Landers is executive director of ULI Boston/New England