- September 27, 2016
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Technology continues to change the way the apartment industry does business, how it reaches out to both prospective and existing residents, and how residents live and interact with management and ownership. Whether it's collecting rent payments via the Internet or marketing via social media, the more techno-savvy an owner or operator is, the more successful a community will likely be.
One person who has experience with all things wired and wireless is Donald Davidoff, who spearheaded the development and implementation of Lease Rent OptionsTM, the industry's first automated demand forecasting and price optimization system. After serving as a senior vice president at Archstone for a decade and then executive vice president at Holiday Retirement, he founded D2 Demand Solutions and now works with clients to assess their operational and technology platforms. He recently sat down with us to discuss technology's role in the apartment sector's past present and future. What follows is our chat.
NATIONAL APARTMENT ASSOCIATION: In recent years, what has been the most fundamental way technology has changed the multifamily housing industry?
DONALD DAVIDOFF: The biggest change is that everybody is online now. I hope that doesn't sound too trite. I still remember [earlier in the previous decade], there was all this discussion about online property management systems and what to switch to. The notions of online leasing and resident portals were so far in the future. Now, at least for most large-scale managers, they have some kind of basic online presence -- whether it be a website, the ability to turn in service requests, to pay online, to lease online, etc. I think it's interesting that in 1999 or 2000, Internet listing services didn't really exist. Today, if you go to an industry event and sit in on a panel, people talk about ILSs as "old school marketing." In the span of 15 years, it's gone from being cutting edge to the older way of doing things.
NAA: There has been quite a lot of change in a relatively short period of time, yes?
DD: A lot of people look at the new stuff as if it's going to replace the old. At least on the marketing side, if you really watch the growth of e-commerce, very little has completely replaced what was there before. What today's multifamily operator really has to do is pay attention to a lot more than they had to before. On the one hand, that's really exciting because there is all this opportunity. On the other hand, it's kind of scary because it can be overwhelming. There's just so much more you have to pay attention to.
NAA: In general, apartment residents are younger as a group than homeowners. As such, they are really up on the latest trends and innovations in technology. They're very techno-savvy overall, and I imagine you can reach them with technology better than any demographic. Is that a correct assumption?
DD: Yes. absolutely. The newer generation of renters grew up in the digital age. They're used to multitasking and consuming information in very small bits. We can whine as a society about what that may or may not mean, good or bad. From an operational perspective, you have to grab them with quick snips of information, and you must be available! In the past, if the management office wasn't open, you couldn't really communicate as a resident with the owner. Now, anytime 24/7, you can at least let the owner know what's going on, what's bothering you, or make your payment online. You can visit a property today and then sign the lease at midnight when you're done watching TV or whatever. The availability thanks to technology makes it so much easier for residents than it used to be.
NAA: More and more owners and operators are touting in-unit amenities like granite countertops and stainless steel appliances or community amenities like swimming pools and fitness facilities. What are some technology-related amenities they can tout that will appeal to the 21st century resident and get those apartments filled?
DD: The No. 1 technology amenity is really just having Wi-Fi available easily. People want to be connected. Again, 10 or 15 years ago, there was all this talk about CAT-5 cable. Today, with WiFi, there are other options that are much more flexible and you don't have to worry about the physical plants. I actually caution people not to get too excited about what they can provide residents in terms of technology. Day to day, we're still landlords, right? Nobody is going to view us as a friend. That's not why they are living with us. So, you need to look at what are the basic needs of your residents. Now, you can do some cool things to make the leasing process easier with iPads and tablets. You can make it possible for prospects to take pictures and email it to themselves afterwards. We don't have to create Google Maps. It's already out there. We don't have to build and maintain our own database of restaurants in the area. They can go to Yelp. We just need to make it easier for them to connect.
NAA: Near term, what do you see as the next trend?
DD: The battlefield that I see right now is really around integration. I have more people asking me how to solve the "integration problem." We do have largely a duopoly in terms of property management systems with varying degrees of ease of integrating with that data. But I do think you are going to see operators, particularly the larger ones, demand more and more access to the data so that they will be able to integrate. How the vendors respond, whether third-party upstarts come in with a different approach and actually disrupt that current duopoly -- I think that's something to really watch over the next 12 to 24 months.
NAA: Long term, what technological innovations do you think we'll see, say, 10 years from now?
DD: From an aspiration standpoint, imagine if instead of a key, I get sent some code that I get to enter into a handheld device. I have my Apple Watch and I get to plug some code in. Not only can I then make payments, that code actually unlocks the door when I come in. At the same time, the operator can also track how people use the building so the way the building is structured and how the amenities are put in place are all data-driven from similar buildings we have observed instead of being developers' opinions. Another aspiration? I think many residents will not own a car 10 years from now. They'll belong to a car service. When needed, an autonomously driven car will arrive, and you'll either pay on a use basis or on a monthly subscription. Or maybe that's 15 or 20 years from now. Who knows? Crystal-ball gazing a few years in advance is hard. Ten years is almost impossible!
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