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The Thing About The Internet of Things

The Internet of Things
April 2018

Should residents or management control the smart-home ecosystem?

The Internet of Things (IoT) is commonly defined as a network of physical objects embedded with electronics and connected to a network that stores and exchanges data. In other words, the IoT connects devices having an on/off switch to the Internet and to each other. But to fully understand how IoT applies to rental housing communities, one first must be able to distinguish between Facilities IoT and Apartment IoT.

Facilities IoT refers to the devices for which a community’s management team is responsible, either directly or through a third-party vendor. Examples of Facilities IoT include hot-water heaters, condensers, leak detection and package systems. Today, the largest and most common Facilities IoT systems are access-control and closed-circuit television (CCTV) systems. Building management systems controlling centralized HVAC systems and smart-metering systems also fit in the Facilities IoT category.

Unfortunately, the lack of intelligence in edge devices limits Facilities IoT today. A low-cost, barely code-compliant apartment air handler is neither smart nor connected. However, the potential savings from preventive maintenance alone renders intelligent-edge devices and community-wide IoT inevitable.

Apartment IoT, or “smart apartment,” refers to devices within an apartment that are predominately used by the residents. Examples of smart-apartment technology include thermostats, lights, door locks, TVs and voice assistants. Obviously, some of these items are installed and supported by the community and others are bought by the resident(s). However, the number and scale of devices included in a vacant apartment differ across the rental housing industry. 

In particular, furnished and unfurnished apartments present completely different challenges for a community. In a furnished apartment, the majority of smart apartment devices will be owned and supported by the community. In unfurnished apartments, the resident will provide the majority of these IoT devices.

Many believe that smart-apartment technology will have a similar trajectory to most apartment industry solutions. At least initially, some verticals or types of rental housing will lean toward decentralized single-family solutions and others will more closely follow centralized commercial solutions. While distinction between these two strategies is critical, the terminology is admittedly clumsy, and some solutions are already trying to span both strategies.

Single-Family Solutions

Single-family solutions include the nascent IoT ecosystems being deployed by Apple Homekit, Amazon Alexa, Google Home, Samsung Smart Things and others. Typically, the owner connects the hub, the in-unit smart devices and his or her own consumer electronics to the Internet and then each to the hub via the app.

Management sometimes provides a hub as a move-in gift or allows the resident to bring their own. Management usually assists with connecting the in-unit smart devices included in the apartment to the Internet and the hub. However, the resident is responsible for troubleshooting either the Internet or hub connection for the additional smart devices they bring with them.

Commercial Solutions

Commercial solutions are the more centralized products regularly controlled by a supplier partner that provides a hub in each apartment home and an app to management and residents. The methodology and infrastructure are virtually the same as the Facilities IoT system; in fact, they often are the same system. 

Stratis, Epproach and Dwello are three of the early leaders of this nascent industry, but there are at least a dozen other such providers. Similar to the single-family approach, various smart devices are managed via an in-unit hub. However, the hub and smart devices are connected to the Internet and each other prior to move-in and the supplier partner manages the overall system. Thus, the hub and the smart devices are up and running as soon as the resident downloads the app. Also, the community can access this system to control vacant apartments and even communicate with residents through a voice assistant such as an Amazon Echo.

If we were only concerned about the smart devices included in a vacant apartment, we would never consider a single-family approach. A commercial solution delivers the smart apartment experience – possibly before a resident even opens their door for the first time (if they have downloaded the app).

However, residents tend to bring a lot of their own smart devices. Millennials in off-campus housing commonly have as many as 10 devices in furnished apartments. What happens when the resident moves into a vacant apartment with an entire ecosystem of smart devices and consumer electronics? What happens when a resident wants to use an Apple Homekit-compatible smart light socket, a Google Home voice assistant, a Nest camera and/or a Samsung Smart Things hub? While the commercial centralized approach allows for easier set-up and additional functionality for management, it is inflexible and only supports a limited number of resident smart devices.

Admittedly, the distinctions between single-family and commercial smart apartment strategies will likely become meaningless (again, these are awkward terms. If you can think of better ones, please send them to me). However, for now, however, there are distinct strategies. And again, the strategies will vary across rental housing types. More than any other factor, the best strategy is likely determined by whomever has the majority of the smart devices in the unit – whether it be the community or its residents.

Luxury-apartment communities in the United States are essentially attractive, mostly-empty boxes in which residents bring the majority of the connected devices they intend to use. Other than rental houses, no other rental market more resembles single-family homes. Thus, we recommend a single-family solution for luxury rental housing. We recommend that operators should ensure that the few devices the community installs in an unfurnished apartment are easy to integrate with whichever technology ecosystem the resident brings. Unlike a commercial, centrally controlled system, the community is not limited to a single smart apartment solution. While there may be one default set-up that favors Apple Homekit or Samsung Smart Things, the goal is to enable a smart, luxury apartment for each resident’s technological ecosystem.

Most notably, this strategy clearly places the responsibility for connecting the various consumer electronics brought into a luxury apartment on the resident. Notably, dimmers, fans, controls and thermostats are durable goods that have relatively long lifespans compared to consumer electronics. Consumer electronics are ephemeral with lifespans that seldom exceed a 12-month lease.

Thus, consumer electronics such as voice assistants should only be provided by a community as move-in gifts. Lastly, the battle for control of the smart home and smart apartment will be brutal. It seems like a new vendor or technology appears every day. As with any emerging technology, some will succeed and many will fade away.

Faced with an uncertain future, it is only reasonable for owners to hedge their bets by focusing on items intrinsic to a vacant luxury apartment with a flexible solution that makes room for multiple technological ecosystems.

If a community pursues a centralized commercial strategy—and we expect many senior housing and student living communities will—we similarly recommend using apartment devices that will work for multiple vendors and technological ecosystems.

Door Locks

Apartment door locks are a key part of any residential IoT strategy. Beyond the convenience and lifestyle value they deliver on their own, full-building access systems can unlock a variety of other revenue-generating services and amenities, including unattended unit showings, in-unit personal services, package delivery and short-stay rentals. New and existing supplier partners are working to deliver seamless upsell experiences that expand the revenue potential of rental communities and transform the industry.

The initial question is whether access systems are part of a centralized commercial facilities or decentralized single-family apartment IoT strategy. As noted, in the future, it is likely the difference will be meaningless because some devices may move between facilities and apartment IoT or simultaneously be parts of both. However, these are just the first steps for smart apartments and operators must choose a direction.

Many vendors are quick to advocate the utility of a resident being able to coordinate the opening of an apartment door along with lighting, HVAC and other devices. However, this fails to recognize one critical difference between single-family and rental housing: Apartment doors seldom open to a public street and are almost always behind one or two access-controlled doors and increasingly an access-controlled elevator.

Put simply, what good is it to open an apartment door for a grocery delivery if the delivery person cannot get into the building and/or up the elevator? It is because of this need for a full-building access solution and the ever-growing challenge of on-demand deliveries and services (deliveries made same-day or within a couple of hours along and services such as dog-walking or pet care) that require us to recommend solutions that first coordinate the individual apartment doors with the overall access-control system rather than an apartment’s thermostats and lights.

The first access-control systems that are complete rental housing solutions – controlled apartment doors, building and amenity access, controlled parking and guest access — become available this year. These systems have multi-technology readers that allow residents to use a personal credential or their smart phones (local

Bluetooth handshake as a resident approaches a door) at any access reader and apartment door lock.

These same readers will also accept a time-limited numeric code or other limited-use credential that can be shared with guests, on-demand deliveries and service professionals. They can use the limited-use credentials to access the building, the elevator and, if the resident chooses, the individual’s apartment door. Competing upgrades and other solutions are expected to become available soon.

If a community decides to pursue a single-family smart-apartment strategy, it needs to carefully verify code compliance before purchasing locks. Only a couple of the Zigbee and Z-wave locks prevalent in single-family housing have been tested for a fire rating. Doors, door locks and frames are tested by Underwriters Laboratory and given a fire-resistance rating. Fire-resistance ratings indicate the amount of time the component is expected to provide protection when exposed to fire. 

Only two single-family locks have 22-minute ratings; one supplier promises a 90-minute lock this year. Put very simply, most apartment buildings require at least a 22-minute fire rating and denser, taller buildings require at least 90-minute ratings. Moreover, some jurisdictions require a fire key in the Knox-Box that unlocks all apartment doors. Hence, we do not recommend apartment door locks that cannot be opened by key or credential. 

Moreover, an increasing number of jurisdictions outside of Texas require single-action egress via an interconnected or mortise lock instead of a deadbolt and separate handle.

Henry Pye is Vice President of Resident Technology Services at RealPage.