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How Will Real Estate Development Reshape Housing?

Dec 5, 202414 min read

Updated: Dec 11, 2024

A view of an apartment complex or similar with a small green patch of lawn, this seems to be a design mockup.
Source: Hines

Enjoy this episode from the archives.


In this episode we explore three emerging trends in real estate development: A multi-generational housing complex in Berlin, China's pre-construction crisis affecting millions of homebuyers, and how digital twin technology is revolutionizing property management. Join us as we examine the future of residential development, community design, and the growing tension between technological efficiency and human-centered living spaces. 





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Episode Transcript:

Sue: Hello everyone, it’s Sue here. Happy holidays! We are in the middle of planning some exciting things for the new year, so for now, here's an episode from our archives from earlier this year. Thanks for listening and we hope you enjoy!


Raakhee: Welcome to Signal Shift, by Horizon Shift Lab. We're your hosts, Lana Price, Raakhee Natha, and Sue Chi. Each episode, we explore the latest signals in technology, culture, and society, uncovering insights that will impact our daily lives in the future. Join us as we shift perspectives, explore possibilities, and delve into real changes in our world. Curious to learn more? Go to horizonshiftlab.com.


[0:56]


Hello and welcome to Signal Shift. I'm Raakhee Natha. I'm joined by the fabulous Sue Chi and Lana Price. And today we're talking about the real estate industry.


Truly prompted to look into this realm by the $418 million settlement that was announced by the National Association of Realtors, which many in the industry have touted as the beginning of ushering in major changes in the industry. You know, the settlement for starts will change and lower commissions in the United States. The commissions that are made on homes quite massively. And that's going to help reduce home prices, which I think everyone is rooting for. 


But what one wonders is, does such an association even need to exist? And will it even in the future? And just what's going to happen to this industry and how it works? You know, it's not just this one event, but real estate buying and selling seems to operate very archaically in the United States. In terms of the process itself and the legalities and the kind of paperwork that needs to be done. So there's massive room for revolutionizing this industry. So let's see what signals managed to pique our interest today. And yeah, wants to go first.


[2:18]


Lana: I will go first. You know, I guess one of my interests is multi-generational living. And I know that's something that is making a comeback, not only in the US, but globally, like also in the UK and in Australia and across Europe. And another interest of mine is co-living, like different co-living communities. 


And so the signal that I found related to real estate was actually about multi-generational living communities. So, you know, you might think of a multi-generational home as still a single family home, where a family, a nuclear family might live with like their grandparents. 


But this is actually an apartment complex in Berlin, but it was built for, they say that it's for residents from zero to 100. It is a multi-generational, multi-family development. So they have like micro units for students, spacious flats for families, and then also included like specialized senior living spaces. It's a number of buildings that are all together. So there's like a variety of different types of apartments within this apartment complex.


But also a lot of communal spaces that are very, more to foster like this multi-generational socializing, you know. So there's like an urban gardening center. There's like fitness and recreational gym that has different types of equipment for all ages. There's a library. There's also practical amenities like a post office station and a bicycle repair shop and a co-working center. So anyway, I thought that conceptually the idea was pretty exciting, you know, to think about a very intentional design like this.


But the thing that I think is really funny is that as I was researching this, I was looking at the Google reviews, and their reviews are awful. There's like one star reviews, so many, and the complaints are about the management company. Like the management company is very unresponsive, you know, they overcharge on the utilities and then took six months to like pay it back, or like the rent keeps increasing or they don't answer their phone or they promise certain things but then they don't deliver it for over a year. 


You know, I think it just to me goes to show especially in our field where we're interested in creative solutions and design, but at the end of the day, too, it needs to be properly managed and run, right, like the implementation is just as important as the idea itself.


So anyway, so I think in terms of real estate because of all of what we're seeing right now because there's not enough housing stock, it's very unaffordable. We have so many young people living with their parents, still young even like into their 20s and 30s still living at home, you know, all of this pressure that's in the real estate industry in addition to you know, social isolation and the cost of elder care, the cost of childcare. I think we're seeing kind of this confluence of like how to solve a lot of these problems at once.


[5:56]


Sue: Lana, it did remind me there's something I learned about this kind of concept called 15-minute cities. Have you heard of that? 


Lana: Yes. Yeah. 


Sue: One of the questions we always had was, well, who's going to decide? And even if a local municipality tries to say and declare we're going to do a 15 minute city in this neighborhood, which is, you know, can you walk to basically everything that you need within 15 minutes or bike? It's still so hard because then you have to change zoning laws. You have to work with the developers. You have to think about people who already own the land or the property there and what might be re-envisioned in a lot of different types of community meetings. 


You know, one alternative here I'm seeing from the signal you brought is ultimately one management company can do that within the property that they're developing. But to your point, how well can they actually execute it for everyone involved? It's almost like that mini micro city without the electives that you have there.


Raakhee: Yeah. That's so interesting. I haven't heard of the 15 minute city, that sounds lovely. I think they're trying to do that in our neighborhood very slowly, but we'll know in a few years. But I think they're trying to revitalize it in that sort of direction, you know, making it more walkable, more bikeable, more restaurants, markets, that sort of thing. Less kind of suburban, you know, all these houses kind of separated. So I think, yeah, I think the multi-generational sort of home solution, I think it's a great solution. I don't know how many other solutions we do have.


What I do wonder about, this is very interesting, right, in some places like, I think it's in South Korea, this is few months back, people were getting more adamant about separating those with children and like in restaurants, not just on airplanes and restaurants and everywhere, there's a real drive of like, no kids spaces. And I just wonder, and some of the properties in a place like LA are very lifestyle-driven. So it's about, you know, it's the right restaurants and the gyms and they put it all in one location, but you really have to want that singular lifestyle to live in that kind of, you know, sort of complex or whatever. And I wonder about the interplay between that and creating spaces that are about being multi-generational, but also diverse in culture and language and all of that. Like, are we trying to come together in the right kind of ways or are we trying to come together but separate, if that makes any sense?


Lana: I think that totally makes sense. I mean, I was, I actually had found a different signal, it’s from Sweden, that it was not a multi-generational community, but it was one where there were seniors and it was a municipality-owned, so like a city-owned building where they were housing seniors. They also had some space and they had a lot of migrants and refugees who were younger. And so they decided to also use some of that space for these younger refugees and then see, like, if there is going to be some, you know, interactions, like, intergenerational relationships. 


But I think one of the interesting things about that is that they chose it because of the different cultural background, like, that people were coming from different cultures, and so they wanted to kind of try to create that dynamic intentionally by choosing people who are very different in age and different in culture and different, you know, in other ways and to see if a community can build that way.


So, yeah, it's, I think you pose a really provocative question, which is, like, would people choose that themselves or would they intentionally choose, like, to be more with a community that they feel that they belong in and are more, like...


Sue: I feel like I'm living a little bit of that choice here, unintentionally, right, because part of the law, like, a real estate agent cannot describe to you, right, what the demographics are of, like, a particular place, for good reason. But the place I moved into here is one of the newest areas, because housing has been in such a state of crisis where I live, there's just no new stock for housing. 


And so because of it, we wound up in a community that is multi-generational and diverse because the way they've built the houses is that there are units that are smaller for singles, young people, young families, and then there are a set of other houses that are only one floor or max two floors that are essentially for older families, retirees. 


And so what you're seeing are families moving to essentially different sections of this tiny neighborhood where you have the parents or the grandparents in one section, and then you've got the younger families across the street, essentially. And it's been nice because everyone is new. We've had to create a culture from scratch, which at least in my tiny, tiny section has turned out to be wonderful and surprising just to see what, you know, who are the different families who are coming from out of the country, out of the state, also from Michigan, right? And so that's been great. 


And so, you know, how do you, as a developer, I think the question then is how are you going to gauge some of these trends in the city to really develop something that hopefully will get more than one star on Google reviews?


Raakhee: Oh, yeah. That's beautiful. Sue, I think that an example of it coming together and working really well. Yeah. The Google one star, that's interesting, but I think, Lana, like you said, it was just shows how important management, and it's like even the city's intentions and how they're going to create these cities, these developments, the rules we set up, that intentionality behind design and the importance of it becomes so clear in what we're hearing. 


[12:28]


Sue, what was, what was your signal?


Sue: So my signal was based on just my own personal experience, again, coming into this new community. It was a new construction built by a developer we'd never heard of before. We definitely had a level of anxiety, especially during the pandemic when supply chain was an issue and some materials were severely delayed. We weren't, you know, there was just reports, oh, are they going to finish or not? And so we just got really nervous. Every week we would come here to see, are they building it, are they doing something?


So anyway, so based on that, I had seen in the news, the crazy housing crisis that's going on, or I would say more real estate crisis that's going on in China. There was a really compelling short documentary by Wall Street Journal, and I think a lot of other outlets have also reported on this, just about the sheer scale of the real estate crisis in China. 


So there are, at least of their reporting, there were over 20 million pre-bought units that were not finished. The way that it worked in China was that a lot of, you know, there's a lot of creditors and investors, obviously, going into these properties, but also a lot of households who had put in deposits, who had forked over their life savings, taken out money from their retirement to buy their kids a home and whatnot, and they're still just in limbo. They don't know if or when they'll either be paid back for their deposit, or if their place is ever going to be built. 


And so in the long line of people that need to get paid back, I'm not actually clear where they stand compared to some of the actual investors and creditors and liquidators. 

So all that being said, it just brought home just, you know, this tiny level comparatively of my anxiety over whether or not we would have this place versus what they're going through and how they could have seen it. And so for me, that was just a signal, understanding, you know, what is happening to the economy in China. But I think more importantly for me, I really wanted to hear the stories of the families that were impacted and what they were going to do next.


Lana: Yeah, Raakhee, I'm really intrigued about your signal and just how we, how we'll tie all of this together in terms of, you know, what you're saying about the industry of brokers. So very curious to hear.


[14:56]


Raakhee: Good question. Good question, Lana. I don't know. Let's see. How does it all tie together? I'll say this much. It does relate really beautifully to your signal and the issue that came out of your signal, which is around the management of property. And I think, I think Sue, it relates to, I think something you raised around, yeah, just, I think some of our fears and anxieties when like a property is being developed, et cetera, and all those things. 


But a few things that have happened that I've observed as was one, our property also has been taken over by sort of new ownership. And one of the first things that we noticed again was how they rebranded in a very sort of centralized way with all their buildings. And most importantly, that meaning cutting down the staff. So we don't literally have anybody now in the leasing office, et cetera. It's in the main building. And so, you know, maybe seven or eight jobs were cut down to like one or two. And that's happening across the board with these sort of properties. But it's working more efficiently. That's the reality is that the systems are better, the technologies, it's easier to put in work requests, you know, as a consumer, I can't complain.


I think what I discovered, which I found so interesting, which is a very big trend in commercial real estate and just in the backing of real estate, it's not a word we would have typically heard, but the concept and Lana, this comes from something we spoke about from your end as well.

But this is a digital twin for buildings. Apparently, the technology in that is so, so brilliant and so smart in that it really is almost like this living existing version, the digital version of buildings, of houses, of properties. 


Which if you think about it, it preempts maintenance issues. It tells you how people living in a home are responding to the building. It's telling you everything you're doing and how it's working or not. But I think what I found really interesting for me, I was like, not only yeah, we're going to see a change in less realtors, not only are we going to see a change only in, you know, less jobs around leasing agents and, you know, those sorts of things of property managers, right? All of that kind of being streamlined, but skills that we like, okay, a plumber, maintenance workers, they're always going to be in demand. It's in fact the thing you turn to, right, when you have nothing else you turn to skill.


But I feel this is really interesting because even that's being streamlined now, and it just shows the power of AI and just how deeply it's going to impact something like the real estate industry. 

When it comes to managing properties, it's going to be amazing because I think these digital twins are really going to help people keep in touch with what's happening, what are the issues, how do we prevent them, and how do we build better and how are people using this space.


Some of the data they can use will actually show which rooms are being occupied more, right? How is temperature flowing, all those things, how do we even, you know, ensure more sort of, you know, better sort of sustainability in buildings, et cetera, and working better with the climate. 

So in all senses, it's going to work much more effectively, but I think it really changes so much of how we've managed and worked with buildings and how we lease and how we interact with buildings and managers. And I do have big questions around the people side of all of this, but maybe the community side will come from the people who, again, who are living in the building and it's less about talking to your leasing agent or the maintenance person, but you're really going to get to know your neighbors again, and you're really going to, you know, stay more with family members and that sort of thing. I wonder. I wonder.


[18:47]


Lana: That's super interesting. I mean, I think two things come up when I think about this. 

I mean, there's always the double-edged sword of like a privacy concern, right? Like if you have all, I'm assuming the data that they're collecting for the digital version of the building is like sensors, right? Like if they know which rooms are being occupied, you know, kind of a lot of things that maybe I don't know, so you would know, for example, like if an apartment is vacant or people might be doing certain activities in their home that they might not want others to know that they're doing. 


So I think there's like, oh, there's always going to be that side to it. 


And I guess, yeah, you know, the other thing when you were talking about, you know, plumbers or maintenance people being streamlined. And as I was thinking about that, you know, I do know from, you know, working for organizations that own property, you know, a lot of it is in preventative maintenance. So I can see that, yeah, like if you have a person who's a half-time or full-time person who their primary job is to anticipate problems before they happen, then I can see that when you have like the internet of things like your smart home and all your sensors, that this doing all of that work.


Sue: I'm seeing in all these different signals, just how important and influential the management company slash builder property developer, right? They all are in all this, you know, and Raakhee to your point of, it really comes down to the people who are there. 


It did make me wonder if there are studies about general property status, wellness of the community for those areas that do have residential HOAs, or boards of communities, and whether or not that's actually better, better managed, happier residents, I'd be really curious. Because ideally if you have a stake in it and you know the people on a relational basis, you have some incentive to be accountable and to want the best for your neighborhood and for the people who are there.


Raakhee: Yeah, yeah, Sue, I do wonder. I mean, I would think almost like instinctively being like I'm sure, right? It must be. And I think it raises to me that sure, even if we have all this technology and things are so streamlined, it's almost, you know, where you live and how you live. Everyone wants a stake and a claim in the say of how that has to be. And so I wonder that in some way, and maybe, you know, it won't be a homeowner's board, it might be called something else, but will we still continue to form those coalitions and groups of, yeah, we have all the data, but we still want to talk about it, we still want to plan for something different. We still want to come together in union about how we live and having some agency over that because that's very human. That's not going to go away. I think it might just look different.


Yes, I think with that, yeah, I think we would discuss some very unique different signals about the real estate industry. I think I'm left with a thought of, like I said, I think this industry is touted for massive change. So it's probably one where we're going to see some really, really interesting changes in like the next decade. So yeah, we'll keep watching this space, but if you have any interesting stories of things you've observed with where you're living, we would love to know. So please share those stories with us. And until next time, take care, bye for now.


[22:15]

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