The shift from high-touch to high-tech in multifamily housing is the result of development innovations in real estate. It wasn’t until the smartphone, however, that the first truly smart residential building came into existence.
Improvements in design and construction lowered operating costs for building owners and managers. But even as recently as the early 2000s, differentiating a property and commanding market rent still meant providing high-touch services to residents. As prospective renters became accustomed to seeing luxury apartment homes offering high-touch services as amenities, owners and managers struggled to keep the costs associated with those services in check.
In an effort to offer these highly desirable amenities without absorbing their associated costs, some building owners and managers attempted to outsource these services to third parties. Unfortunately, it was the building’s own IT infrastructure that hindered their success.
Technology infrastructure in the form of access control is implemented for resident security. Developers, owners, and managers install various forms of these systems throughout their properties to stop unwanted visitors from entering their building. While effective, these systems also make property access for the very providers they are outsourcing high-touch services to more difficult. This often leads to an experience in which either the management team is left facilitating property access or, worse, the resident is.
In 2007, property access changed with the creation of a small device, the smartphone.



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How the Smartphone Created the Smart Building


As the popularity of the smartphone swept across the globe, it soon became the most popular personal electronic device in history. In fact, the vast majority of Americans – 81% – own a smartphone, and among those who live in Class A properties, it’s 93%.

What makes this device unique is its ability to quickly and securely connect anyone to all of the world’s data and services. This power, along with its overall ubiquity, has transformed the global economy. Multibillion-dollar enterprises have been built entirely upon this device, with no industry — including transportation, commerce, and services — insulated from its effects. And though real estate may be one of the last to feel the smartphone’s impact, primarily because buildings are constructed of steel and concrete with lifespans of 50 to 60 years, multifamily pioneers are changing this paradigm.

Before the smartphone, an investment in IT infrastructure such as access control meant wiring, hardware, and installation. In new developments, this can be planned for, but in existing buildings, the cost of retrofitting new technologies is frequently too high to justify. But through a smartphone, buildings (new and old) no longer need to be designed with wiring tethering everything together. Instead, access control points are connected to the Internet through Wi-Fi, and control signals beamed to smartphones.

The smart building could not exist without the smartphone. Instead, there would only be a building filled with expensive wiring and hardware constantly requiring residents, visitors, and guests to use their keys, scan their fobs or swipe their cards as they shuffled through. With the smartphone, however, something magical happens: people can move through the building with ease as locked doors and elevators automatically open. What’s more, owners and managers can instantly grant or revoke property access to anyone — including third-party service providers.

The next post in this series will highlight the largest group of renters in history and how they plan to use high-tech to request high-touch services.   


The Shift from High-Touch to High-Tech

John Tamn


John Tamn

I enjoy writing about real estate, property management, and PropTech. I live and work in New York City.