PropTech is gaining traction in New York City

“We’re at a really interesting moment,” said Cindy McLaughlin, CEO of Envelope, a PropTech company that helps users navigate the zoning codes in New York City. “Up until now, development decisions have been made from the gut. In the city of the future, much of this can be done algorithmically from your computer.”

ICT - information and communication technology

The RICS Summit Series Americas 2018 in New York City boasted a PropTech panel with a focus on real estate investment. McLaughlin was joined by Caren Maio of Nestio, Jonathan Wasserstrum of Squarefoot and Noah Isaacs of Bowery. It was moderated by MetaProp’s Aaron Block.

McLaughlin explained that New York City has a rule-based system that works well with tech companies that analyze data. The rules can be confusing – she likens the zoning code to a hairball. But with the right tool to untangle the rules, “you can now model out a building’s future before you’ve laid out a dollar or brick.”

Real estate development can be tricky in a city with New York’s regulatory regime and it gets complicated further when you factor in public opinion and impact on communities. “There’s not a really great public process you can go through that doesn’t take years and have an adversarial tone,” she explained. But McLaughlin sees her job as the democratization of real estate development – she’s capable of running scenarios to find solutions based on the available data.

This PropTech advantage is starting to take off in New York City, according to Maio, who explained the advantage tech offers is something developers and investors are taking seriously.

“NY is one of the cities seeing a new development boom and folks are starting to say, ‘what can I do to stay ahead?’ Owners are starting to lean in to see how they can use technology to stay competitive,” said Maio.

Landlords are getting in on the trend too, according to Wasserstrum. “The average building owner is a family. As the reins are being handed over to the next generation, you’ll see more and more adoption of tech in the industry.”

Is PropTech replacing jobs?

As technology becomes more ubiquitous in real estate, there is a risk that jobs will be replaced by artificial intelligence. Bowery, for example, provides real estate valuations using data and artificial intelligence to get the work done faster and without human bias or errors.

But Isaacs won’t call his company a job-killer. He says the industry is facing a crisis with 62 percent of appraisers over the age of 50 and the next generation is showing no interest in learning the trade. He believes reframing it like a tech start-up will appeal to young people. In the meantime, his company can do the job of an appraiser more quickly.

“I worked in real estate valuation,” he explained. “I was spending 70 percent of my time on busywork - asking a bank to pay me a couple hundred dollars an hour to format a word document. You shouldn’t be paying for busywork.”
Maio agreed stating that her company helps people do their jobs better. “Highest and best use of their time is not manually updating – I’m trying to kill excel, not jobs.”

By Amie Silverwood, Writer, RICS, Americas

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