Wednesday, October 31, 2007

FCC Bans Exclusive Deals, Considers Other Restrictions

In an effort to "foster greater competition," the FCC has adopted an Order that bans the use of exclusivity clauses between cable operators and apartment communities and other real estate developments, including existing agreements.

They are also considering taking similar action to prohibit exclusive agreements with satellite providers, private cable operators, and other video providers. They want to ax exclusive marketing and bulk billing arrangements, too (which could create a real mess in student housing communities). The goal is to "increase choice and competition" for residents in these communities.

As expected, the NMHC and NAA have come out in oppostion to the ruling (PDF), claiming that the decision "does not enhance tenant choice and will not result in lower prices."

This is an extremely complex, politically charged issue -- and I don't think that anyone is really being honest about the true state of the marketplace in this one.

While there are certainly some bad deals out there that are not in the best interest of the consumer, there are also a number of property owners that have negotiated incredible discounts on premium video services, as well as higher levels of customer service from their providers.

What now?
The coverage surrounding this ruling backs property owners into a corner. Now residents will expect to be able to choose whichever provider they like -- you may want to prep your property staff with some prepared responses to resident questions.

In new construction projects, most of the costs associated with the infrastructure needed for multiple providers will likely be assumed by the developer, which could lead to higher rents or a conscious decision to leave some wiring out of the budget. Existing properties will be even more difficult to upgrade.

Thus far, the Commission and the media have focused this issue on price, but I think the ruling presents a real opportunity for property owners to demand greater innovation from their service providers. If there are three or more providers in a building, the winner will be the one who provides compelling value-added services that are uniquely possible in multifamily communities.

Here's the link (PDF) to the FCC's release explaining their decision. I'll provide a complete roundup of links related to this Order on the Multifamily Technology news feed.

Thursday, October 25, 2007

Think Symmetrical: Change the Way You Market Broadband

As usual, the folks over at Parks Associates are on top of things when it comes to the latest trends in consumers' digital habits.

Verizon has announced a new FiOS broadband offering to their East Coast customers -- Internet service that offers 20 Mbps both up and down. The pricing is competitive to existing cable broadband offerings, but it marks the beginning of a shift in how we're going to see broadband services marketed. For years, Internet service providers have promoted fast download speeds, with little emphasis on their upload offering.

Now, based on the current trends in online gaming, unlimited online email and storage, and video and photo sharing, consumers will want fast uploads in addition to fast download speeds. It stands to reason that marketing very responsive upload capabilities could start to become a critical differentiator. Along these lines, Parks has conducted surveys exploring consumers' digital media habits that show "the growth of the media habits that are likely to drive consumers toward a symmetrical broadband service."

Another Parks study from 2006 shows that some consumers would even pay a slight premium for a symmetrical broadband service. Of course, video gamers and "creative computing consumers" (photo and video editors) are the groups with the strongest interest in such a service. The study also found similar trends in consumers' interest in online storage - another applications that would benefit from symmetrical broadband.

As Parks' Kurt Scherf also notes, "Verizon indicates that symmetrical services are going to be applicable far beyond entertainment applications -- they view such services as remote video monitoring and digital health as also important for driving symmetrical broadband. We're keeping an eye on applications like these as well."

Property owners should do the same ... especially considering the new competition for your residents' attention and dollars that will result from next week's FCC ruling.

Saturday, October 20, 2007

Americans Don't Blame Buildings for Greenhouse Gases

According to studies by the EPA, construction and maintenance of buildings produce up to 48% of dangerous greenhouse gases. Yet most people, including our government officials, have been trained to think that the worst culprits are the gas-guzzling Hummers on our roads.

The American Institute of ArchitectsA recent survey by the AIA shows that only 7% of respondents accurately identified buildings as the primary cause of emissions. In comparison, 40% of those surveyed believed that cars and trucks were the greatest producers of greenhouse gases such as carbon dioxide and methane. Other offenders taking more blame than buildings included power plants and natural causes.

Despite the misconceptions, American consumers want more energy efficiency in their homes. Some reports indicate that they're willing to pay for it. Others disagree.

Another recent survey by the AIA reflected a growing desire among homeowners for green products, including geothermal heating and cooling systems, tankless water heaters, and flooring made from easily renewable materials, such as bamboo and cork.

The AIA is vowing to continue to impress upon its members, Congress, and the general public that energy efficiency is achievable whether in new construction or in existing buildings.

The problem is, the AIA isn't the group selling the home, or renting the apartment.

What are you doing to make your building more energy efficient?

What are you doing to educate your residents about ways they can be more environmentally friendly?

Thursday, October 18, 2007

More Social Networking for Your Property

LifeAt.comLike some other sites we've reviewed in the past, New York-based LifeAt wants to create a social network for your community. The site has received some attention from the Silicon Valley crowd. (Read the comments ... it's interesting to see how the world of "Web 2.0" has reacted to the idea.)

LifeAt's business model is to make a one-time sale ($5,000) to the property owner or condo association, then they host and maintain the co-branded site indefinitely. The site is visually more appealing than AptConnect, with lots of features for residents, but it does not appear that it offers as much functionality for property managers ... yet.

Each property website is primarily built around resident-generated content, but can also feature leasing info and other items posted by the building manager. Residents sign up to get news about the building, interact with other users, etc. They can provide information and reviews about local businesses (dry cleaners, restaurants, delivery services, etc.), and there's a marketplace for residents to buy and sell their own goods within the building.

It remains to be seen whether the transient nature of apartment renters will benefit or work against sites like this ... either residents won't stay long enough to care about meeting their neighbors, or they'll want an easy, engaging place to make new friends and learn the area. Either way, it's clear that websites of all kinds are getting more social, and your property's sites can only benefit by joining the party.

Wednesday, October 17, 2007

Multifamily Musings: Wireless Options

Last week, I wrote about open access for multiple service providers. Currently, this debate centers on “wired” services –- like TV and telephone. For now, Internet also is typically included in the wired category, but with the proliferation of wireless Internet services such as Wi-Fi, WiMax and cellular, will that change? Can property owners prevent multiple providers from offering wireless services at their communities? Is there enough business for more than one ISP on a property, be it wired or wireless?

In addition to presenting a serious technology challenge, this issue poses an interesting contractual situation as well. In the not-too-distant-future, this is going to become an issue that the industry will need to handle. Everyone -– including service providers, developers, attorneys, and architects –- needs to start working together to find a solution. Any ideas about where we start?

Wednesday, October 10, 2007

Multifamily Musings: Open Access

Multifamily Musings will be my new weekly post – I’ll pose a question or a hot topic that we, as an industry, need to be thinking about. Hopefully we can initiate some dialogue about these important issues.

This week, I want to direct our attention to telecommunications and open access property networks. Now that almost every provider can deliver the triple play, does it still make sense for property owners to partner with an exclusive provider if they want to include bundled services in the rent? Should residents have the ability to choose their providers based on their personal preferences? Should the developer have a choice between these two scenarios based on each property’s specific needs?

Service providers are innovating at an unprecedented pace, but often leave multifamily properties as a distant second behind their single-family subscribers. Property owners need to understand that communications services and residents’ expectations have evolved – and will continue to change at an incredible pace. And it remains to be seen where the FCC will fall in all of this… Where do you stand?

Asking the Questions That Need to Be Asked

Over the past year and a half, this blog has evolved into a forum that offers perspectives and thought-provoking content unique to the multifamily market. Our goal is to get people thinking about technology’s role in the multifamily industry and in our residents' lives. Every day, we’re excited to find more and more readers that are following this site and joining in the conversation.

Starting today, we’re introducing a new weekly feature to draw more attention to the issues and potential challenges facing the industry. Every Wednesday, look for Multifamily Musings – a series of issues and questions, posed by Richard Holtz, CEO of InfiniSys Electronic Architects.

We’ll continue to update you as we add new features and content to the blog, and we look forward to more of your feedback. If you like what we're doing, please forward our site to a friend or associate. Thanks for reading and for participating in this community.