I’m writing this sitting on an airplane wondering whether this week will be the last week I travel for quite a while. As the level of fear (dare I say panic) continues to rise, we’re bombarded with exhortations to wash our hands frequently (easy to do), stop touching our face (virtually impossible, just try to do so for even 15 minutes) and dispense with handshakes, hugs and even standing within 6 feet of one another. While I keep telling myself (and I fervently believe) “This, too, shall pass,” I can’t help feeling a sense of anxiety driven by the uncertainty of it all.
To relax, I open up the latest edition of The Economist and as I read along, I come upon the “Schumpeter” column (Economist readers will recognize that as the regular column in the Business section).
Titled “Plan V,” the teaser copy says, “Covid-19 is foisting change on business. Some of it may be for the better.” One of the key elements of the article is about how companies are responding to the virus risk by encouraging (often requiring) that associates telecommute, in many cases as a “test” for contingency plans and in some cases (e.g. Seattle) as a strategy for arresting the pace of new cases. This dovetails with a story I heard on NPR driving to the airport discussing the same thing.
Both NPR and The Economist make the argument that this could be an unexpected, but possibly positive, long-term impact from the virus. The latter points out that British and American firms pay on average $5,000 per employee on rental costs despite only 40-50% of desks being used during working hours. They suggest that employers may find an increase, or at least no dip, in productivity and thus change working patterns in perpetuity.
While acknowledging that this is still very much a human and health crisis, I couldn’t help but start to think about what this could mean to our industry. The “work from home” approach is likely to accelerate something already happening in many companies as various jobs that are typically done in a cube or office are simply done from home (think accounting, IT help desks, many analyst jobs, etc.).
When I turn my attention to on-site teams, it becomes much less clear exactly what will happen. If our residents work for companies who have them work from home, then we’ll certainly have more people onsite during the day. However, if authorities request (or require) quarantining of whole areas, then it may be difficult (and unwise) for any non-essential personnel to come into the office. Service technicians may be required to show in person for essential repairs; however, few would consider leasing general resident services associates to be essential in this scenario.
So, imagine the scenario where leasing associates are not allowed to go to the office yet leasing still must occur. This has many similarities to what is already happening in single-family rentals (SFRs) where it’s simply cost-prohibitive to have a leasing associate tour each prospect. SFRs have successfully come to rely on self-showing technology as their principle means for touring homes. Leasing associates, often in offices but just as easily from their homes, then follow up with prospects to continue (and close) the leasing process.
For companies that don’t yet have the parts of smart home technology needed to implement self-showing, it’s not likely that a short-term crisis will immediately drive this change. However, I imagine three different scenarios which this crisis could catalyze significant changes:
- If the coronavirus/COVID-19 threat becomes a long-term chronic scenario (imagine, for example, that it becomes a seasonal virus and effective vaccine development takes more than a year), we could be faced with regular periods of intentionally limiting human contact. In this scenario, self-showing becomes a potentially imperative tool in our arsenal.
- Even if self-showing is not able to be ubiquitous for this epidemic, executives may look at this crisis and ask how they can be better prepared for the next one. If we already had self-showing in place, then the thoughts of asking leasing associates to work from home for a period of weeks would not be so daunting. Some risk-mitigating and forward-looking executives are likely to be motivated to have self-show options in place “for the next one.”
- Lastly, and hopefully the least likely (though I fear not), it is possible that this crisis will be the cause of a recession that could dramatically affect multifamily housing as well as the entire world economy. As we noted in our recent 20for20 white paper, COOs are much more open to self-showing than a year ago; however, many have been taking a “wait and see” attitude driven by the lack of an immediately compelling need and a fear that vendor consolidation could render current choices obsolete in the future. A significant economic downturn could tip the scales in favor of self-show, and several other, technologies that could increase leasing efficiency.
No one knows for sure how this will turn out, and I have been intentionally a bit provocative in laying out the various scenarios. That said, I feel better mapping out a variety of responses to these different scenarios than just worrying whether the gentleman next to me is going get me sick!
Disclosure note: I am on the board of directors for Anyone Home, one of several vendors with self-show technology and process solutions.