Smart Home Due Diligence and Security
If you think everyone wants smart home technology, there may be several surprises for you down the road. Its operational complexity challenges not only prospective customers but the tech companies who seek to be their service providers. At the 14th Annual Apartment Innovation and Marketing Conference (AIM 2019), which took place at the Hyatt Regency Huntington Beach on May 5-8, an informal discussion led by
- Chris Acker, Director, Community Technology Services, LMC
- John Bonino, Senior Vice President – North American Private Equity, Heitman
- Leslie Mathis, Owner, Streamline Multifamily Group
drew questions from the audience on what implementing Wi-Fi and the IoT means for property owners and operators.
The very novelty of smart apartments is often the first stumbling block. Smart tech requires unprecedented collaboration between operations, maintenance, sales, vendors, IT, marketing, residents and other contractors. “It takes a pretty robust team to make sure you integrate properly,” said Streamline’s Mathis, “and do it right the first time. You’ve got to get it right on the front, otherwise you’re going to have a lot of unhappy residents.”
Permitting alone can take a long time, according to Heitman’s Bonino. At the company’s Santa Monica project, “it’s been a very interesting process. We started this development back in 2014. We’re a year away from delivering, but way behind in smart technology.” It seems that while everyone appears in love with IoT ease, concerns about privacy - from communities, managers and residents - will keep smart home agendas from advancing, from a community
And it’s a fair concern, all panelists agreed, as many tech startups are too young to have the kind of history that reassures property owners and managers. “A lot of tech contracts aren’t completely vetted out, regarding privacy,” noted Mathis. “We’re working through that - especially when it comes to who’s responsible for locks.” For LMC’s Acker, “Our door is an access control device. We think of it as part of our access system. It’s separate from IoT and what’s going on inside the home.”
Money is also at issue, both the cost and what you get for it. For example, proprietary systems only work as long as the proprietors stay in business, warned Bonino. His advice? “Make sure your software is agnostic.” For Acker, products that didn’t work with his software came as a surprise: “Not every dimmable bulb is made the same. It’s obscene.” Support services also need to be factored in, “because our team is not going to be available 24/7 to answer questions,” said Mathis. “We ask third-party partners what kind of training they offer,” said Bonino, “and they say, ‘At what cost?’”
The final challenges - namely, demand and buy-in - determine the success of smart-home installation. For example, Acker said, “We partnered with Amazon on a pilot that included white-glove installation. We were surprised at the limited number of people that would take the service, even with having it all set up for them.” For Mathis, “When we did tests, we had it in 10 units. We saw that people liked it in the model, but not everybody wanted to pay for it.” For prospects, however, Mathis sees a benefit: “It’s a differentiator. Our teams have had success selling it to new buyers.”
Conclusion: Smart-home technology will become a differentiator, but costs and liabilities need to be closely watched.