Modular units, virtual reality, rental homes, data-driven marketing—and even autonomous flying passenger vehicles—will transform master-planned communities in the coming years, a group of developers and marketers said during a panel discussion at the 2017 ULI Fall Meeting in Los Angeles.
The panel, moderated by RCLCO chief executive officer Gadi Kaufmann, explored a wide range of emerging trends that could dramatically reshape the growing master-planned community industry. The ideas ranged from futuristic new technologies like autonomous vehicles to innovative business models that are more focused on building communities for renters.
These are a few of the coming trends the panel highlighted:
Build to Rent
Kaufmann said data show clearly that, compared with the past, a greater proportion of the population is looking to rent a home rather than buy one. This means that single-family rentals as a product type are coming to master-planned communities.
Tom Woliver of Hillwood Communities, a Dallas-based developer of master-planned communities, highlighted a project by BB Living in Arizona that offers three- and four-bedroom rental homes in a master-planned community. Woliver said that 30 percent of the community’s renters end up buying into the community. “So, it’s a great incubator for future residents of your master plan,” he said.
Another company, Nexmetro, is building higher-density planned communities targeted exclusively to renters. Kaufmann said the company has had success in Arizona and Texas and has plans to take its model nationwide.
Woliver said that the master-planned sector lags far behind other industries when it comes to leveraging consumer data to support marketing and sales. “Other industries are doing so much better,” he said. “We are at ground zero.”
Laura Cole, who leads marketing efforts and manages the builder program for Lakewood Ranch, a master-planned community on the west coast of Florida, said the challenge is not acquiring the data, but interpreting them in an intelligent and productive way that support sales and marketing efforts. She said that master-planned companies should already be more aggressively hiring data experts to more effectively leverage consumer information to drive marketing campaigns that are more intelligent and nimble. “With most of the marketing today, we can make very quick adjustments by what we learn,” she said.
Though they have been dismissed frequently by master-planned communities as cheap or inadequate options, several panelists said that manufactured or prefabricated housing has progressed to the point where it could become a viable option. “The rest of the world builds with manufactured housing . . . and it’s coming our way,” said Kathy Cecilian of Cecilian Worldwide, a marketing firm that specializes in community developers.
The panel highlighted Blu Homes, a California company producing modern premium prefab homes that can be built in half the time of traditional custom homes. Beth Callender, with San Diego–based CallenderWorks, said that Blu Homes is particularly interesting because it is transforming both the building and buying process for the consumer.
Already gaining more adoption in the marketing side of the real estate industry, virtual reality (VR) technologies are beginning to affect the way that companies design and market homes, which will have implications for master-planned communities, several panelists said.
Cole said that while she was initially a skeptic of VR’s utility, the quality of the technology has increased dramatically so that it has “crossed the line into being an indispensable tool for the development community.” For example, she said that VR gaming technology can already be used to model different scenarios of a development for municipal planning departments or companies, showing, for example, how traffic changes occur as densities go up or down. “It’s helping you make better decisions without making mistakes,” she said.
Perhaps the most extreme change proposed during the panel was from Woliver, who explained how his company is partnering with Uber Elevate to bring autonomous flying passenger vehicles to its mixed-use Frisco Station community in north Texas by 2020.
The concept would allow passengers to hail a driverless flying vehicle that would fly over traffic and connect with land-based Uber vehicles when necessary. Woliver said that his company is building the so-called verti-ports in its community to allow the vehicles to land. “As far-fetched as this sounds, money is getting pumped into this and it’s happening,” he said.
The panel also highlighted Olli, an autonomous electric bus designed to transport neighborhood residents throughout various points in a community. “This is coming to your neighborhood,” Kaufmann said. “It’s not a joke.”