Personal service or personal privacy?
By David A. Smith
5 min read
Amazon, Google, and the NSA know more about your residents than your property manager does – and are collecting more information about them continuously.
The classical market survey treats changes in demand. On the other hand, if your manager asks one question too many, the allocator’s Department of Resident Eumenides descends and smacks you upside the head with each resident’s right to privacy.
This gargantuan contradiction is a consequence of the connectedness revolution that has upended previous notions of personal privacy versus personal service and the anachronistic nature of our regulatory and operating environment versus the Internet’s Wild Wild West mentality.
Americans love rugged individualism; nowhere is that imperative stronger than in our views about the home. A family’s home is its castle and, regardless of whether we are renters or owners, once we cross our threshold1 and close our door, we expect absolute dominion over our space and an equally absolute right to privacy.
Different Privacy Implications
The principle of no-trespassing is reflected in apartment leases, which generally provide that no one – not Satan, not a vampire, not a property manager – may enter without our permission. Yet ownership and leasehold occupancy are quite distinct tenure forms with different implications for privacy:
- Ownership is permanent, while an apartment lease is transitory. This enables the landlord to recover the property and to check whether the unit is being damaged;
- A homeowner does his or her own maintenance and repairs. A tenant simply calls the landlord or management office; and,
- A homestead has no public space; it’s all private property. A renter normally moves through common areas of the landlord’s property (e.g., building lobby, hallways, elevators). These spaces are not public…but also not fully private.
Meanwhile, the explosion of broadband has led to ubiquitous connectedness. We expect our handhelds to deliver us continuous telephone, text, email, and Wi-Fi connectivity. We think nothing of posting on Facebook, Twitter, or Instagram tidbits that in other contexts could get us fired, expelled, or divorced. Answers to questions that an employer can’t ask a job applicant can be found by mere seconds of Googling.
The Way It Should Be
Because information about each of us is so readily available today, businesses have learned that their personalized “recommendations for you” offerings, fashioned from scraping together big data, can generate big profits. Aside from making us feel special, these pitches reduce our Web search time and enhance our experience. We trade our implicit acceptance of lost privacy from explicit responsiveness for our personalized whims. That doesn’t happen in affordable housing properties, though it ought to in the following ways:
- Security. Video monitoring enhances resident security and is accepted in public or even quasi-public spaces: office lobbies, grocery stores, public transit; and,
- Service. The customization of resident services (e.g., social programs, resident activities, connection to neighbors, resource sharing) helps turn an apartment complex into a community. This reduces turnover, increases resident satisfaction, and helps residents and their families improve their economic and social self-sufficiency.
While ubiquitous-data retail applications are becoming part of our normal customer experience, affordable housing is lagging for three reasons:
- Technology. Big data and retail customization work from automated scraping, frequency of scrape, and scale of scrape (to support the high-capacity computerized crunching of all that scraping data). Affordable housing hasn’t got the portfolio concentration to achieve scale, nor the installed electronic infrastructure to scrape what
- is scaled;
- Restrictions. Tenant leases reflect an overgrown thicket of well-intentioned resident right-to-privacy regulations that are now anachronistic; and,
- Inertia. If you’re a property manager, why dream of providing services that are prohibited by HUD Handbook 4350.1?
Rejiggering Expectations
The status quo has to change – to benefit residents. Privacy rules should make sense, based on technology and affordable housing goals in 2015, not the 1970’s. For example, any form of apartment complex security that doesn’t include real-time 24/7 monitoring is deficient, and risks a liability lawsuit that would not be pleasant to defend.
The endgame is simple. Landlords should have the right:
- To harvest data gathered in non-personal spaces, such as from real-time monitoring;
- To aggregate other scrapable online data that a resident posts in their profile (e.g., Facebook, Amazon); and,
- To use data so harvested to customize resident services and provide a safe, high quality environment.
Language authorizing the collection and use of such data should be written into the basic affordable housing lease, and a resident’s opt-out of data collection should be understood as a waiver of the resident’s ability to assert certain future claims against the owner or property manager.
Big data’s emergence has raised people’s expectations of personalized service. In affordable housing, this means redefining residents’ expectations of personal privacy. It’s inevitable, inescapable, desirable…and we should be in front of it.
David A. Smith is Chairman of Recap Real Estate Advisors, a Boston-based real estate services firm that optimizes the value of clients’ financial assets in multifamily residential properties, particularly affordable housing. He also writes Recap’s free monthly essay State of the Market, available by emailing dsmith@recapadvisors.com.
