Tuesday, January 14, 2014

Are drones the future of real estate and private business in the U.S.?

The strange aircraft hovers outside your front door, floating twenty feet off the ground with the buzz of a lawnmower engine.  It’s camera eye whirls toward you and registers what it sees for a moment before speeding up and moving on down the street.  What was that thing?  A super hi-tech model airplane?  Are we under attack by flying robots?  Or was it a UFO manned by little green aliens?!!!

No, it was a drone, or "UAS," Unmanned Aerial System as industry-folks call them, and this scene wasn’t something out of a sci-fi movie but something you might see in every day in your neighborhood in the near future as drones are starting to be used in everyday life for a multitude of commercial applications – including real estate.
Yes, drones are even being used to sell homes as real estate agents try to get a leg way up on the competition by utilizing them for aerial photography and virtual tours to promote their high-end listings.

Of course, drones have a certain stigma, as they were first developed as military technology that could offer recon intelligence or deliver a deadly aerial strike without putting soldiers in harms way.  The controversy of drones in military use aside, it seems their future has far more to do with business and every day life.  But no one expected the industry of real estate sales to lead their charge into normal society.  Real estate brokers using military tech that cost millions of dollars to develop to sell your home?  It’s a fascinating example of the tail wagging the dog. 

Sure enough, some agents are using drones to sell their listings.  We’re not talking about a $150,000 3 bed/2 bath listing in a working class neighborhood, here – drones have mostly been used to market million dollar luxury homes.  They actually fly the drones into and the homes and film the whole thing, an above-eye-level virtual tour that is more NASA than stagnant photos with a dinky digital camera.  They can even fly around the house, through the yard, and of course go as high as necessary to produce stunningly-detailed and unique birds-eye views of the property never seen before.  Drone-shot aerial footage is particularly snazzy when you have grand entranceways, great rooms, and expansive back yards that can be viewed from story-high vantage points.  The video footage is then collected and edited into a polished Hollywood-style trailer used to build excitement and build a buzz about the property.  In the past, some eager Realtors have hired helicopters to circle and shoot footage of their super-listings, but the expense is prohibitive, access is restricted by the flight plan, and the footage comes out so loud and choppy that it needs considerable editing.

Realtors who specialize in ultra-luxury listings from Maryland to California to Vancouver, Canada are already using these drones to market their listings – and separate themselves from the pack.  But it’s not without controversy – as the legality of drones in commercial use is a huge grey area that is being refined and articulated as we speak by the FAA, Federal Aviation Administration. 

The real estate agents say they are sticking to the rules, only using the drones on private property and keeping their flight paths below 500 feet, just like a model airplane, but the FAA doesn’t see it that way.  In Vancouver, Canada’s high-end market, the realtors have to take out a special permit every time they intend to use the drone, and even submit a flight plan. 

Drone technology has evolved remarkably as it hits the private sector.  The size of drones varies from the size of a model airplane to bigger than a person, and the cost can be anywhere from $1,000 to up to $20,000.  Piloting it is another challenge.  Some are easy to use and can be operated remotely with a remote control device or through a touchpad on your cell phone, but others are more difficult and recommend you use an experienced drone “pilot” to operate the craft so it doesn’t smash into a tree or fly out of range and become lost.  The latest drones, perfected by pimply-faced tech wizards not military personnel, can be so small they fit into your pocket, and even look like somewhat mechanical insects or humming birds. Others are more standard model aircraft or mini-helicopter variety. 

So why the sudden push of drones into commercial use?  Maybe we can attribute it to the axiom “There is nothing as powerful as an idea who’s time has come,” or refer to the lineage of government and military inventions that have shifted to practical use by ordinary citizens from LSD to the Jeep, but in this case, Amazon.com had a lot to do with it, too. 

The online book, movie, and everything-else retailer announced in December that it would start testing “octocopters,” that could potentially deliver packages to customers.  Instead of sending off the copy of “Harry Potter” you just ordered via a traditional UPS or post office method, where it’s trafficked between warehouse, shipping center, airplane, and then delivery truck fighting traffic and wasting gas, the largest online vendor would just attach it to a drone, plug in your address, and fly it on out to you remotely with a drone, landing at your front door in as little as 30 minutes.  They expect to see widespread use of drones for their deliveries in the next 4-5 years, but it very well could “take off” much sooner than that. 

Other companies are quickly taking note, and doing business via drone could quickly become the new normal.  Once one company starts utilizing drones, all of their competitors will surely scramble to keep up, both in perception and increasing the efficiency of distribution. 
Already, the we can smell the gun powder of a drone-phenom boom coming our way – the President of Wired Magazine dropped out to start his own drone company; a British company is offering drones that can follow you around (via your mobile phone’s signal) and shoot a personal documentary for those who are narcissistically-inclined; a Bay Area startup wants to utilize the first “taco drone” to usurp the taco truck; and an upcoming beer festival in South Africa plans to use drones to deliver beer to its concert patrons!   Heineken-by-hovercraft aside, the dawn of a new age of aerial tech is irrefutably upon us.  In fact, upcoming regulation rulings not withstanding, the Federal Aviation Administration anticipates there will be 7,500 commercial drones operating domestically by 2018. 
Others in the private sector say those numbers are pedestrian and lack vision, and we can probably add a “0” or two to that estimate.  The Association for Unmanned Vehicle Systems International (AUVSI), which is an advocacy group for the budding industry, is actively lobbying lawmakers to allow drones in commercial use for farmers, delivery companies, Hollywood moviemakers, and many other industries.  They expect that if new regulations open the way for private drone use in business, commercial entities will grow nearly 600 percent by 2025, worth more than $82 billion, and create 100,000 jobs in the process.
Since we’re talking about the FAA, that big agency with three little initials, how exactly do they feel about drones on our streets and in our air space?  Currently, the letter of the law is that drones are prohibited from being used for explicitly commercial purposes.  But everything from their jurisdiction to the definition of Unmanned Aerial Systems is on the table for debate. 
Some claim that drones are still unregulated by the FAA, but in reality they have strict rules on any craft that flies above 50 feet.  The government body has already made it clear that drones are not to be classified as merely model airplanes.  No permits have been issued for them to fly like in Canada, but the FAA has issued over 1,000 waivers from 2009 and 2012 to public entities, including law enforcement, to operate drones.
Very soon, the i’s will be dotted and the t’s, crossed, as lawmakers and the FAA draft a new proposal that sets to clarify the rules as Congress mandated the integration of drones into U.S. airspace by a 2015 deadline.  They are currently accepting proposals for six new drone testing facilities to aid in drafting their regulations.  It’s expected that the FAA sets to regulate any drone under 55 pounds (commercial airline rules will take over for bigger vessels) some time in 2014.  As is, they don’t sanction flying drones outdoors for business purposes, and can impose heavy fines if operators fly drones in a “careless or reckless” manner.

And how can we blame them – imagine a world where the skies are dark with these unmanned flying objects, bumping into each other, stopping traffic, crashing through billboards and trees, and generally causing mayhem.  In September, a Government Accountability Office study concluded that drones are not yet able to avoid other aircraft and that there are serious “concerns about national security, privacy and interference with Global Positioning System signals." 
There are also huge fears that universal access to drones will cause a host of privacy and civil rights violations.  Catherine Crump, attorney with the American Civil Liberties Union, expresses concern “that Americans will be subject to persistent aerial surveillance every time they leave their homes."  In fact, right now drones are being used by the Department of Homeland Security for border security and port surveillance.  The possibilities to expand anti-terrorism and crime-fighting efforts are endless, and perhaps comforting.  But dark clouds quickly blow over that sense of comfort as the use of drones becomes more nefarious.  Law enforcement agencies have already inquired about using drones for police surveillance, unmanned ticketing and fining, and possibly affixing a Taser or chem grenade to a drone to apprehend dangerous criminals with no human risk.  The Defense Department is “assisting” the FAA in drafting the necessary regulations by the 2015 deadline, which lends us to think they’re trying to keep their hands in the drone pie even as it surpasses military application into privatization. 

Of course, with any new technology we have to juggle the good and bad implications of its use (think: cell phones, computers, and splitting the atom!)  But there is also a huge upside for philanthropic purposes to serve humanity.  Drones can go where human beings (and helicopters) cannot – faster, cheaper, and endure and weather and harsh conditions with little concern.  Farmers want to monitor their land and cattle, miners could use them to explore the safety of caves, missing hikers could be found, endangered wildlife tracked and protected from poachers, medicines distributed to remote villages, firefighters can send in drones to measure hot spots in burning buildings and deliver oxygen or fire shields to those who are trapped; the potential to help goes on and on.  Already, Canadian police used a drone to locate and then treat a man who had been hurt in a car accident in a remote, inaccessible area, saving his life. 
It’s hard to even imagine the cornucopia of benefits that could come from the use of drones in everyday life, but for now it’s relegated to tech geeks, hobbyists, early innovators…and a few real estate agents in ultra-luxury markets.  So if you happen to be at a million dollar open house and a little drone flies up to you with a plate of cookies and sign-in sheet, you’ll realize that it’s a sign of things to come – the new normal in business over the next 5 years – and the future of technology in real estate.  


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