Topic: Real Estate

Haas alumni rethink our physical world.

Street curbs used to serve one purpose: to keep pedestrians and vehicles from colliding. Today, they are microcosms of urban bustle. Cars, buses, delivery trucks, bikes, scooters, pedestrians, and, increasingly, roaming robots all jockey for finite space. As the COVID-19 pandemic lingers, restaurants, too, have spilled onto sidewalks and into streets.

Gene Oh, BS 99, looks at this curbside jam and sees opportunity for disruption. “There’s a huge supply-demand mismatch,” says Oh, CEO of urban transit planning and operations company Tranzito. “And autonomous vehicles and drones will only make this mismatch larger.”

Oh believes that curbs, especially on-street parking and bus stops, need to be repurposed for this smart cities future. Imagine, for example, clusters of sidewalk lockers for delivery drop-offs and reservable spaces for delivery and car-service drivers.

Benjamin Fong, MBA 17, says the implications of street design go beyond logistics and human safety. “The road is a metaphor for society,” says Fong, a former Berkeley city planning commissioner. “It reflects how we work with each other and interact with each other on a very subconscious level.”

To Fong, our streets represent an existential crisis. “We’ve lost our connection with each other,” he says. Sheltering in place and social distancing during the pandemic, he adds, have made us acutely aware of the physical boundaries that limit us.

Fong is not the only one who sees this disconnect. Conversations with 15 Berkeley Haas alumni and faculty who think deeply about the spaces in which we live and work reveal a paradox: As much as we try to avoid each other to stay healthy, our need for in-person connections has never been greater. Technology plays an important role—but in ways that are often less sci-fi than we might think.

“The silver lining of COVID-19 is that we have the perfect opportunity to experiment with our spaces,” says Fong, who serves as director of business development at e-scooter sharing company Spin, a Ford subsidiary. “Now is the time for us to figure out how to use our physical surroundings to build stronger communities and in ways that are more human-centric.”

“Now is the time for us to figure out how to use our physical surroundings to build stronger communities  and in ways that are more  human-centric.”

—Benjamin Fong, MBA 17

Urban Concerns

No one, of course, has a crystal ball. COVID-19, Black Lives Matter, economic devastation, and climate change are all powerful forces that promise to reshape society in ways that cannot be foreseen. Some crises may simply accelerate preexisting trends.

Molly Turner, a Haas lecturer and expert on technology’s impact on cities, says one outcome is all but certain: The pandemic will catalyze sweeping changes in our way of life.

“Some of our most transformative urban innovations have been a result of public health crises,” says Turner, who co-hosts the podcast Technopolis (haas.org/technopolis-podcast), about technology and urban environments. “We developed flushing toilets, urban parks, and aqueducts so our cities would be more safe and sanitary and allow us to live in high density with each other.”

But the pandemic won’t empty out cities for good, says Turner. “Big cities are not dead because of COVID-19,” she says, noting that past predictions of de-urbanization in the face of health threats never panned out. Similarly, the advent of telecommunications was expected to inspire a mass city exodus as people realized they could connect from afar without the high costs of urban living. “Enough people still chose to live in cities so they could be in close physical proximity to each other,” she says.

By necessity, however, cities will have to change beyond figuring out how to get workers safely into offices. For example, if retailers move the bulk of their sales online, empty storefronts will need to be filled. Some cities already are thinking about converting vacant office spaces into residences.

Victor Santiago Pineda, BS 03, BA 03 (political economy), MCP 06 (city and regional planning), reimagines cities as more accessible. A globally recognized urbanist and social impact entrepreneur, Pineda stands by the United Nations’ pre-COVID predictions that by 2050 two-thirds of the world’s population will live in urban areas. Yet, he says, 70% of the infrastructure needed to accommodate that growth hasn’t been built yet.

“This is, unquestionably, the urban century,” says Pineda. “[But] nearly everything that humanity has built since the inception of cities will need to double to keep up with population’s demand.”

As president of World Enabled, a global education and consulting group shaping more inclusive societies, Pineda helps empower leaders to build better cities for people with disabilities and older persons. Pineda himself has used a wheelchair and other assistive technology since childhood and has for nearly 20 years worked with the UN and businesses to ensure that disability rights are seen as human rights. “Our cities are failing us,” he says.

To be accessible and inclusive, cities and private organizations need to unlock data-driven “inclusive innovation” to accommodate the unmet needs of nearly 600 million people with disabilities who live in cities, says Pineda. For example, how will AI, blockchain, delivery robots, and drones frustrate or enhance access for people with visual, hearing, mobility, or intellectual impairments? Are companies thinking about the co-benefits of smart, green, and inclusive design?

Via World Enabled and UC Berkeley’s Inclusive Cities Lab, an interdisciplinary research initiative that Pineda founded and directs, he’s launched a global campaign to ensure 100 cities prioritize inclusion and accessibility as they build infrastructure, both physical and digital, over the next 50 years. To date, New York, Berlin, Rio de Janeiro and 27 other municipalities have signed onto the Cities4All initiative, which plans to measure progress via an inclusive cities index.

“Everything we do to address climate change, racial and gender inequality, education, and employment will be won or lost depending on whether we get our physical infrastructure right,” says Pineda.

The nomadic workplace

Of all the trends catalyzed by the pandemic, the shift to remote work was especially swift. Almost overnight, lockdowns forced millions of U.S. workers to turn spare rooms, tabletops, and even closets into fully functioning offices.

Companies such as Facebook, Twitter, Microsoft, and Dropbox have moved to allow more, or even all, of their employees to work remotely. As more companies follow their lead, Jennifer Chatman, a Haas professor and expert on workplace culture, says the traditional downtown corporate office is headed for a massive shakeout.

“I believe within five years, the real estate footprint of most nonmanufacturing organizations will decline by 50% to 75%,” says Chatman, the Paul J. Cortese Distinguished Professor of Management.

With less square footage, companies will instead embrace hybrid workplaces. Some employees will stay home permanently or rotate with others through spaces reconfigured into fewer offices.

The dominant feature will be large collaboration rooms where small groups of employees can brainstorm and engage in the kind of spontaneous interactions that she calls the lifeblood of culture and organizational life.

Cristina Banks, a Haas senior lecturer and director of the Interdisciplinary Center for Healthy Workplaces, also expects to see shifts away from traditional corporate settings to more flexible work arrangements in the home, coffee shops, or neighborhood “coworking” spaces.

One fad that is unlikely to outlast COVID-19? The so-called socially distanced office of six-foot safety precautions, one-way hallways, and plexiglass dividers that have dominated discussions of returning to work. “We already know these measures aren’t working,” says Banks. “An engineering approach to social distancing won’t work unless it also takes human behavior into account.”

Simpler ways of living

Even before COVID-19, Eric Cress, MBA 04, was seeing a desire for fresh innovation among homebuyers and renters—namely, a thirst for stronger community through physical interaction.

“When you’re living in an apartment or condominium, you’re so close to other people, but you don’t have that neighborhood feel,” says Cress, a principal at Urban Development + Partners in Portland, Oregon.

Cress says a growing number of buyers—from young city dwellers to retiring baby boomers—approach him to build their own communities. Typically, these are either condos or stand-alone houses that surround large common areas where residents come together to dine or do chores. The size of the “cohousing” development varies, but the common link is that dwellers seek to develop meaningful relationships with others.

“Everything we do to address climate change,  racial and gender inequality, education, and employment will be won or lost depending on whether we get our physical infrastructure right.”

—Victor Santiago Pineda, BS 03

“The idea is to recreate the neighborhood from your youth, where everyone around you knew each other,” says Cress. While cohousing is still a niche, he says interest is growing and has spiked during COVID-19. His firm now has nine cohousing projects in the works, up from one development five years ago. “For a lot of buyers,” he says, “it’s about getting back to basic human needs.”

Physical + virtual space

Last March, the coronavirus had Alejandro Maldonado, EMBA 16, and his team scrambling. His company, HUM, offers an artificial intelligence platform for helping property developers and managers sell living spaces. But it was meant for showrooms, not home lockdowns. For three weeks, they raced to build an entirely new application so prospective homebuyers and renters could tour dwellings remotely.

Maldonado, HUM’s CEO, says the pandemic forced the real estate industry to wake up to strong consumer disdain for the homebuying and renting process, an experience that can be enlivened with virtual technology.

“Most people have a difficult time envisioning an unbuilt or empty property, and that’s stressful,” says Maldonado. “They want more personalization and customization.”

Omar Téllez, MBA 96, also sees a merging of physical and virtual worlds for the better. He first saw that promise as the founding president of Moovit, the popular mobility-as-a-service provider that Intel bought this spring for $900 million. Moovit helps 865 million users in 3,200 cities worldwide plan their transportation.

Today, Téllez is thinking about how 5G cellular networks will revolutionize human experience. That’s because Téllez serves as vice president for strategic partnerships at Niantic, the Pokémon GO mobile game maker founded by classmate John Hanke, MBA 96. In August, his team announced a major alliance with some of the world’s largest telcos that Téllez says will finally enable spectacular integrations of our physical and virtual worlds.

“With 5G technology, the glitches or latencies that limit virtual experiences on the phone or with alternative-reality glasses have gone away,” says Téllez. Now, app developers like Niantic can overlay images onto the physical world, smoothly enabling more social and immersive experiences. Imagine, for example, going to a park to play Minecraft with friends and the actual trees become part of your Minecraft landscape.

The speed, versatility, and stability of 5G communications will touch every aspect of our lives, Téllez says. The “smart city” will no longer be just a buzzword. Cameras and sensors will enable near real-time responses to changes in curbside traffic flows or energy use. Tourists could instantly learn about historic landmarks by looking at them via virtual-reality glasses. Commuters will see departure times superimposed onto subway entrances.

“5G promises to completely transform the way people interact with each other and the world around them, says Téllez. “When these two worlds—the physical and the virtual—collide, it will create beautiful new places, and we will all be better off.”

Housing for all

Michelle Boyd, MBA 19, is the program director of the Housing Lab, a UC Berkeley accelerator for ventures addressing the high cost of housing via finance and construction solutions, creative living models, and technology platforms. In California alone, she says, there’s a critical need to build two million houses in the next 10 years. But with the cost of a single subsidized housing unit in San Francisco reaching $1 million, practical remedies can seem elusive.

Still, Boyd sees some promising ideas in her lab, an initiative within the Terner Center for Housing Innovation—for example, Factory OS and Project Frog, which manufacture entire walls and other building components offsite. Terner Center research has found that so-called modular construction could reduce construction costs by 20% or more and building time by up to 40%.

“Many of these exciting ideas are still unproven. No one has really figured out how to build affordably and well in expensive markets.”

—Michelle Boyd, MBA 19

Other solutions include accessory dwelling units, which homeowners install in their backyards and can rent—often at below-market rates because construction costs range from $50,000 to $250,000 depending on locale. Boyd is also optimistic about innovations in finance and construction that can make it easier to build “missing middle housing.” These are duplexes, say, or a fourplex, often built in single-family neighborhoods that mesh aesthetically and can be rented at affordable rates. The idea is to help those who are priced out of expensive markets but don’t qualify for low-income subsidies.

But like many affordable housing solutions, the cost remains high. “Many of these exciting ideas are still unproven,” says Boyd. “No one has really figured out how to build affordably and well in expensive markets.” Even so, she’s hopeful that, in a year of pandemic and protests, local and state governments may finally have the political support to address policies that perpetuate high living costs and the social inequities they perpetuate. “If we play our cards right,” she says, “there’s an opportunity for us to reimagine cities in ways that are more equitable.”