Blockchain as a technology driving multifamily into the future

Dave Marcinkowski is a founder/partner in Madera residence and Quext, focused on creating smarter, healthier apartment communities.

Have you ever tried to explain the concept of cryptocurrencies to the uninitiated? What about blockchain technology and non-fungible tokens (NFTs)? The trials can lead you to annoying conversations where you again have to describe how cryptocurrency works like regular currency but isn’t kept in a bank – defining ideas like fungibility and convincing others that it’s not a scam.

Confusion and skepticism often precede a transformational innovation that becomes a fully accepted and valued norm. Admittedly, cryptocurrencies have seen a few bad apples in the bush recently, but the concept and underlying technology are far from flawed. I and many others believe cryptocurrency will be the next big leap in making payments and storing and verifying transaction information. As more use cases open up, it has the potential to move from the realm of the long-term to become the standard for secure global transactions. This includes the multifamily industry.

Blockchain technology is tailor-made for the multifamily industry.

The multifamily housing industry is one sector that can greatly benefit from blockchain innovation. Some forward-thinking property owners already accept Bitcoin and other cryptocurrencies for rent payments. Others use crypto to invest in new properties and have their transactions securely recorded on a blockchain. When will the rest come on board?

I believe blockchain is ideally suited to handle title insurance, transfer documents and other sensitive data surrounding real estate transactions. With this method, all transaction records are linked together with cryptography and stored in a block on the chain. Once the transaction is recorded, it cannot be changed in any way, ensuring a secure, simple, accessible and visible distributed ledger process. Blockchain provides instant insight into exact transaction date, amount and remaining account balance. There are already 44 million blockchain wallet users worldwide, with over half of them created in the last five years.

In light of rising cyber security crimes, it looks like the appeal and inherent data control behind Self-Assessment Identity (SSI) will drive this trend to become standard practice. Sovereign identities are digital identities that are decentralized. Users are empowered to self-manage their identity and personal information without the use of third-party providers to store and centrally manage their data. Crypto, blockchain, NFTs and SSI technologies are innovations that promise to revolutionize multifamily real estate as well as how we buy and record transactions.

The matrix of features around blockchain technology and cryptocurrencies can create an ecosystem for how we live, buy, invest and achieve personal goals. Use cases go far beyond just rent payments. In the near future, here are the applications I see for these new technologies in the multifamily industry.

• Use of blockchain for signing, registering and submitting housing contracts and other tenancy-related documentation.

• Expanded use of crypto for rental payments and secure transactions via biometrics on smart devices.

• Democratization of real estate investing enabling anyone to make fractional and incremental crypto purchases and trades.

• Tenants invest in their own rental units, which leads to better property management and personal profit if the property is sold.

• Property operators offering crypto and NFT rewards and incentives for on-time rentals, referrals and early renewals in the form of NFTs for furniture, art, community shops and restaurants, on-site amenities and shared ownership.

• Property owners support their locality by delivering NFT pop-ups on residents’ phones to local stores, grocery stores and events, building a sense of community and convenience that appeals to current and potential tenants.

Multifamily operators should not wait to embrace the future.

A multi-family property can become the perfect example of this modernized lifestyle, as more and more future residents will own cryptocurrency and seek environments that accept its use. By the end of 2022, the largest cryptocurrency ownership group will be adults aged 25 to 34, followed by those aged 35 to 44, who also represent the largest demographic of rental ownership.

The multifamily sector should be motivated to embrace a blockchain ecosystem to harness its future potential. Multifamily operators can start today by deciding on and accepting a cryptocurrency for rental payments, experimenting with NFT offerings and incentives, and cultivating a community environment to attract the next generation of tech-savvy and convenience-driven residents. When that happens, before long, you won’t have to keep explaining NFTs because they’ll probably use them themselves.

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