So on Monday the stockmarket crashed again – in case you’ve been living under a rock, here is what happened, ‘the Dow Jones Industrial Average saw its biggest one-day point drop in history, and the S&P 500 had its worst day since 2011’. It even beat the record set during the 2008 Financial Crisis.
The last financial crisis in 2008 left a massive housing problem – homelessness spiraled, and around 11 million homes became vacant across Europe, and around 18.5 million homes vacant across the USA. Most of these vacant houses are owned by banks, who repossessed the homes through forced evictions when people defaulted on their mortgage payments.
Will this latest stockmarket crash add to this ever growing list of vacant homes owned by the banks across the planet? And will any lessons be learnt from the 2008 financial crisis, so that something can be done this time around about all the vacant homes owned by the banks?
These vacant housing numbers astound social and housing activists, with reports saying that vacant homes outnumber homeless people in USA by 6 to 1, and in Europe its around 2 to 1. And then there are all these problems such as mafia blackmarket renting, and eviction court cases, and crime and so on.
In 2014, Governments in Europe started waking up to the fact that an economic crisis leads to a housing crisis, as homeless numbers spiralled everywhere. Some EU governments even went so far as to actually do something about this housing crisis too, such as Barcelona City Council which started handing out fines to banks that did not fill vacant houses through passing new laws. The European Parliament estimated that 500,000 families in Spain have fallen victim to forced evictions during the crisis, and currently there are over 3.4 million homes vacant in Spain, the worst vacancy rate in Europe.
Barcelona City Council started handing down fines to banks in 2015, starting at €5000 per house vacant for over two years, aimed at forcing banks to make use of empty properties. Those fined have a month to find tenants or face an additional charge of €10,000 (£7,300). If no action is taken after two months they could face another fine of up to €15,000. “Public authorities have an obligation to use all possible resources to confront the housing emergency,” Barcelona’s mayor, Ada Colau, said as she announced fines on Spanish banks BBVA, Banco Sabadell and Sareb.
But will these fines force the banks to rent out their vacant properties? Real estate management is typically a non core business for financial institutions. Banks don’t know how to manage rentals, and don’t want to manage rentals.
What the banks need is some sort of new, automated rental management system so they stopped getting fined from Governments, and so they can start collecting rent, whilst not having to be the 'typical real estate management agents'.
This is where IoT comes in. IoT can be about knowing where your stuff is at, connecting it to the internet, and drawing intelligence and value from it through connections.
With connected security systems composing of smart locks, alarms, sensors, monitors, cameras and the like, banks can do things such as enabling prospective renters to go online and get a one time digital key to let themselves into a property for say 30 minutes at a time to do their own ‘self open inspection’. Connected alarms can go off if the tenant doesn’t vacate the property within 30 minutes. Access to the property can be connected to rental payments. Digital Keys can easily be cancelled online if payments are not made. Payments to utility companies can also be connected to direct debit of bank accounts. Lease forms can be downloaded online and digitally signed without need for humans to be involved. Maintenance issues can directly reported by tenants taking photographs and sending messages directly to approved plumbers or repair men. Nurses and social workers, and approved repair man can go online and download digital keys to help them access the properties for repairs, or to help the sick, elderly and the disabled in emergency situations, or for regular visits. The list goes on and on. So how about it banks, are you ready to turn to IoT to help you become new age rental property managers?