The real estate industry can simultaneously combat inequality and boost property values by improving broadband access, according to a new report from the Urban Land Institute (ULI). ULI is a global, member-driven organization comprising more than 45,000 real estate and urban development professionals dedicated to advancing the Institute’s mission of shaping the future of the built environment for transformative impact in communities worldwide.
The new Broadband and Real Estate: Understanding the Opportunity report, from ULI’s Curtis Infrastructure Initiative, makes clear that high-speed internet is no longer a luxury but a necessity for participating in society and the economy.
“The COVID-19 pandemic turned the world upside down,” said Craig Lewis, chair of the Curtis Infrastructure Initiative Global Advisory Board. “Virtually overnight, the internet became our primary means of working, attending school, seeking healthcare, and so much more. Everybody deserves access to the opportunities the internet provides, and this report shows us how we in the real estate community can help make that happen.”
The report’s key findings include:
- Broadband is Essential: Efficient and equitable broadband is necessary for innovation and the adoption of new technology and uses. Without adequate fiber connections, emerging internet uses within the real estate industry like proptech, rideshare, or smart cities are not possible.
- Universal Value: Widespread broadband adds value to every sector of society, including the real estate industry, which can expect higher rates of return on projects connected to high-speed internet.
- The Digital Divide: Policymakers and industry must address inequities in internet access. Rural communities face a lack of accessibility and urban communities face a lack of affordability of existing services and quality resulting in “digital redlining.”
- Role of Real Estate: Developers can lead by using their influence with regional planning authorities and internet service providers to both improve their return on investment and address the digital divide.
- Don’t Get Lost in the Weeds: Real estate owners and developers do not need to understand every technical detail about connectivity to apply its value to their projects. Connectivity should not be a specialty area, but rather a key part of the development process for all projects.
- Inadequate Regulation: The need for high-speed internet is expected to grow in the coming years, and government definitions of acceptable download and upload minimums have not kept up with the needs of the community.
- Understand Your Need: There is no one solution for addressing the digital divide. Each community will have to identify what works best for them based on their needs. This will help to develop a plan with achievable goals that leverages effective coordination and partnerships.
The report also highlights real estate and community initiatives that have expanded broadband access in different cities — and therefore increased real estate desirability and digital resource equity.
- National Landing, Virginia, is using access to top-tier connectivity as an incentive to draw tenants to their properties and neighborhoods. In 2020, JBG SMITH, a predominant landlord in the area, bought seven blocks of Citizen Band Radio Spectrum from the federal government. The $25 million upfront cost will likely pay off by branding National Landing as the optimal place for tech-savvy entrepreneurs, universities, and technology companies who need guaranteed high-speed broadband.
- In 2019, the Sinclair Hotel in Fort Worth, Texas, implemented Power over Ethernet (PoE) technology to increase efficiency and reduce costs across the entire building. With PoE, a single ethernet cable transmits electrical power and data throughout the building. Any power or internet failures throughout the building register at one central node. That makes repairing a burnt-out light bulb or malfunctioning television faster and easier. Additionally, PoE runs on low-voltage electricity, which reduces energy expenses by 14 percent and cooling expenses by 10 percent.
- The local utility in Huntsville, Alabama, built a city-wide fiber network to boost the speed and capacity of its water and electrical services. It then leased extra strands of fiber to internet provider GoogleFiber, private businesses in the area, and government entities like the public school system. GoogleFiber’s 20-year lease alone will cover the utility’s cost of building out the fiber network. The investment proved a win for the utility, the community institutions that gained high-speed internet access, and the entire city, which is now much more attractive to future industry.
“Communities across the country understand that broadband is the critical ingredient for increased economic opportunities and the future of real estate development,” Craig Lewis continued. “Broadband has become an essential utility for every project—just like water and power. It is the backbone for all building communications and tenant expectations. But access is not enough. It must also be fast, reliable, and future proof.”
The full Broadband and Real Estate: Understanding the Opportunity report is available on ULI’s Knowledge Finder. Learn more about the Curtis Infrastructure Initiative here.