Beyond the Rent is Multifamily Dive’s analysis of the trends driving supply, demand and operations in the apartment industry.
As an avid sports fan, it first registered that the machines could be coming for me in the 2010s.
That’s when some outlets began relying on computers to produce automated game recaps from a simple box score. If you don’t believe me, read this New York Times story from 2011.
But, as a real estate journalist, I felt relatively insulated. I had real sources and some market knowledge. No machine can write those long-winding, 2,500-word pieces to nowhere about the need for sprinklers in single-family homes or REIT consolidation and privatization (the gift that keeps on giving) as expertly as I do, I thought.
Then, a few years ago, ChatGPT launched, and things got a little more real. I played with various prompts and found that it could do research and spit out answers in mere seconds. It even helped me connect the dots on some news stories.
Earlier this year, the AI sirens grew louder, including the Citrini Research report saying advanced AI could push unemployment to 10%, as the firm took a peek at what the employment market and stock markets could look like in June 2028. I had no idea what Citrini Research was, but discovered in The Wall Street Journal that founder and primary author James van Geelen publishes macro and thematic stock research and gained a following after publishing investment opportunities related to AI and weight-loss drugs .
When markets stumbled for a brief period of time after the Citrini report, I took note. And I began to wonder if the apartment industry that I covered was watching.
My inbox was filled with announcements about this AI-enabled operations system or that AI-powered fraud-screening system, so I knew the industry was using it, presumably, to become more efficient in operations, dealmaking and gatekeeping.
But were they really paying attention to that other side of machine learning? You know, the part where other businesses are also using it as a cost-cutting tool, which threatens the jobs that multifamily owners rely on to produce monthly rent payments?
The AI threat
So I began asking the question: How is the threat of AI-driven job loss influencing acquisition and development decisions? I started with an executive at a prominent developer.
“It's really not something that I have thought too much about, and that may be a bad thing,” he said. “But, yeah, we're still, like always, just focused on increasing market share and continuing to try to source really good projects that make a ton of sense.”
I continued to ask that question and continued receiving the same response. I posed the question to Haendel St. Juste, a longtime apartment REIT sounding board for me. He, like others who make their living studying the markets, was keenly aware of fears of an AI jobs apocalypse.
“Demand can change pretty quickly and overnight, if you’ve got companies cutting 40% of their workforce,” St. Juste said.
I followed up with: Why aren’t the apartment owners, developers and managers paying attention?
“They can't worry so much about this scenario or that scenario,” St. Juste said. “They have to keep their portfolio full and collect rent and optimize their NOI. But, yeah, the world is changing.”
His answer made sense, but puzzled by the potential disconnect between market fears and the industry’s on-the-ground realities, I started to let the story go. Then I saw this post shared on LinkedIn by none other than Patrick Carroll, who cited job cuts at Meta and Block blamed on AI, though there is some disagreement about the real cause. Finally, I saw someone asking the question.
“This is not a tech story,” Carroll said on LinkedIn. “This is a housing story. And nobody in multifamily is connecting the dots.”
A jobs apocalypse?
Wanting to be a connector of dots, I reached out to the controversial Carroll. He told me much of the same over the phone, lamenting that the industry was sleeping on the risk of job displacement.
“If you just said, ‘Listen, 20% or 30% of your tenant base is going away,’ maybe people would pay attention,” he said.
Message received. But after that call, I wondered who was right. Is it Carroll who sees a threat that could upend the apartment business? Or is it those operators across the country who haven’t yet seen job displacement in their portfolios? Or maybe they both were right.
But where could I go for that definitive answer? Ahh, yes, ChatGPT. “Yes — eventually, I think AI-driven job displacement will become a meaningful issue for apartment owners,” it told me.
But ChatGPT doesn’t think it will look like the overnight “jobs apocalypse” that gets attention on social media or in my articles, apparently. “The biggest risk to multifamily isn’t that millions of people suddenly stop paying rent. It’s that AI gradually weakens the pipeline of high-income renter households that have disproportionately supported Class A demand in certain markets,” it said.
So there you have it – a gradual weakening over time. It isn’t exactly a comforting message, but ChatGPT can also be wrong, according to CNBC (and many others). So while we all wait for this thing we’re not going to call a jobs apocalypse, I’m inviting you to reach out to me. Are you seeing signs of AI job loss in your portfolio? What other threats or opportunities do you see?
Any insights would be appreciated, as I plan to write more columns on AI and other hot-button industry topics.
That is, until the machines start writing for me.
