Understanding the Global Aspect of Land Use Model in Real Estate

Zoneomics is a real estate intelligence platform utilizing detailed land-use zoning data for investment analysis and business process optimization.

Zoneomics is dedicated to capturing planning and land-use zoning data from fragmented sources and making these important decision-making datasets available in one place and in multiple formats including a map-enabled Web Platform, quick Zoning Reports, Zoning Data API, and Bulk Data.

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Understanding The Global Aspect Of Land Use Model In Real Estate | Matthew Player & Zain Jaffer

Talk to me a bit about the global aspects here. You've got a lot of experience on an international level. Any interesting insights you can share?

It's very interesting, there are companies tackling this problem. You hit the nail on the head, the problem is unique in the US and potentially Canada because there is still some fragmentation there. Not every city uses the full traditional US-based zoning and land use model. The UK has more of a land-use base case law model. There are some tech players already there that are doing some great stuff with the guys at Landtech, and doing some great things with that over there.

In Australia, I've had some experience with that in a partnership that we did with CoreLogic Australia, getting that information out to the 15,000 professionals that we service there. The issue was very different in Australia because we've got this fragmentation in the US, whereas in Australia, it was much easier. The data capture problem wasn't as big of a problem because we could go to the state government and get a standardized data set across all the cities in a particular state.

Unlike here in the US, when I came over here to tackle a problem, my wife is from New York and she wants to return home, that's when I started looking around saying, “What's the problem here in the US?” When I got my head around how big it was, the fragmentation of the data was such an issue. Another thing globally, a number of African nations like Kenya and Nigeria have used zoning to restrict and control land use. Some Asian countries do it.

There are also some European countries that use zoning, but they are more of a UK-based similar model where it's less prescriptive control of land use and density, and more of an outcome-based and use of case law to do it. Zoning is not a universal thing. It was developed out of the US. It's a US urban planning movement that was adopted by Canada and Australia to a large extent, and some African and European countries, but it's not universal that zoning is used to control land use and regulation.

Talking about the philosophy, why did this movement come? What was the problem that they were solving? For a lot of people, anything involving processes is bureaucracy, which is, “I hate it. I want to get things done.” What was the reason that society brought about this concept of land use and zoning data?

Zoning is not a universal thing. It was really a US urban planning movement that was adopted by Canada and Australia.

The UK had planned garden movement and planned real estate movement. Urban town planning in the UK was where that developed out, but it's merged into a different format, which we expressed. The real traditional, straight prescriptive zoning comes out of the US movement, it was really from an environmental point of view.

Being able to make sure that your housing wasn't right next to the factory that was pumping out smog and sanitation. We had the sprawl element in the car and then we were building towns straight from farms and so this plan was restrictive being able to say, “We want our industrial over here. Our commercial over here. Our residential over here. We want to split them up.”

We've since learned things, in urban planning, there's always a new movement about trying to think better about how we live, and maybe that wasn't so right to split everything up. It didn't allow for permeability on places that people found that were lively and fun and encouraged investment. That's why we still go back to the cities like New York where a lot of the development took place pre-zoning or Boston pre-zoning because we still mix those uses.

We're learning better things about how to zone not so prescriptive, and there are different models with that. There also is a bit of a darker side to zoning. Unless there is a movement, there are some investigations in the fact that it may have been used for not just discriminating against certain land uses that you wanted to take place to keep the industrial away from the residential. It also may have been used in many cases, as a way of being prejudiced against minority communities in certain areas.

There's documented evidence of it being utilized in certain ways. Hopefully, not as much in zoning codes now, but maybe in previous codes around the 1920s and ‘50s, where it was used like how redlining may have been used, but also how zoning could have been utilized to prevent a lot of low-cost housing and affordable housing and restrict certain things. That is something that’s being looked at heavily, and doing a lot of investigation into whether single-family zoning is causing some prejudice.

We had Jeff Wilson, the Founder and CEO of Jupe, on an earlier episode where we talked about this is one of the problems that exist and the inherent racism in zoning and real estate. I encourage people to search for that. There is a dark side indeed. Staying on the more optimistic route, it can be any place or state, where has zoning been done well? Could you give an example? Related to that, what is the right way for zoning to be in terms of the policies and the way it's done? Could you walk us through your philosophy? Can you give an example?

There are a number of different philosophies. There's prescriptive zoning. There are a number of different ways that we zone. It depends on the city's needs and dynamics. One new code that was adopted that is very forward-thinking is the City of Miami’s zoning code that they adopted in recent years. It's less focused on keeping your industrial development away from your residential, single-family, and commercial. It's more focused on the outcome and keeping your densities to the way that you want to keep it in a particular city.

Certain heights, the tower buildings you want to keep in the CBD area. If you have a precinct that's maybe underutilized, you could keep a mixed-use. Maybe it won't be as dense as in the more traditional areas where you'd expect a mixed-use building, but it will liven up that area and allow for more revitalization of the city.

I'm not saying that Miami City was zoned properly from the beginning, but they're doing some inroads into making it the way it should be. Seattle is another one that's very forward-thinking in the way that they are zoning for redevelopment, and being in touch with where the community wants and how to make a livable city.

Thank you for sharing that.

One thing they have to look at is a small village or town that doesn't have the population that you would have of a Seattle or Miami. They don't have the same zoning demands and needs of a city like Miami or Seattle. It depends on the needs of the city.

Shifting to a different topic. When we look at the technology involved in a company like Zoneomics, one key thing we haven't talked about in any episode yet is this concept of GIS. I'll let you define it for us. It's critical because it's one of these technologies that fits prop tech very well. Many use cases in real estate exist because of a Geographic Information System, GIS. Do you want to explain to our readers how you would describe GIS, and how you're using it?

GIS is really key to future-proofing land.

Pretty simply, they are using a GIS system every day when they go into Google Maps. It sounds simplistic, but it's one of the most advanced GIS systems in the world. That's being able to represent real-world information digitally on a map and be able to make it usable to be able to display information. We use a whole bunch of different GIS systems. One is cloud-based and a leader in the industry, Esri, and you've got CARTO, which is doing some great inroads with Cloud GIS. There are some open-source ones like QGIS and GRASS GIS.

It is used to perform analysis on a map-based level so that you can determine things about that land with latitude and longitude, which is the key. Tying that data set to a lat and long, so it's location-based, whether there will be a pinpoint of the latitude and longitude or it's a polygon. We deal with both but obviously from a zone map, you're talking more polygons on a map.

Esri is one of the most fascinating companies run by a husband and wife. They've built it to an incredible scale to the point where Google tried to compete with them once. Esri ended up licensing and powering a lot of Google’s software. Esri is such a beautiful company in terms of how big they’ve become, hundreds of thousands of customers and powering technology for all of us.

As you said, we use a GIS system every day. These guys pretty much invented the concept of a GIS back when no one even knew what GIS would be. A beautiful story, I understand they're completely bootstrapped as well. They didn't go and raised typical funding. It’s completely family-owned, which is a dream for everyone in the technology industry. You don't need to work with investors and give them ownership. I'm a VC, I was an entrepreneur once too, we can add a lot of value. As a founder, if you can do it by yourself, that's the dream.

They've done it globally. Esri is a giant in the space.

There are use cases for GIS in every area you can think of. We're talking about real estate, but governments use this. You need this for looking at electricity, natural resources, water, gas, manufacturing, public safety, transportation, and every element.

Climate change planning and analysis. GIS is a key tool to see future proofing land and even delivery of infrastructure investment.

To dive into that a bit more, I'm fascinated by GIS because a lot of technology is very back-end focused. GIS is one of those things that is very visual, you can see things. For anyone interested in coding, I've been doing this myself. I learned to code from scratch, self-taught, after I sold my company, by the way, so that signals to you why I am a big proponent of technology and being hands-on on the engineering side.

I ran a company, I took it to an incredible scale, eventually it exited for hundreds of millions of dollars. One weakness was that I didn't focus enough on the engineering side. One thing I did was I spent a lot of time getting hands-on engineering. I taught myself some Python. I loved experimenting with the different GIS technology out there. It's beautiful. You can suddenly overlay something and put it on the map with a few lines of code.

It's very motivating when you're learning to code to see your results on the screen. GIS is one of those things where it's very easy to showcase to someone else. In your case, you've got all this data. It's disparate, it's all over the place. What better thing than showing it to someone on a map where they can zoom in and they can see the zoning information by the city, by the lot, by the street, or by whatever way you want to go in and out.

It's funny, that was my connection. A little bit of background, I did an Urban Planning degree, and there's not much coding in there. I found that I completely didn't have a tech background, but largely, I usually introduce myself not having a tech background, but GIS was my window into that. I did it at university and then practiced with it.

You instantly are able to see the work that you're doing on a map. It's a great tool to be able to work with it. It was my way into this. When I was envisioning the problem, GIS was my immediate way of saying, “It’s got to be a tech-based solution.” GIS was my overseer. That was also my connection with my co-founder. That's how we're able to communicate with each other. Him having a Computer Science degree and a GIS-based degree, it's how initially we were able to communicate on the same level through that GIS.

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About Zain Jaffer:
Zain Jaffer is an accomplished executive, investor, and entrepreneur. He started his first company at the age of 14 and later moved to the US as an immigrant to found Vungle, after securing $25M from tech giants including Google & AOL in 2011. Vungle recently sold for $780m.

His achievements have garnered international recognition and acclaim; he is the recipient of prestigious awards such as “Forbes 30 Under 30”, “Inc. Magazine’s 35 Under 35” and the “SF Business Times Tech & Innovation Award”. He is regularly featured in major business & tech publications such as The Wall Street Journal, VentureBeat, and TechCrunch.