Net neutrality repeal impacts property management and real estate companies in 1 major way

Megan Wild
Megan Wild | 5 min. read
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Published on January 9, 2018

Last week, the FCC voted to repeal net neutrality rules established under President Obama. These rules formerly prohibited internet service providers (ISPs) from deliberately slowing down access to some websites, while allowing faster speeds for those who are willing to pay a premium for upgraded access to those sites.

This ruling, which 8 out of 10 Americans opposed, may spell disaster for many small businesses–and real estate and property management companies in particular. Allowing ISPs such as Comcast, Verizon, and AT&T to slow down access to certain sites–or ban access altogether–could destroy valuable and inexpensive marketing techniques that small businesses use to market their products to consumers.

Previously, net neutrality regulations prohibited ISPs from using streaming data obtained from consumers to block access to competitors’ websites. They also prohibited them from forcing consumers to utilize specific services or pay higher package prices to access certain sites on the web.

So, many property management and real estate companies are asking, how will net neutrality affect apartment listings? The repeal of this legislation means that property managers and real estate professionals who rely heavily on websites to market their listings will not be able to reach the same number of consumers that they were previously able to. ISPs will be able to limit access to these sites at their discretion. They may block access altogether, or slow down load times so significantly that many consumers will give up rather than wait.

How Will Net Neutrality Affect Apartment Listings?

The ruling on net neutrality affects all small business owners. However, property management companies may get hit harder than many other types of businesses.

Property management companies often handle both single- and multi-family rental properties as well as apartment and condo complexes. While it is true that some consumers choose to rent out of convenience, in many cases, rental properties are inhabited by lower-income consumers who lack sufficient income, credit, or down payment to purchase a home.

Because property management companies often market to lower-income consumers, restricting access to their sites will indubitably be bad for business. Many consumers in low- to mid-income brackets will not be able to afford upgraded internet premium services, which will allow access to sites such as Realtor.com and Zillow. Fewer views will inevitably mean that more properties remain vacant, costing property management companies money.

Also, many smaller firms have raised concerns about their ability to access these sites for their work. While larger companies may have the requisite capital to pay high internet service fees to access these sites, smaller firms may find themselves dedicating significant portions of their budgets to ISP fees, only to reach a smaller consumer base. Over time, this will impact their bottom line and their ability to stay in business.

Firms that rely more heavily on technology will be affected more severely. Many small property management companies offer convenient tools to consumers, such as mobile apps that allow them to map out and visit numerous properties in the same area when seeking a new place to live. Users of these apps may face higher fees, and the firms themselves may also need to shell out additional money each month to keep their technology useful and viable.

The National Association of Realtors (NAR) has opposed the repeal of net neutrality rules from the beginning. In an open letter to FCC Chairman Ajit Pai, the NAR stated that 93% of all real estate brokerages and property management companies rely upon technologies like apps and drones that require an open internet to work properly. Only 2% of surveyed businesses indicated that they had no web presence.

Without access to a free and open internet, mom-and-pop businesses will face difficulties. Many sole proprietor realtors and property managers who rely on free sites to market their properties may find access to such sites throttled. The FCC ruling spells disaster for firms who depend on free-flowing internet traffic to market their properties.

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What’s Next in the Fight for Net Neutrality

The National Association of Realtors isn’t the only body that has challenged the recent net neutrality ruling. Multiple organizations have filed lawsuits against the FCC in response to their repeal of net neutrality rules. New York Attorney General Eric Schneiderman has filed suit; and to date, 19 other states have done the same. It is yet to be determined how the FCC’s ruling will play out in court.

The ruling will also be debated in the halls of Congress. Senator Ed Markey of Massachusetts has promised to introduce legislation challenging the FCC’s decision. More than a dozen other lawmakers have signed on in support of the pursuit of net neutrality.

Some states are taking action to preserve net neutrality rules by introducing their own versions of state legislation that will, in effect, restore net neutrality for citizens of their respective states. California and Washington have already begun writing bills to replace the net neutrality rules. FCC agency officials have, however, vowed to take federal action to stop such legislation.

A free and open internet is essentially the world’s most expansive public library. Other countries, such as Portugal, have already experimented with removing net neutrality rules, and the result is higher costs for internet service overall. If smaller businesses, particularly property management companies, are to survive, it is imperative that these rules are restored. Otherwise, once again, small businesses will lose to big corporations.

How will net neutrality repeal affect your apartment listings? Find out on the #BuildiumBlog! Click To Tweet Read more on Marketing
Megan Wild

Megan is a freelance writer who specializes in real estate, home improvement, and coffee consumption. Follow her on Twitter @Megan_Wild, or subscribe to Your Wild Home's weekly newsletter.

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