The “sharing economy” is impacting businesses, communities, individuals and the built environment around the globe.
WHAT IS THE “sharing economy,” and what will it mean for commercial real estate? A new white paper prepared for and funded by the NAIOP Research Foundation describes this emerging and growing economic system, which prioritizes access over ownership. Companies and organizations all over the world are exploring new ways to provide access to goods and services, often through networks of individuals connected via the Internet and mobile apps. These systems enable people to make use of excess capacity while avoiding or minimizing many of the burdens — storage, maintenance and operating costs — associated with ownership.
“Exploring the Sharing Economy,” by John Madden, director of sustainability and engineering, Campus + Community Planning at the University of British Columbia, examines the impacts this nascent economic force is having on transportation, food systems, housing and short-term accommodations, and commercial space.
“The sharing economy is characterized largely by peer-to-peer market-places,” Madden notes. “These marketplaces facilitate transactions in which individuals can share products and services directly, based on a foundation of trust.”
Key drivers that have helped catalyze the sharing economy, according to Madden, include the following:
- The Internet and mobile access.
- Declining real incomes.
- Belief in the commons — a sense of shared responsibility for the betterment of the community and the environment.
The white paper describes how the sharing economy is affecting personal transportation, explaining how car-, bike- and ride-sharing and ride-hailing platforms like Car2Go, Zipcar, Citi Bike, Uber and others are changing how people travel within urban areas, with potentially huge impacts on land uses. It describes how other elements of the sharing economy, including community gardens and rooftop farms, shared housing and cohousing, and short-term accommodations platforms like Airbnb and Roomarama, also are beginning to have an impact on the broader economy.
Finally, Madden describes the sharing economy’s expansion within the commercial real estate sector. “In some cases,” he notes, “the goal is to make better use of fixed assets that traditionally have been used only for certain periods of the day. The sharing economy makes better use of those fixed assets by matching people with spare space. Many forms of shared commercial space use have emerged, including various types of shared office spaces and creative spaces.
“Shared office spaces include the executive suites model (where companies or individuals can rent a turnkey office or space in a shared office on a short- or long-term basis), coworking centers (which offer similar types of workspaces, typically through a membership model, and have a greater focus on community) and an emerging hybrid of the two.”
“The sharing economy has flourished in the absence of government policy drivers, incentives and regulations. It is, however, posing some challenges to local regulators, who must find a balance that protects the public interest without suppressing the potential benefits of new business models. It demonstrates that small-scale entrepreneurism and altruistic attitudes can lead to more rational uses of scarce resources while providing economic, social and environmental benefits,” the white paper concludes.
For more information:
“Exploring the Sharing Economy,” John Madden, NAIOP Research Foundation, April 2015.