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Property faces ‘real problem’ by neglecting data ethics

After a year of lockdowns, tech solutions – whether they’re as simple as a Zoom call or as complicated as a security platform that can monitor a tenant’s location and temperature – have rapidly become not just useful but necessary for real estate.

But amid the buzz around what we can do with property innovations, one question has received less attention: should we be doing it? Backed by some of the biggest names in the industry, the Real Estate Data Foundation has formed a group to change that.

“Real estate is on a very long journey and coming from behind, but doing a great job of embracing technology and data,” says Dan Hughes, founder of the RED Foundation and a member of its recently launched Data Ethics Steering Group. “However, I think we don’t consider the wider picture of what we’re doing.”

The RED Foundation, a non-profit started to connect and join up conversations around data across the industry, announced the Data Ethics Steering Group last week as a way of  conversations around the ethics of how we use and collect data.

The group, which counts industry professionals from Knight Frank, LendLease, WiredScore and RICS among its members, has a list of principles it urges the industry to sign up to as a guide to collecting and using data in an ethical way.

Hughes says: “My concern is real estate says: ‘That’s a really big and complicated question, so let’s deal with that in five years’ time.’ And in five years’ time, it will be a much bigger, much more complicated subject.

“If we don’t consider it now, in the future, it’s going to be a real problem.”

Why does data ethics matter to property?

“Buildings are going from concrete blocks to digital platforms. We’re putting sensors everywhere. They’re becoming smart buildings, and that’s all amazing,” Hughes says. “But they’re becoming the same digital platforms that we have in our hand with a mobile phone or a website.”

Dan Hughes

Dan Hughes set up the RED Foundation to help the industry address the challenges of the data era

Digital advances mean that real estate is starting to face the same challenges industries like social media face by collecting and using people’s personal data. Between high-profile security breaches that have left users’ data vulnerable and the use of personal data for targeted political influence, how businesses choose to use the data they collect has had a real impact on their reputations.

“There are lots of case studies of people using data in what most people would consider a relatively unethical way,” Hughes says, though he adds that, from a real estate point of view, he has not come across anyone necessarily trying to do the wrong thing. Real estate simply isn’t asking the questions it should.

That can come back to bite the industry because people – staff, customers, clients, society – expect businesses to responsible for what they do. Real estate can be good at considering ethics, Hughes says, pointing to the importance of ESG, but it needs to extend that to data. Businesses that neglect it risk facing fines for breaching data regulations and damage to their reputations. “We have work to do on our reputation as a sector in society in general,  and I think how we use data going forward is going to be incredibly important for that.”

One example he gives where this could become an unavoidable question is the future of office valuations. If the future of offices is about staff productivity, health and wellbeing, it makes sense that the data behind those metrics feeds into the valuation process. But if that is the case, the industry needs to ask itself how exactly that personal data is used, who has access to it and in what capacity and whether it should be shared at all.

Although he has a personal view on that, Hughes says: “With a RED Foundation hat on, I don’t think it’s our position to say ‘that’s right’ and ‘that’s wrong’, because I think it depends on different circumstances.” What is important, however, is that the industry is transparent and communicates what it chooses to do.

Six principles to help navigate ethical grey areas

If the owner of a block of flats decided to install CCTV in every tenant’s home, most people would find that an invasion of privacy. But if a retirement home did the same thing, while ensuring that the data collected is discreet and anonymised and residents were aware of it, would that be a problem? What if that leads to greater independence for those residents?

Those two scenarios, Hughes says, are very different with potentially different answers to what is ethical. That reveals a fundamental complication: the answer to what is right and what is wrong will differ between use cases, asset classes and occupiers.

To help businesses think about what is and what isn’t ethical, RED Foundation has a list of six principles to guide those discussions:

  • Accountable for the data collected and used: This includes taking responsibility for using the data in an appropriate and secure way
  • Transparent about what is collected and why: While this cannot be expected for every data point, at a minimum a general data policy should be published for each building and company explaining what is collected and why
  • Proportionate: Not only should data be collected within legal and technical requirements, but is also proportionate to the benefit and the expectations of wider society
  • Confidential and private: All activity with data should at all times consider confidentiality and protect privacy, both within necessary legal requirements but also according to the expectations of wider society
  • Lawful: All data should only be used within relevant local and international laws and regulations
  • Secure: Security principles should be built in ‘by design’ into all applications and appropriate steps should be taken to keep data secure

Hughes calls these principles a “very first small starting point” for the conversation around data ethics. He expects that, as the industry gathers greater amounts of data, making ethical decisions will become a core part of a human’s role in real estate.

“A huge amount of the future of a property professional, for example, will be that human judgement,” Hughes says. If the industry continues to innovate, it cannot shy away from grappling with what’s right and wrong in using data. The pressure to do so will only grow. Start asking the right questions now, the Data Ethics Steering Group urges, and you will be better equipped for the future.

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