The Exchanges

Q Why don't you go deeper in terms of what are the unlocks to actually improve housing affordability? Or why don't you give some more context on the problem?

A Well, for housing affordability, housing supply matters most of all. That's the single greatest determinant of housing prices. So one, we know that we need to, we need to build way more units. We're about five million housing units short of what we actually need in the country, and we need to add somewhere between 1.8 to two million units per year just to kind of keep that shortage from getting worse, let alone making up for that deficit. We've only developed about one and a half million units last year. So we actually need to increase our delivery by about. And, um, actually, analysts say that the pipeline is shrinking for twenty-twenty-six and beyond, so, um, they said it's gonna drop by about 50%, so we're headed in the completely wrong direction. So, housing supply matters, but in, in the short term, we can actually get more out of our current supply. So, I'll give you an example, which is almost half of, half of inquiries that go to a rental apartment building Never get responded to. So we, you've all experienced this, right? We've all experienced this, that we send a, you know, we, we want to look at an apartment, but no one, we get ghosted. No one responds to us and that apartment's still sitting there available and you want it, but it's being underutilized just because the process is broken. And so, um, if AI is managing all that demand, we can actually turn vacant apar…

AI assessment note: “for housing affordability, housing supply matters most of all.”

Q Why don't you talk through where we are today in terms of what's, what's been automated, what's not yet automated, and then we can get to what, what is the, the, the full vision? And, uh, in that full vision, what do humans do?

A A lot has been automated. I mean, maintenance, you'd have physical boards with covered in post-it notes with people trying to keep track of what needs to be done. Now that can be automated, um, triaged by AI prioritized based on urgency of those issues routed to the right technician tracked everything automatically. And we see that some operators with this new, these workflows have cut average work order completion times from Four to five days down to under 48 hours, so that's really meaningful for residents. Leasing was pretty, was maybe one of the worst. It was people just spending entire days answering emails, the same 50 questions over and over and over all day long, and, um, just the same basic information, and now AI can obviously handle that and complete that. Uh, those tasks with all of the knowledge of a building or all of the knowledge of a portfolio. Touring was another area of automation. So you'd have to go meet a broker or go meet a leasing agent and be physically escorted to every single showing. But now you can, AI can give you access or you can get access through You know, smart hardware, smart locks, lock boxes, and the AI can still be there to engage and answer all those questions and do the selling. So, um, that gives you a ton of benefits and efficiencies where you're not just having, you're paying a whole human just to unlock a single door and, um, actuall…

AI assessment note: “A lot has been automated. I mean, maintenance, you'd have physical boards”

Q Why don't you guys give us, give us a brief background or give the audience a brief background on, on, on why Elyse AI, why housing, why healthcare?

A We wanted to use AI to solve real world problems, and housing and healthcare are the biggest expenses that people have. They eat up about 42% of what a typical household makes, and, um, nationally these sectors make up about 40% of the entire GDP. So it's pretty obvious that we need to figure out how to cut waste in these industries. It was pretty crazy to us that not enough people were working on these problems. Top technology people, for example, are not asking the hard questions about how can we actually fix it? It's just sort of an accepted tax that we all pay. So we started digging a lot deeper into how these systems operate. And once you do that, You can see inefficiencies everywhere you look. And those really add up to huge costs to all of us. And it's also not just about the money, but the quality of these services has a really big impact on people's lives. Um, and when they fail, it doesn't just hurt individuals. It actually hurts kind of society as a whole. So really fundamentally important problem for us to solve.

AI assessment note: “housing and healthcare are the biggest expenses that people have.”

Q Why don't you go deeper in terms of what are the unlocks to actually improve housing affordability? Or why don't you give some more context on the problem?

A Well, for housing affordability, housing supply matters most of all. That's the single greatest determinant of housing prices. So one, we know that we need to, we need to build way more units. We're about five million housing units short of what we actually need in the country, and we need to add somewhere between 1.8 to two million units per year just to kind of keep that shortage from getting worse, let alone making up for that deficit. We've only developed about one and a half million units last year. So we actually need to increase our delivery by about. And, um, actually, analysts say that the pipeline is shrinking for twenty-twenty-six and beyond, so, um, they said it's gonna drop by about 50%, so we're headed in the completely wrong direction. So, housing supply matters, but in, in the short term, we can actually get more out of our current supply. So, I'll give you an example, which is almost half of, half of inquiries that go to a rental apartment building Never get responded to. So we, you've all experienced this, right? We've all experienced this, that we send a, you know, we, we want to look at an apartment, but no one, we get ghosted. No one responds to us and that apartment's still sitting there available and you want it, but it's being underutilized just because the process is broken. And so, um, if AI is managing all that demand, we can actually turn vacant apar…

AI assessment note: “for housing affordability, housing supply matters most of all.”

Q You mentioned we're going in the wrong direction. Can, can you share more about why that's happening and, and what are the sort of biggest, uh, regulatory or technological bottlenecks that, that need to be, uh, addressed for that to change?

A There's a lot of regulation, um, a lot of zoning laws that cause parts of this problem. Um, but even relaxing regulation will not solve that problem by itself. We also need more capital flowing into housing construction today. And that's a big thing that we think about internally at Elise AI. Capital flows where there are the highest returns and, um, Right now, housing has lower returns relative to other asset classes, but, um, we're actually enabling housing to achieve higher returns because we're creating these 10 X better housing operators that return higher profits to investors. You know, if housing is a stable and, and a higher return investment, how much more capital would be flowing to kind of this, this most fundamental need for society. So, Um, you know, that's, that's really great for everyone because it drives more supply into the market and, and supplies is really king to fixing the housing crisis.

AI assessment note: “a lot of zoning laws that cause parts of this problem.”

Q And how about the second part of the question in terms of, okay, your, your vision comes true in terms of, uh, you know, fully autonomous or fully automated housing. Uh, right now there's a lot of people doing a lot of those activities or, or, or some of them. What do they go do?

A I think as AI takes over a lot of the communication and logistics, human roles don't all disappear. Uh, they just, these sort of AI enabled career paths start to emerge. And I think you're seeing this in other industries as well. I think expectations are higher. Um, people like you mentioned earlier expect that renting an apartment is Super easy, super frictionless, and it doesn't require extensive human contact for basic stuff, and that's a great opportunity for AI. So I think you'll see that these career paths are, in the short term, menial parts of the job go away, and people are spending time focusing on building relationships with residents, creating communities. I think people are spending more time at home, right? They're, they're, they're working at home, their home is their office, like you still need this, This human connection, and a lot of our customers we see that are creating roles like community engagement and helping people, ah, people socialize. Um, I think people will specialize tracks, so you might become, instead of this sort of generalist on site doing everything menial and, ah, and complex, you'll actually see a lot more specialization, and you might become a renewal specialist who handles the trickiest retention cases, or, A resident experience specialist that resolves conflicts. Um, but I think in the long run, people will be managing big workforces of A…

AI assessment note: “these sort of AI enabled career paths start to emerge”

Q let's say, you know, 10 years from now, we, we have robotics, you know, we've made some major advances in longevity research. Um, we have AGI. Um, but when you paint, what, what's sort of the, the experience going to look like, or how are those, um, impacts the, the ones that I, that I mentioned, at least robotics and longevity, going to impact the, the, the marketing asset class?

A I think the population is going to change a lot with AI. Why I kind of talk about longevity is I think a lot of AI research is and should be going to extending human life. But if obviously if you're living longer, there are more people around staying around longer. And, um, you know, we talk about cost of living a lot. Cost of living is actually one of the, it is the number one reason that people don't have more children. If AI creates a lot more wealth in the world and it brings, and you know, it, it, it does things like bring the cost of living because of the efficiency is similar to what we work on in housing and healthcare. People have more kids. Again, you have more population. So all of these things I think will really affect, um, will really affect the housing market because all those people, this is a fundamental need for all those people. So, um, yeah, we have to find efficiencies, uh, Kind of, as I mentioned before, it is more housing supply and that's where sort of robotics can come in and play a huge role, which is, can we use robots, you know, manufacturing? Can we do, you know, modular housing? Can we build faster with robots? Uh, can we bring down the cost of construction? And, um, I actually think this is an incredibly, that's like, that's one area that we've, we've never touched. We're not, we're not a hardware company, uh, yet. But, but it is sort of this big …

AI assessment note: “all of these things I think will really affect, um, will really affect the housing market”

Q In this episode, we've been talking about housing, we've been talking about healthcare. These are two extremely, uh, complex markets. I'm curious if you can go back in time, um, you know, knowing what you know now, uh, what, what might have you done differently?

A I probably would have started with affordable housing, actually. Affordable housing has kind of every problem that the rest of the industry has. Um, plus maximal complexity because of all the dense compliance and paperwork, all the require additional requirements, and they are the most underserved. Um, they have the biggest administrative drag, and they are also the slowest, some of the slowest adopters. So it just shows that there's this huge clear opportunity for them to, to take advantage of AI, and it would just, it just takes longer to get there. So that's, I think one big thing I would change, we're actually kind of approaching healthcare in a similar way, which is start with what is the most underserved, because that's where we can have the largest impact. The most underserved and the most complex, because if you sort of solve those problems, then the rest of it is sort of easier downstream.

AI assessment note: “I probably would have started with affordable housing, actually.”

Q And how about the second part of the question in terms of, okay, your, your vision comes true in terms of, uh, you know, fully autonomous or fully automated housing. Uh, right now there's a lot of people doing a lot of those activities or, or, or some of them. What do they go do?

A I think as AI takes over a lot of the communication and logistics, human roles don't all disappear. Uh, they just, these sort of AI enabled career paths start to emerge. And I think you're seeing this in other industries as well. I think expectations are higher. Um, people like you mentioned earlier expect that renting an apartment is Super easy, super frictionless, and it doesn't require extensive human contact for basic stuff, and that's a great opportunity for AI. So I think you'll see that these career paths are, in the short term, menial parts of the job go away, and people are spending time focusing on building relationships with residents, creating communities. I think people are spending more time at home, right? They're, they're, they're working at home, their home is their office, like you still need this, This human connection, and a lot of our customers we see that are creating roles like community engagement and helping people, ah, people socialize. Um, I think people will specialize tracks, so you might become, instead of this sort of generalist on site doing everything menial and, ah, and complex, you'll actually see a lot more specialization, and you might become a renewal specialist who handles the trickiest retention cases, or, A resident experience specialist that resolves conflicts. Um, but I think in the long run, people will be managing big workforces of A…

AI assessment note: “these sort of AI enabled career paths start to emerge”

Q let's say, you know, 10 years from now, we, we have robotics, you know, we've made some major advances in longevity research. Um, we have AGI. Um, but when you paint, what, what's sort of the, the experience going to look like, or how are those, um, impacts the, the ones that I, that I mentioned, at least robotics and longevity, going to impact the, the, the marketing asset class?

A I think the population is going to change a lot with AI. Why I kind of talk about longevity is I think a lot of AI research is and should be going to extending human life. But if obviously if you're living longer, there are more people around staying around longer. And, um, you know, we talk about cost of living a lot. Cost of living is actually one of the, it is the number one reason that people don't have more children. If AI creates a lot more wealth in the world and it brings, and you know, it, it, it does things like bring the cost of living because of the efficiency is similar to what we work on in housing and healthcare. People have more kids. Again, you have more population. So all of these things I think will really affect, um, will really affect the housing market because all those people, this is a fundamental need for all those people. So, um, yeah, we have to find efficiencies, uh, Kind of, as I mentioned before, it is more housing supply and that's where sort of robotics can come in and play a huge role, which is, can we use robots, you know, manufacturing? Can we do, you know, modular housing? Can we build faster with robots? Uh, can we bring down the cost of construction? And, um, I actually think this is an incredibly, that's like, that's one area that we've, we've never touched. We're not, we're not a hardware company, uh, yet. But, but it is sort of this big …

AI assessment note: “all of these things I think will really affect... the housing market”

Q We've been talking about technology as, as a lever here and the need for it in real estate, and yet real estate spends the least on R and D of, of any other industry. Why is that? And what could be done about it?

A I think solving housing operations is incredibly hard. The search space is massive. There's just a ton of different edge cases. We face this every day. Every single building is different and, um, it's, it's a really large expense for people. So It makes all these things make these interactions with an apartment, like leasing, um, it makes these interactions really complex. So in the past, you've really just needed a person because traditional software couldn't handle the variability that was required. So, if you needed a person anyway, there wasn't really a motivation to buy technology. You just leaned on that person, you leaned on people to do absolutely everything. Of course, those people got really overburdened, but also in the meantime, a lot of that critical data was never collected because it just lived in people's heads. So, Now AI has changed what's feasible and it can handle these really large search spaces, uh, can, it can handle these really complex operations. So in, I mean, in addition, real estate is so far behind on tech, it actually has the most to benefit from AI. So it maybe is going from the lowest R and D spending to potentially one of the highest spenders on AI. Because AI has sort of finally unlocked automation that was possible that really they couldn't, they couldn't take advantage or they couldn't optimize it before.

AI assessment note: “traditional software couldn't handle the variability that was required. So... wasn't really a motivation”

Q Why don't you talk through where we are today in terms of what's, what's been automated, what's not yet automated, and then we can get to what, what is the, the, the full vision? And, uh, in that full vision, what do humans do?

A A lot has been automated. I mean, maintenance, you'd have physical boards with covered in post-it notes with people trying to keep track of what needs to be done. Now that can be automated, um, triaged by AI prioritized based on urgency of those issues routed to the right technician tracked everything automatically. And we see that some operators with this new, these workflows have cut average work order completion times from Four to five days down to under 48 hours, so that's really meaningful for residents. Leasing was pretty, was maybe one of the worst. It was people just spending entire days answering emails, the same 50 questions over and over and over all day long, and, um, just the same basic information, and now AI can obviously handle that and complete that. Uh, those tasks with all of the knowledge of a building or all of the knowledge of a portfolio. Touring was another area of automation. So you'd have to go meet a broker or go meet a leasing agent and be physically escorted to every single showing. But now you can, AI can give you access or you can get access through You know, smart hardware, smart locks, lock boxes, and the AI can still be there to engage and answer all those questions and do the selling. So, um, that gives you a ton of benefits and efficiencies where you're not just having, you're paying a whole human just to unlock a single door and, um, actuall…

AI assessment note: “A lot has been automated. I mean, maintenance, you'd have physical boards”

Q You mentioned we're going in the wrong direction. Can, can you share more about why that's happening and, and what are the sort of biggest, uh, regulatory or technological bottlenecks that, that need to be, uh, addressed for that to change?

A There's a lot of regulation, um, a lot of zoning laws that cause parts of this problem. Um, but even relaxing regulation will not solve that problem by itself. We also need more capital flowing into housing construction today. And that's a big thing that we think about internally at Elise AI. Capital flows where there are the highest returns and, um, Right now, housing has lower returns relative to other asset classes, but, um, we're actually enabling housing to achieve higher returns because we're creating these 10 X better housing operators that return higher profits to investors. You know, if housing is a stable and, and a higher return investment, how much more capital would be flowing to kind of this, this most fundamental need for society. So, Um, you know, that's, that's really great for everyone because it drives more supply into the market and, and supplies is really king to fixing the housing crisis.

AI assessment note: “There's a lot of regulation, um, a lot of zoning laws”