Looking ahead to the year 2025, we envision cities transformed by innovation and progress. In this context, we want to explore the crucial role that specialized rental operators will play in the cities of the future. How will these experts shape the urban fabric and contribute to the well-being of its inhabitants? , what guidelines will they set in terms of sustainability and economic development? , what are your most important challenges?

To answer these questions and to venture into this prospective exercise, we have invited Juanjo Bande, an architect for 25 years and a renowned expert in the real estate, digital and tourism rental sector. Juanjo has specialized in real estate investment in the sector, from design and physical construction, as well as regulatory, legal and economic aspects of the same.

But that's not all, Juanjo has independently launched himself into the world of content. Through his YouTube channel, he educates with great skill on the ins and outs of the digital rental and tourism sector, helping to structure this community. His YouTube channel continues to grow and has just surpassed 10,000 followers.

To talk about the future, let's start by talking about the context and evolution of urban housing

The housing landscape is undergoing a radical metamorphosis, driven by the large population concentration and the constant search for efficient solutions. According to recent statistics from the National Institute of Statistics (INE), a 20% increase in demand for urban housing is projected in Spain by 2025. However, Spain has had a housing deficit for more than a decade.

What is your perspective?

There has been a disconnect between the concentration of population in cities and the generation of new urban land that can respond to housing needs. In this way, we show a greater concentration in first-level centers, but this is not accompanied by the emergence of solutions to the urban housing problems that arise.

How should we respond to this problem?

In highly concentrated urban centers we need innovative technological solutions that allow for a more efficient use of built heritage. These solutions must count as specialized operators, seasonal rentals, tourist rental, coliving, flexliving, and others.

We need to create an ecosystem of companies that covers all aspects of this new sector: equity companies, SOCIMIS, build to rent companies, rental platforms, etc. And even activate the small investor that can play an important role in this ecosystem.

In areas of lower concentration, society needs them to be activated public policies for the generation of housing supply and land transformation. This must respond to the will of those who wish to access their own housing.

In your opinion, are Specialized Rental Operators prepared to meet this demand?

I think we have two different situations. On the one hand, they are operators who come from the traditional real estate world. In general, these are low-tech operators who are used to intervening in sales or rental transactions but not providing continuous service to the user of the property.

On the other hand, we have operators who come from the world of short-term, tourist or seasonal rentals. These operators are usually used to integrating a high level of technology and carrying out all their transactions digitally. They are also used to providing constant service to the end user of the property. Thus, we have a very divided market of operators, with two very different situations of technological evolution.

What impact do you anticipate these operators will have on the Spanish real estate market in terms of supply, demand and prices?

This is something that we are already seeing, for example, in cases of room rentals. The emergence of operators of this type of rental, which is often called “rent-to-rent”, is changing demand and supply in certain areas of cities with greater density. We have an unmet housing need that doesn't fit the demands of traditional renting and operators who are solving this differential between what landlords demand and what the tenant market is asking for.

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Adaptability and sustainability

What role will the adaptability and sustainability of rental operators play in the city of the future?

One of the highlights that will distinguish these operators will be their commitment to adaptability and sustainability.

The intervention of real estate operators in the market introduces much more flexibility in the behavior of properties. We must bear in mind that most of the Spanish real estate stock is in the hands of small landlords who own one or two properties and who are not professionals in this regard.

This situation causes a lot of inefficiency because most of the management is “amateur” and amateur. Owners have a lot of chores in their lives and don't dedicate the necessary attention and investments. Hence the high number of empty houses and lack of renovation in many areas.

When real estate operators such as vacation home or room rental managers intervene in the process, they help landlords and complement any lack of dedication that may exist. This generates a better use of resources in a more sustainable and efficient way. There is no worse attack on sustainability than an empty house that is not being used.

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According to data from the Ministry for the Ecological Transition and the Demographic Challenge, environmental awareness is increasing, and 85% of Spanish citizens consider it important to live in sustainable environments. Likewise, 45.9% of Spaniards looking for housing would pay more for sustainable housing, according to the 2023 edition of the report 'Sustainability in housing demand' prepared jointly by Fotocasa and Solvia. - (c) 2024 Adevinta. Given the growing environmental awareness, how do you think these operators will contribute to sustainability and energy efficiency in new real estate developments?

I believe that the greatest impacts will occur where economic incentives so promote it. In cases where real estate operators assume the costs of energy supplies, as is sometimes the case in the case of tourist rentals, there is a very important incentive for operators to reduce energy consumption and be more sustainable.

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A major challenge in the tourist rental sector is the measurement of the environmental footprint. In this area, the work carried out by hotels differs from that of tourist housing. What do you think this gap is due to?

This gap is due to the fact that in the tourist rental sector, the operator usually has less connection with the property. The dominant model in Spain today is management. In this system, the landlord entrusts a company to manage their tourist rentals. The management company does not own the property nor does it have the capacity to promote structural or systemic reforms that can improve the energy efficiency of the building.

Likewise, a manager with a temporary connection to the activity is also not in a position to promote complex procedures such as the measurement of the environmental footprint. As professionalization improves and progresses in the sector, I believe that practices will improve and it will be more feasible to undertake projects such as footprint measurement.

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Technology and user experience

The convergence of technology and user experience becomes a central axis in the vision of specialized operators. This goes beyond the use of intelligent property management systems that allow residents to control their tourist homes with a single touch, from room temperature to security.

How do you anticipate that technology will influence the management and operation of rental properties in 2025, and how will specialized operators adapt to these changes?

Technology has entered the tourist rental sector through platforms. Nowadays, no tourist rental company can be conceived that does not transact a high percentage of its operations digitally.

From this point on, technology has been conquering the entire operation of tourist rentals, starting with price management and continuing with access and the relationship with the user. Those operators that do not make good use of technology have no future in this sector.

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Given your presence on digital platforms, how do you see the role of technology and online communities in promoting and managing rental properties in the near future?

Online communities need to be connected to real-world communities. One of the biggest problems in the sector of professional rental operators is the fact that they are poorly connected and active in the real world.

‍People and companies carry out their work locked in their “little corner” and there is very little connection. This slows down people's professional development and at the same time generates ignorance and distrust of the sector by the rest of society.

It seems that it's all a “platform thing” and that there are no people behind it. Ensuring that society as a whole perceives this sector as a tool capable of improving life in towns and cities is the biggest challenge ahead of us. To overcome that challenge, we need living communities that are capable of transmitting that message. Along these lines, I hope to do my bit from my YouTube channel.

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Regulation and Legislation

Given your knowledge of legal aspects, what are the regulatory challenges that could arise in the rental sector and how could they be addressed to ensure sustainable growth?

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In this case the greatest challenge and opportunity come together in a. We are at a time when the regulatory capacity of municipalities on short-term rental activity is increasing more and more.

This poses many challenges. On the one hand, the dispersion of regulations. As there is regulatory capacity at the municipal level, various regulations will be produced and logically some will be better and others will be worse. Some are more favourable for the sector and others less so.

This represents an opportunity to show municipal authorities the advantages that the sector can bring to make our towns and cities more open and permeable. If we are unable to get local authorities to understand the positive aspects of the sector, growth and even continuity will be impossible.

A great challenge but a great opportunity.

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The economic and social impact

The economic and social impact of specialized rental operators cannot be underestimated. OEAs generate employment, revitalize urban areas and promote socioeconomic diversity. In a context where inclusion and flexibility are a priority, these operators stand as key drivers of sustainable urban development.

To what extent do you think that specialized rental operators will affect the planning and design of Spanish cities in the near future?

They will have an impact on planning and design, to the extent that they are able to make themselves heard by the authorities and the electorate. If voters don't see the positive side of short-term renting, little can be done for the sector and little can be influenced.

It is important to make society aware that if we want to have cities that work, we must have flexible housing solutions that allow a person to stay in a home for 1 day, 1 week or three months quickly and easily.

The city that doesn't offer this will lose the competitive race compared to the one that offers it.

How do you think OEAs can impact local employment generation and economic development in specific urban areas?

They can be decisive in this line by putting into use real estate, housing and assets that were paralyzed while generating employment and providing services. The ability of a good Specialized Rental Operator to mobilize investment capacity can completely transform the economic life of an urban area.

Conclusion

In conclusion, the cities of the future need professionals who know how to introduce efficiency and sustainability in the management of urban uses. Built heritage is a scarce asset and societies that are able to manage it in the best way will gain a lot of quality of life for their citizens.

In an environment where many people are looking to real estate investment as a guarantee of economic stability for retirement, while other people need the use of real estate, there is much to gain for all those who are able to meet both needs at the same time.

Technology is and will continue to be the great ally that housing operators need to manage assets efficiently and with better profitability. Faced with a growing business landscape, being able to manage the time spent on management very well will be a key strategic factor for successful operators.