The digital real estate boom is a mess
Good morning! If you can’t afford Bay Area housing prices on real earth, you might be able to on virtual earth. But probably not for long. I’m Janko Roettgers, and I hope the AR version of my house won’t need quite as many repairs.
Whose streets? AR streets.
Do you live in the Bay Area, New York or Chicago? Then there’s a good chance that your house has recently been purchased by a stranger.
A digital version of your house, anyway. Those three metro areas have become some of the hottest markets in Upland, a blockchain-based game that allows people to buy, develop, rent out and sell virtual land parcels based on real-world property borders. It’s a bit like Monopoly, but instead of a game board, everyone uses Google Maps, and every real-world address is in play.
Geospatial AR is coming. Upland launched in early 2020, and reached over 100,000 daily active users in December.
- Typical rents are extremely low. The person who “owns” my property in Upland right now makes the equivalent of 4 cents a month.
- Still, some people have amassed thousands of dollars worth of property in the game, and the company allows players to sell their properties for real hard cash.
- In the future, Upland wants to expand into AR, and give developers a way to leverage its geospatial ownership contracts for their own apps and services.
- Upland isn’t the only company doing something like this, either: Others include Spotland, which promises to share ad revenue with whomever owns the AR layer to a house, and the Geo Web, which eventually wants to empower others to build geospatial AR apps and services.
But is it legal? Can someone else buy, rent out or sell the AR layer associated with your home address? Turns out there’s no clear-cut answer.
- “This is not something the law has dealt with before,” said Stanford Law School professor Mark Lemley.
AR companies have to make up rules on the spot absent of a clear legal precedent — and their ideas about property rights in AR vary widely.
- Upland is basically letting the market decide, even if that means replicating existing problems. “It eventually becomes like the real world,” Upland co-founder and co-CEO Dirk Lueth told me. “You have some real estate mogul [who owns] more land than others.”
- Spotland is giving property owners the right to opt out and effectively remove their addresses from its AR map.
- The Geo Web is based on an economic theory called Harberger Taxes, which in theory should prevent AR land grabs and give late-comers a chance to still participate. However, even the folks behind it admit that there’s no proof it will work as intended.
It will take a few more years for companies like Apple, Meta and Google to produce AR glasses suitable for everyday wear. The industry, regulators and everyday people may need that time to figure out which role real-world property rights should play in AR, and who ultimately gets to decide what kind of AR layers can be pinned to your favorite coffee shop, your office or even your home.
Whatever the answer may be, games like Upland make it clear that we will encounter all kinds of weird problems as more of the real world goes virtual. Or, as veteran media exec Greg Kahn put it on Twitter this week: “We’re entering ‘Black Mirror’ territory here.”
— Janko Roettgers (twitter)
A version of this story also appeared on Protocol.com. Read it here.
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