The U.S. housing crisis is a complex, multi-layered problem shaped by decades of underbuilding, rising construction costs, labor shortages, high interest rates, and restrictive zoning policies. While headlines focus on supply shortages and outdated regulations, the real pressure is on the frontlines where multifamily developers and property managers are struggling with cost inefficiencies in their day-to-day operations.
In California alone, energy costs have become prohibitive. Electricity rates are now 80% higher than the national average, a dramatic increase from just 33% above the average in 2015 (Public Policy Institute of California).
Utilities, along with labor, materials, insurance, compliance, and repairs, are moving through disconnected systems that disguise true costs and stall decision-making.
Most industry professionals lack real-time visibility into where these costs originate or how to proactively manage them at scale. In today’s capital-constrained market, every operating dollar lost compounds into an increased rent dollar or a unit that never gets built.
The housing conversation must move beyond simply building faster or cheaper housing. It’s time to build smarter, leaner, and more efficiently.
That’s where today’s emerging technology comes into play. Although there’s no single technology that will solve the housing crisis, innovations like artificial intelligence (AI) and other advanced tools are helping property teams improve operations and cut costs.
These technologies won’t lay concrete or install drainage systems (yet), but they are already among the most powerful tools we have to reduce waste, identify redundancies, and streamline how we manage housing at scale.
As the principal of a property management company, I’m a strong believer in using AI and smart upgrades to boost efficiency and enhance the resident experience. We’re actively testing new technologies to elevate our properties’ performance, including an in-house AI platform that identifies and implements impactful improvements.
One of our latest property-wide initiatives includes replacing every toilet with low-flow models, converting outdated boilers to tankless water heaters, and installing high-efficiency showerheads. We’re also working on designing a shower retrofit to address water, gas, and sewage expenses—since showers often rank among the most utility-intensive parts of a unit.
Tools like DrizzleX help us support these efforts. DrizzleX submeters all water sources within each unit and alerts us to leaks or excessive use. These insights enable us to make smarter, data-informed decisions to control rising costs.
Smart technology’s value extends beyond retrofitting. Once this phase is streamlined, we can deploy AI strategically to reimagine how we approach sustainability and environmental considerations at our properties.
Platforms like Facilio leverage AI-driven insights and real-time IoT data to monitor and manage energy consumption, reduce carbon emissions, optimize building operations, and automate maintenance tasks. For the housing sector, it translates to lower utility costs for developers and meaningful savings for residents.
We’re also watching property management undergo a technological shift. Before the pandemic, many housing providers relied on limited digital infrastructure to monitor assets; the post-pandemic era has changed the way we approach property management.
Now, multifamily housing owners and operators are using tools such as EliseAI to automate leasing and tenant communications, and SnapInspect and HappyCo to manage property inspections and maintenance more efficiently.
The evolution of property management software allows nearly every aspect of operations to be automated. For residents, this means there’s no longer a need to self-report issues as smart systems can now detect and identify problems themselves. For managers, it reduces operational burden, minimizes manual input, and lowers legal exposure by ensuring timely, transparent responses, all while improving the resident experience. .
At K3 and Alpine LA properties, we’re using AppFolio to manage every aspect of our operations — from rent checks to tenant communication. It has helped us to streamline workflows across our teams and portfolio and respond to residents’ concerns and requests faster. The platform is also now pushing toward AI, which will be built into their centralized platform and work with property data.
Across our properties, we also use smart meters that give us real-time data and create work orders automatically. As the rest of the industry follows our adoption of these types of tools and technologies, it will minimize service delays and allow maintenance staff to address small problems before they escalate.
The stakes across every stage of housing, from development to management, are higher than ever. We’re at risk of losing new development and the properties we already have if we can’t find ways to make things more economical.
This is the moment for the housing industry to get creative. AI is a transformative technology that’s being applied across every industry. When paired with practical efficiency upgrades and other smart technologies in housing, it offers the capability to reinvest savings back into communities, stabilize rent increases, and reduce tenant displacement.
At the ground level, emerging tech can help us preserve what we already have while giving us the space to build more. The tools are right in front of us, the necessity is urgent, and the time to act is now.
Michael Kadisha is a Los Angeles-based real estate investor and entrepreneur, serving as Principal at K3 Holdings, which owns and operates thousands of multifamily units.
