The Semiotic Future of Real Estate

In a world of abundance and self-selection, may the dankest meme win

But now I have come to believe that the whole world is an enigma, a harmless enigma that is made terrible by our own mad attempt to interpret it as though it had an underlying truth.

—Umberto Eco

At some point in the past year, Eric Weatherholtz—one of my favorite real estate developers (and the author of Asphalt Jungle)—posted the following question:

Most answers were variations on some trend taking place today: remote work, adaptive reuse, re-urbanization. All those things are certainly important trends and will influence the path of development.

But fifty years is an extraordinarily long time. In 50 years, the key decisions of real estate development will be made by people currently playing Roblox on their iPads. The world will look incredibly different, and—more importantly—will be shaped by people who have had a very different set of formative experiences than their parents’ or grandparents’ generations.

In 50 years, I’m afraid that the most instructive model of real estate will look less like the things we know today and more like a very strange, very dark Margaritaville.

Let me explain.

On Z, Alpha, and Beta

Before we dive in, let’s take a moment to discuss the generations that will be making key real estate decisions in 50 years. For argument’s sake, let’s assume that this includes people that will be aged 40 to 65 in 2073—that is, those born between 2008 and 2033.

Generationally speaking, this would include the youngest members of Gen Z (born 1997-2012), the entirety of what is currently called Gen Alpha (2013-2025), and the eldest of what I assume will be called Generation Beta (2026-2040 or so). Today, these would be kids no older than 15, with a decent chunk of the cohort yet to be born. While it’s obviously impossible to know exactly how this cohort will shake out, we can make some educated guesses based on (a) the members that already exist and (b) broader trends in media and the internet.

If younger Millennials were the first internet generation—and elder Gen Z were the first to experience mobile phones at a formative age—younger Zs and Alphas are the first to be wholly immersed in social media from a very young age. Over ninety percent of teenagers are on social media, and more than half use it “almost all the time.” YouTube is regularly used by 95% of teenagers, with TikTok and Instagram following at 67% and 62%, respectively.

This is an unprecedented social experiment taking place on a tremendous scale. These apps unlock entirely new ways of interacting with others, both IRL friends and new, online friends. And they also enable new ways to consume content algorithmically tailored and amplified for each young person’s specific interests.

Online social interaction and algorithmic content consumption are two sides of the coin shaping this next generation, a push and pull spinning a flywheel of engagement. TikTok and YouTube are exceptional at taking a whiff of an interest and incrementally delivering content that teases, engages, and fosters that interest, eventually leading to online communities around that interest—communities that may have little or no connection to a teen’s IRL world of school and friends.

For well over a decade, online communities have allowed Americans to escape from the enforced conformity of teenage life. That part isn’t new; I was hanging out in IRC chat rooms in 1994. But those chat rooms were dumb vessels—they didn’t attempt to amplify content and messages based on my interests. Today’s equivalents do, and they are very, very good at it.

This generates both uplifting and terrifying outcomes in spades. On one hand, it’s easy to imagine a LGBT teenager raised in a small Southern or Midwestern town gaining greater awareness of the outside world—and therefore hope of a better future—through social media’s power. On the flip side, algorithmic sorting can send young people down increasingly dark content rabbit holes of just about anything: video games, anorexia, misogyny, or—as we’re collectively discovering now—rabid hatred of Jews.

I could go on, but this is a real estate newsletter. The point is that young people are increasingly finding their interests—and identity—molded by powerful algorithms and aligned with a far wider array of niche sub-groups than they could find in their hometown high school. This will be true not only for the people making real estate investment decisions, but also the consumers they serve: the people who frequent retail businesses, sign apartment leases, and buy homes. Increasingly, we’ll see a world defined by atomization, and the most successful real estate operators will play along.