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Will shift to 5G impact real estate?

Self-driving cars, ultra-fast high-def video downloads, 911 dispatchers, and smart homes will all benefit from the rollout of next generation wireless technologies known as 5G. But what might the land use and real estate implications be for municipalities, residents and developers?

Industry experts tout 5G for its download speeds of 10- to 20-gigabits-per-second, which is on average 40 times faster than existing 4G networks. In addition, 5G technology is expected to help create 3 million new jobs, add $533 billion in GDP, and generate an additional $1.2 trillion in consumer benefits, according to Forbes.

Ashley Henry Shook, spokesperson for the PA Partnership for 5G, said that the increased capacity and speed associated with 5G can support a host of applications. This could impact many sectors across the state, including health care and, hospitality.

Yet achieving widespread access to 5G networks and signals will require considerable infrastructure of towers, antennae and small cells. How quickly that comes to fruition depends on several factors, including local land use laws and regulations.

Shook says that wireless 5G will not become commercially widespread until 2020, but 20 states have enacted legislation to facilitate its deployment. Pennsylvania is working on legislation of its own.

Representative Frank Farry and 34 other members of the Pennsylvania House have co-signed H.B. 2564, the Small Wireless Facilities Deployment Act, which would create a regulatory framework needed to deploy the small cell nodes used to support 5G technology. The framework will include standards for fees and outline the permitting process.

The impetus for HB 2564 is the fact as they proceed with small cell installation across the commonwealth, installers will have to follow a multitude of local rules for every jurisdiction in Pennsylvania, according to Shook.

“There are 2,600 different sets of rules that they have to abide by right now,” she said. “Having a predictable uniform set of rules to follow to apply for a permit will help to spearhead 5G across the state.”

Trisha McFarland, of the Delaware County Chamber of Commerce, agreed.

“One key chokepoint … is the daunting process of having to go city by city to negotiate regulatory and fee agreements for small cells,” she said. “The process engenders both delays and uncertainty, making it harder for companies to install the networks that are needed to usher in the economy of the future.” Some organizations like the Pennsylvania Municipal League and Pennsylvania Association of Township Supervisors, however, are concerned that the legislation will take away municipalities’ control over their rights-of-way and lead to high costs.

“It’s one-sided for the industry,” said Richard J. Schuettler, executive director of the Pennsylvania Municipal League. “People want to use 5G and we want it to happen. But there needs to be a recognition of local government and its historic inherent right to manage rights-of-way.”

The Pennsylvania Municipal League, in testimony related to H.B. 2564, said that local governments, not corporations, should control utility pole and traffic signal rights of way.

However, the Pennsylvania State Grange – which supports efforts to bring broadband technologies to rural areas – testified that there are explicit provisions in the bill that preserve the local governing authority over zoning and land use.

But what does all that mean for real estate owners and developers?

While current wireless technology relies on towers and buildings of four stories or greater in height, small cells for 5G can be installed on single-story buildings due to the nature of its broadband spectrum, opening up new opportunities for more building owners, said David Moore, senior vice president of NAI Capital Wireless, a division of real estate firm NAI Global that works with landlords on cell-tower and technology negotiations.

There are three questions building owners need to consider before signing a lease to allow 5G infrastructure on their building, according to Moore. First, is your building structurally sufficient for the infrastructure? Number two, so could there be liability that falls on you as a property owner, given the many unknowns of 5G technology? Even with the strongest lease agreement and contract there is implied liability. And third, do you have someone who can assist you in the process of contract negotiations

Only after considering all three does Moore recommend moving forward on a contract. Keeping an eye on the status of HB 2564 as well as proposed 5G legislation at the federal level is also advised.

He said that inevitably 5G legislation is going to come from individual municipalities, as zoning approval processes are handled at the local level. Yet, as it is a new technology, the learning curve is steep. “So, it needs to start at the federal level, then have states weigh in, and finally the municipalities,” Moore said.

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