Arizona has positioned itself as a leader in innovation – a state where financial technology companies can apply to test their products and services with limited regulatory hurdles. Two weeks ago, Governor Ducey added to the Arizona business “playground” by signing House Bill 2673, the property technology sandbox bill.
The PropTech sandbox, similar to the FinTech sandbox signed into law last year, will allow startups, entrepreneurs and existing property technology companies to test their products with little-to-no governmental chaperoning for a limited time. The bill reads that membership in the sandbox will “enable a person to obtain limited access to the market in this state to test innovative property products or services without obtaining authorization that might otherwise be required.”
Presently, real estate is more important than ever. According to Medium, 60 percent of the world’s assets are in real estate, and 75 percent of that figure belongs to residential real estate. Property technology firms aid businesses and consumers in designing, constructing and managing real estate.
“I think it’s great that we try to be this innovative state in all kinds of technologies and platforms,” Representative Jeff Weninger, the sponsor of the bill, said. “Arizona in the past and in the future is a real estate dominated space, and to be able to take that institutional real estate and the real estate developers and real estate assets that we have and combine that by attracting these property technology companies is going to be a great marriage going forward in the industry.”
The potential economic impact of property technology firms and the PropTech sandbox is hard to quantify, but there is no question about the industry’s prodigious potential. Further, a report by Forbes points out that in 2017, global investments in PropTech totaled over $12 billion. Arizona is the only domestic state to capitalize on this potential; a PropTech sandbox is the first of its kind in the nation.
“Governor Ducey and the Arizona legislature have demonstrated their commitment to establishing Arizona as a tech hub,” said Courtney McKinstry, vice president of government affairs at the Arizona Chamber of Commerce and Industry. “The sandbox legislation proves that our state not only wants to attract startups and entrepreneurs with new and innovative ideas but also allow them to grow their business and the economy.”
Similar to the FinTech sandbox, the PropTech sandbox allows companies to apply for and, if accepted, operate with flexibility under the authority of the Arizona Commerce Authority. But the relationship goes both ways. While innovators roll out their products and services, they directly contribute to the state economy and simultaneously solidify Arizona as the nation’s newest tech hub.