From: allard@isi.edu (Dennis Allard)
Newsgroups: comp.infosystems.gis,misc.invest.real-estate
Subject: report on Denver GIS conference
Date: 30 Jul 92 20:12:28 GMT
Reply-To: allard@isi.edu (Dennis Allard)
Distribution: world
Organization: USC Information Sciences Institute

The following article has been submitted to GIS world.  I am posting
it here on behalf of the author.

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     Denver Conference on GIS in Business and Commerce, May 1992

			   by James Finlay

James Finlay is an MAI Candidate working concurrently as a Research
Director and Commercial Real Estate agent at Muselli Commercial
Realtors in Santa Monica, CA..  He has followed GIS technology since
1987.


Introduction

The First Annual Conference and Exposition on GIS (Geographic
Information Systems) in Business and Commerce was held May 11-13 in
Denver, Colorado.  GIS World Inc., publishers of GIS WORLD magazine
(Fort Collins,CO), sponsored the program.  It was rated a success by
most attendees I talked with and surpassed the organizers'
projections.  Organization was excellent and included a spectacular
evening feast in the world famous Denver Natural History Museum.

This article will give a brief explanation of basic Geographic
Information System concepts.  Primarily, I will review appraisal
related issues and data sources discussed at the conference.  Some
references are included.  Readers can contact GIS World or the author
for additional information.


1,100 Attendees, 18 Countries

Total attendance was 1,100 people from 18 different countries.  650
people visited displays by 39 vendors of hardware, software and data
sources.  An additional 450 people participated in 86 technical
sessions as well as the exhibits.  Next year's conference is planned
for May 1993 in Boston.

What made this conference unique was its focus on the commercial side
of GIS.  Very few other conferences have ever focused on GIS Real
Estate applications making this a precedent setting event.  Groups
such as AM/FM International (Automated Mapping and Facility Mapping)
and URISA (Urban and Regional Information Systems Association) have
small sections devoted to business GIS applications.

"Traditional" GIS applications have dealt primarily with facility and
natural resource management, frequently for city governments and
large utilities.  Planning, assossors, re-districting and public
works are all well established applications.  This conference group
was dedicated to real world solutions with a bottom line orientation.
Real estate was a featured speaker track involving numerous talks
relevant to appraisers.


The real estate tracks proved to be one of the most popular and many
sessions had standing room only.  Other tracks were Transportation
and Distribution, Marketing, Strategic Planning, Site Selection, Data
Products, Finance and Insurance, Manufacturing and Regulatory
Compliance.  In the following paragraphs I concentrate on topics
related to real estate generally and property valuation/evaluation
specifically.


Sophisticated Use in Retail

The "location, location, location" adage proved most valuable to
national chain retailers who are one of the most advanced users of
the technology.  Sales data and demographics combined on a map show
information graphically that leaves bar charts far behind.  Local
demographic data allows chain retailers to predict income and
specific product sales levels with uncanny accuracy.  Accurate
consumer profiles can be created based on commercially available
credit card, census, license plate and other arcane data sets.
Relating this information spatially through the map allows store
owners to know income, ethnic background, etc. in their anticipated
market area.  Maps also show physical distance between a subject its
influences.  Sales potential and thus store size, advertising
techniques and promotional sensitivities can be adapted accordingly.

Each parcel of real estate occupies a unique location and in doing
so, has a unique spatial relation to everything around it.  A map's
graphic medium represents those relationships best.  Appraisal is
primarily the challenge of adjusting the comparative nature of a
particular property to others in different locations.  Computerized
Geographic Information Systems streamline the comparative process and
adds new levels of data relations to draw from.  Some spatially
related (geocoded) data is available now, and this will only increase
in sophistication and amount with time.  The ready integration of
this additional level of information into appraisals could become
common and expected.

For an appraiser, these insights might act as supporting data to
substantiate (or repudiate) a shopping center's projected income
stream.  Comps on a map could be toggled on or off, which in turn
change a linked column and row chart in the report.  With a GIS based
management system, retailers can create micromarketing models that
provide almost instantaneous feedback on product performance.
Sophisticated "what's hot and what's not" product monitoring can
provide a superior competitive edge.  This in turn leads to higher
lender confidence resulting in preferential mortgage rates or terms
for the related property.


GIS Overview

The classic GIS information model is easy to understand as a series
of information "layers" located above an area of the earth's surface.
Layers primarily describe "features" and "boundaries" which are
represented as polygons, lines and points.  Typical "features" might
be roads and transportation routes, hydrology (rivers, lakes, etc.)
or building footprints with use codes and ownership records.  Typical
"boundaries" might be school districts, zoning or city borders.
Characteristics such as toxic waste sites, boundaries like flood
plains and city special study zones that are vital to valuation
research appear.  

A location's "attributes" are peculiar to a location and derived from
the layers chosen.  Every feature and boundary attribute can be
related to any point (node) on the landscape by picking the layers
that pertain to the query.  When a set of x,y coordinates (geocode)
is queried, all attributes related to that point are posted.  In its
simplest form, GIS is a graphic (the map) interface to a non-graphic
(the attributes) database.  

GIS graphics privides a better database model to describe and
retrieve earthbound information than a spreadsheet model.  When the
promise of GIS is realized, all demographic, political and physical
features will be layered such that a each point could reveal all
known attributes particular to that location.

Information overload will inevitably lead to a growth in GIS based
graphic analysis.  Only the layers pertinent to your needs will be
chosen from the many available layers.  By distilling them into a
graphic map, the speed and accuracy that the information is consumed
is increased.  New relationships otherwise buried in spreadsheets and
conventional business graphics, pop into clear view.

So what is the delay?  Application software make huge demands on
computer hardware and continue to push the PC platform to the limit.
Early GIS ran on mainframes or minis and many current systems use
Unix based workstations.  Fast 486 processors, cache memory, abundant
RAM and large hard disks are the preferred domain of a full function
GIS.  Recently however small dedicated systems are running on
MacIntosh and laptop computers.  As computer power on the desktop
increases, so will the availability of practical GIS.  For the time
being it will remain in a well capitalized and narrowly focused
domain.


Denver's a GIS Town

Denver is an appropriate location for such a conference with many
intensive cartographic users in the area.  U.S. Geological Survey,
the Bureau of Land Management and the historic natural resource and
energy orientation of the local economy have had their influence.
Many mappers and geologists were inspired by layoffs and rocky times
of the last few years to start, or join new computer mapping
ventures.


Conference Overview

Unfortunately it is impossible to mention on all of the insightful
speakers and exhibitors.  Many are visionaries and almost all share
tremendous enthusiasm for their technology.  My selections are
necessarily somewhat arbitrary and are intended to give a glimpse of
the quality and diversity we experienced at the conference.

Chairing the Real Estate Track was Gilbert Castle (Castle Consulting,
San Francisco, CA).  He is the past Regional Director of the Roulac
Real Estate Consulting Group of Deloitte and Touche.  Monday
afternoon began with his comprehensive overview "Introduction to
GIS".  Lloyd Lynford (The REIS Reports) followed. Mr. Lynford's
discussion applied to large institutional portfolio valuation,
specifically apartment building mortgages.

Another interesting meeting Monday pertained to mass valuation for
insurance coverage review by Dennis Klein (Facility Mapping Systems,
Mill Valley, CA).  This has become an issue in the insurance business
following the September 1991 Oakland Hills fire.  Many of the homes
destroyed were vastly underassessed with policy holders on
essentially a free ride.  When insurance companies were liable for
replacement value, losses were enormous.  GIS type data sets, tied to
an expert system, could do massive underwriting reviews as policies
came up for renewal.  This could red flag discrepancies between
insured value and estimated market value.  Detailed valuations would
then be ordered on only those properties where policy and market
values were significantly different.

On Tuesday morning, Gary McAvoy (Northwest Geografx Corporation,
Kirkland, WA) presented a new residential Multiple Listing Service
based on a map.  The Puget Sound MLS has successfully used the system
since September 1991.  Map printing in the agent's office is a
popular feature of this system.  Next was a talk about data sources
available to create and/or maintain GIS systems.

Data integrity was a major topic at the conference. 20% of the
technical sessions were concerned with data quality and quantity
issues.  Everything from satellite photos to credit cards were
offered as data sources by speakers and vendors.

During several presentations base maps derived from U.S. Census TIGER
street maps were criticized for accuracy.  Improved address matches
of TIGER files are available by several vendors.  Refined census
demographics going down to the block level (approx. 1000 people) has
added heightened accuracy to neighborhood profiles.  The Zip + 4
mailing address convention also greatly aids data accuracy.  This is
counterbalanced with the huge data volume increase which then must be
manipulated.

Concluding was Al Tavakoli (Geographical Information Corp.,
Rockville, MD).  His paper outlined an advanced GIS modeled MLS
installed near Washington D.C.. He felt automated appraisals for low
valued, conforming properties would be very possible.  Data accuracy
and verification arose as issues however the consensus was the
valuation model fit computer expert system guidelines.

Tuesday afternoon began with Ried Schott, MAI (Karsten Realty
Advisors, Los Angeles, CA) who reviewed data and GIS implementation
topics.  Karsten has a fully functional GIS portfolio valuation
support system.  The Karsten application was highlighted by Mr.
Castle as exemplary.

Next was a synopsis of the Portland Urban Database project.  The City
of Portland decided to create a highly sophisticated GIS database and
become an information vendor.  By being the primary source of data
about the municipality, city managers, developers and land users
would all be operating with the same numbers.  Most unusual was the
idea of selling the information as a revenue source to help pay for
development.  Current income is vastly below startup costs, as
expected.  The functionality provides long term benefits and savings
to the city and has been enthusiastically supported on all fronts.

Another municipal GIS type data vendor is the state of South
Carolina.  They have developed a state wide GIS to assist industry
wanting to relocate in the state.  Income demographics, population
skill levels, unemployment statistics, available land, transportation
links, etc. are all on-line.  Their goal is to amortize the start-up
expense with future tax base increases helped by the statewide
"information utility" GIS.  As in Portland, a government supported
GIS database can be a win win situation.

The last Real Estate Track speaker was by Marcie Wallis (National
Association of Realtors, Washington D.C.) who is creating boundary
lines for of all local real estate boards.  The membership database
is now being tied to the map and for the first time NAR will be able
to see where their membership is and isn't.  Perhaps some experience
at NAR could be applied to the Appraisal Institute's membership
information records and integration with the old Society.


Conclusion: GIS has Arrived

The conference was perceived as extremely successful for attendees
and more exhibitors should be expected next year.  Most GIS
applications in real estate on a PC level were expensive with
hardware, software and data costs impractical except as a service to
many users.  The prognosis for the next few years is good.  Costs
will continue to shrink for data and computing power.  GIS is a
powerful technology that has the potential to impact the appraisal
business tremendously in the medium term.


For more information

The 1991-92 International GIS Sourcebook, published by GIS World,
contains references to practically every computer mapping company and
group extant.  Hardware, software, consulting and a bibliography are
included along with numerous case studies and instructive articles.


GIS World, Inc., P.O. Box 8090, Fort Collins, CO 80526, 800-GIS-WRLD
(800-447-9753), conference sponsor

Gilbert Castle, Castle Consulting, 44 Montgomery St., Suite 500,
San Francisco, CA 94104, 415-955-0531. GIS consultant.

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