The U.S. city of Baltimore is experimenting with blockchain technology in an attempt to solve its longstanding vacant property challenge.
In a report by The Baltimore Sun, city officials have signed a contract with Medici Land Governance to record details of vacant properties on a public blockchain. The $225,000 contract will see Medici Land Governance run a three-year pilot to test the efficacy of blockchain in real estate documentation.
By the end of the pilot, city officials expect Baltimore to have a functional blockchain-based platform containing a detailed “chain of custody” for each property. Industry stakeholders have hailed the project, the brainchild of Baltimore city solicitor Ebony Thompson, as a solution to the persisting problem.
Studies are expected to begin in early 2024, with several insurance and real estate firms indicating support for creating an “immutable ledger.”
“It creates a level of efficiency that we’ve not had before,” said Katherine Pinkard, CEO of Pinkard Properties. “You would be able to pull up a piece of property and very clearly see through these blocks on the chain when it has changed hands and with whom and why and at what cost.”
Baltimore has around 13,000 vacant lots, which experts say could serve as breeding grounds for criminal activity and drug use. The delays associated with foreclosing a vacant home in Baltimore complicate the problem with residents required to conduct multiple, expensive title searches.
Thompson adds that the city will rely on traditional title searches as an added layer of protection. The blockchain-based system will operate alongside the city’s digital SDAT system, with experts confident that the introduction of new technology will be resistant to ransomware attacks.
While the solution will be public-facing, there are plans for the blockchain system to have a private layer for only city administrators to input data related to vacant lots.
Real estate experts warn that turning to blockchain will not automatically provide a solution, but the real work lies on the strength of the data inputted into the platform.
The prospects of tokenization
Baltimore’s real estate agents have expressed optimism about the possibility of tokenizing properties should the pilot yield positive results. Pinkad says tokenization could offer investors higher liquidity and fractional ownership while introducing a new class of investors to the industry.
“Having the city take the lead, I think is the lynchpin that’s going to help make that happen,” said Pinkard. “If the city creates a supportive environment around experimenting with blockchain, that I think is the first domino that needed to fall.”
Several jurisdictions like Israel, Hong Kong, and India are throwing their weight behind real estate tokenization, spurred by the myriad benefits to be gleaned from a potential integration of blockchain
Watch: Zweispace founder discusses how blockchain is changing real estate
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Source: https://coingeek.com/baltimore-leverages-blockchain-for-real-estate/