Colorado Real Estate Journal - November 19, 2014
For all of human history our perspective has basically been stuck at eye-level and now for the first time in history we can see the world the way the birds do.” – Chris Anderson, 3D Robotics Professional aerial photography has been used in commercial real estate for years, yet primarily reserved for only the largest of firms and clients with substantial investment capital able to go to such expense. But the tides have changed, due to the advent of unmanned aircraft systems (UAS). In today’s smartphone culture with the associated economies of scale, high-quality aerial imaging is now possible and affordable to the wider consuming public. Modern UAS use the same GPS modules, accelerometers, gyros and processors as those used in smartphones. Advancements in battery technology, for use in smartphones and tablets, have advanced UAS’ operational performance. Today UAS are literally everywhere, and the commercial real estate industry in particular has seen an explosion in their use. Due their small size and often superior flight performance characteristics, UAS are able to capture images and videos of properties taken from unprecedented locations and angles and at closer range and with better precision than manned aircraft. As a result, a higher-quality product is obtained at a reduced cost, benefiting commercial firms in both the development and marketing of their projects. Improved data collection through the use of UAS further has enabled evermore sophisticated efforts in 3-D modeling and virtual building. While there are many advantages available to the UAS user leading to their increasing popularity, the resulting predicament is a technological breakthrough that has outpaced the law. As it currently stands, UAS cannot be used commercially without the specific authorization of the Federal Aviation Administration (FAA). 72 Fed. Reg. 6689 (FAA, Notice 07-01). Recognizing the policy gap, Congress enacted the FAA Modernization and Reform Act of 2012 (FMRA), which mandates the FAA to safely integrate UAS into the national airspace system by September 30, 2015. However, the FAA is behind schedule. While rules governing small UAS weighing less than 55 pounds are expected to be out for public comment by the end of 2014, remaining UAS rules will likely not be out for comment until, at the earliest, 2016 and implemented in 2018. It is worth noting that under the FMRA Section 336 (Special Rule for Model Aircraft), Congress exempted from regulation model aircraft (recreationally used UAS weighing less than 55 pounds) as long as they fly below 400 feet, remain within the visual line of sight of the operator and clear of manned aircraft, and notification is provide when within five miles of an airport. In June, the FAA interpreted the Special Rule to apply only to “hobby” use, and provided a specific real estate example to illustrate the hobby/ commercial divide: “Taking photographs with a model aircraft for personal use” is hobby, while “A Realtor using a model aircraft to photograph a property that he is trying to sell and using the photos in the property’s real estate listing” is commercial, and therefore subject to regulation. (Interpretation of Special Rule for Model Aircraft, 79 Fed. Reg. 36,172 (June 2014)). So where does that leave commercial real estate between now and when the FAA provides UAS rules years down the road? Two options are available: the first is to obtain a civil Certificate of Authorization. Second is to petition for exemption from certain Federal Aviation Regulations under the FMRA, Section 333 (Special Rules for Certain Unmanned Aircraft Systems) (Section 333 petition). Given that operations under a COA are limited to a defined block of airspace and requires the applicant to establish the airworthiness of the particular UAS (e.g., through the FAA or DOD) (UAS Interim Op Approval Guidance 08-01 (March 2008)), petitioning the FAA under Section 333 is the most promising option. To date, the FAA has received 111 Section 333 petitions from a variety of companies across a range of industries, including real estate. Under Section 333, Congress gave the FAA the flexibility to expedite operational authorization of certain UAS before completion of UAS rulemaking upon considering factors such as the UAS’s size, weight, speed, proximity to airports and populated areas, and operation within visual line of sight. Section 333(b)(1). For exemption to be granted, the petitioner must show: 1) an equivalent level of safety to those regulations from which the petitioner is seeking exemption; and 2) that the grant would be in the public interest. Id. See http:// www.faa.gov/uas/legislative_ programs/section_333/how_to_ file_a_petition/. In September, the FAA made a historic decision, approving for the first time the commercial use of UAS through Section 333 petitions to six companies in the television and movie industry. See http://www.faa.gov/news/press_ releases/news_story. cfm?newsId=17194& cid=TW251/. Though in granting these initial petitions the FAA resolved upon a number of seemingly onerous guidelines and restrictions – most imposed by petitioners themselves – none are roadblocks to the use of UAS in commercial real estate. Indeed, in announcing these initial grants, the FAA expressly encouraged additional commercial efforts, not limited to the “sterile set” environment offered by the TV/ movie industry. (Similar “sterile set” conditions can, nonetheless, be created in the real estate context as well.) What is clear is that a petition should be granted as long as the petitioner can prove safe operating procedures are in place. Indeed, Congress mandates that upon the FAA making a determination of safety, it “shall [also] establish requirements for the safe operation.” See Section 333(c). The time is ripe for the commercial real estate industry to leverage UAS advantages. Firms that use UAS will not only benefit from the bird’s-eye perspective that this new technology offers, but will be well-positioned to outpace their competitors and take a lead in the industry.