Nine Ways Autonomous Transportation will Impact Real Estate
It won’t be long until we see major breakthroughs in the number of autonomous vehicles (AVs) on our roadways – both for on-demand passenger travel as well as for product delivery. AV technology is improving quickly, and it appears that the bigger inhibitor to more widespread use is the uncomfortable, vulnerable feeling of being driven by a pilotless machine.
Fortunately, AV safety evaluations seem to be held to a standard of zero incidents and accidents when the alternative for human-operated vehicles “allows” for thousands of accidents and fatalities due to human error, distraction, impairment, and more. In fact, 94% of serious vehicle crashes are caused by human error.
I haven’t seen the final numbers yet for 2021, but traffic fatalities were on track last year to exceed 40,000 in the U.S., which would be the highest level in many years. We’re moving in the wrong direction on that front.
But yet, when there’s an autonomous vehicle-related accident or even an unfortunate fatality, suddenly AV technology is once again suspect in the eyes of regulators, the media, and the public. Far more often than not, accidents involving AVs are not the vehicle’s fault.
Keep in mind, that air travel is still the safest form of transportation.
Eventually, though, we’ll all become far more confident in these vehicles, just as we did with the airlines, and move past that unreasonable threshold of perfect AV safety in all circumstances. We’ll embrace this opportunity for a significant improvement in road safety overall, and as more AVs fill our roadways, society’s focus on car ownership will shift even further to an AV-enhanced, shared car lifestyle.
When we reach that tipping point in the U.S., there will be far-ranging changes in many areas of our lives, including one area few people have given much thought to – the real estate industry.
Nine Forms of Impact
Here are a few thoughts on how autonomous transportation will impact the residential and commercial real estate industry in the future. Undoubtedly there will be more in the future.
1. Property Values Adjacent to Roads
Currently, residential property values plummet as the location gets closer and closer to major roads and especially interstates. The roar of trucks and gas guzzlers is too much for most people to live with or alongside. But AVs are electric, and electric is quiet. As gas and diesel-powered vehicles dwindle, more people will be fine with living closer to highways. Developers will recognize the opportunity and build far more communities in the current high noise zones adjacent to highways.
2. Garage-less Homes
As people shift to an AV car-sharing lifestyle, they’ll have less need for garages. Some people will turn their garages into spare bedrooms, offices, Airbnb rentals, workshops, or massive storage spaces. New homes won’t be designed around garages, as so many are today – and street views of homes will be all the better for it! In fact, new home footprints will be smaller, and most houses will fit comfortably on smaller plots.
3. Portico Circular Driveways
While we won’t need garages, we will need driveways – most likely a functional circular driveway with the front door at the midpoint under a weather-shielding portico. Home properties will be landscaped in this way so that shared AVs can proceed to the doorway, load and unload passengers, and then continue to the street.
4. Standardized Delivery Boxes
This small but important home feature will accommodate and secure the increasing number of deliveries we receive and the many more that will be delivered soon by AV-delivery vehicles. A number of key retailers will collaborate to develop a standardized delivery box, similar to a mailbox but larger, to accommodate a variety of autonomous delivery service providers so they can securely deposit packages and other items at the home. Existing homes will be retrofitted with this feature, and it will be standard in all new homes. Some new homes may even be designed with a delivery dock or a one-way delivery door into the house.
5. Reduced Emphasis on Proximity
Since automated, shared driving and delivery from point A to point B will involve far less human involvement, home buyers will think less about “Location, Location, Location” and more about “Time, Time, Time.” Consideration about distances to shops and amenities will be overtaken by how we utilize our time along the way. Autonomous vehicles with built-in games and other forms of entertainment will be in huge demand to distract us from the time and distance we’re traveling.
6. Parking Lots will Disappear
Some of the space currently reserved for parking will be used as a staging area for shared AVs. Space devoted to massive surface parking areas and standalone parking garages will be put to better use for parks and new developments. New urban office buildings will need only one level for personal and shared AVs rather than the multi-level parking garages we see today.
7. Car Sales and Maintenance Moves to B2B
Currently, over 10% of retail space is dedicated to the auto industry – from showrooms and brake shops to car washes and gas stations. But as AV fleet ownership consolidates, there will be fewer and fewer customer-facing car businesses. Fleet owners will purchase their autonomous vehicles in bulk, directly from manufacturers and there will be little need for the multitude of new and used car lots we see today. Similarly, auto repair will shift from consumer-focused to in-house maintenance shops by fleet-owning companies. This all means that a lot of valuable land will be available to repurpose for commercial/residential development, entertainment, and recreation.
8. Redesign of Entry-Exit for Public Spaces
Similar to how new home landscaping will accommodate circular driveways, the street-facing layout of public buildings will be designed to resemble a hotel-like, off-street, drive-up/drop-off configuration. Automated systems will manage the flow of AVs coming and going from all high traffic arrival-departure areas.
9. City Expansion
As more people move into cities, cities themself will begin to grow their footprint exponentially, as people pay less and less attention to proximity to goods, culture, and services. Since AVs reduce human involvement and traffic congestion, people will feel liberated to venture further from core city centers to the wide-open spaces of suburbia and beyond.
However, as I mentioned earlier, travel time and how engaged we are along the way, not distance, will be our primary concern when choosing a location. The shared AV option will be affected by the time it takes to free up an AV to travel to the rider’s destination and bring them back again. Since it’s currently more challenging to get a Lyft or Uber ride in the suburbs than in the central city, it will be interesting to see how autonomous vehicles change our urban vs. rural perceptions.
We should remember, too, that shared AVs will not be our only source of transportation. Mass transit AV buses and subways will still be an important element and option. However, these networks will become far less convenient and less cost-differentiated over time and may disappear altogether.
Shared AV-based transportation will be a boon to our cities and society overall. They will not only increase safety but also reduce congestion thanks to improved, sensor-enhanced traffic flow. And maybe just as important, but less obvious, our new lifestyles shaped around convenient shared AV access will allow us to make far better use of valuable land in our cities and suburbs.