Self driving cars are a hot topic right now - car and technology companies alike are working quickly to develop driverless vehicles. The mass commercialization of driverless vehicles is imminent as the government has officially legitimized it with official policy & law. Therefore, it is just a matter of time before we see the affect of this technology reverberate through our lives, including how we interact with real estate.
Some experts predict that AV’s (autonomous vehicles) will alter the real estate market to an even greater extent than when automobiles first became mainstream. Cars first facilitated a huge migration to the suburbs and created a need to invest in infrastructure. Now, AV’s have the potential to impact the way we use vehicles. Ride sharing, for example, has one of the biggest opportunities to deploy AV’s in meaningful ways. Research indicates that every one ridesharing vehicle takes 9-13 cars off the street, even though only about 15% of adults have used a ridesharing service. In fact, it is estimated that drivers vehicles could eventually reduce the number of automobiles in cities by 90%, which would leave an opportunity to repurpose existing real estate!
Demands on parking lots across the US could potentially be cut in half as ridesharing and AV adoption increases. As a result, it is estimated that 75 billion square feet of space would be freed up to be repurposed. To put this into perspective, about 25% of US cities are currently exclusively devoted to parking. Thus, the opportunity for land redevelopment will be huge! With housing shortages in denser populated areas being a concern, parking structures in prime real estate locations could be replaced with multifamily units. In these ways, Seattle's real estate market could especially benefit from the mass usage of AV's.
The impact on personal real estate will also be large. The assumption is that less people will be purchasing their own self-driving vehicles and will just utilize ridesharing or public transportation more heavily. With the need for fewer cars, driveways and home garages will shrink. In fact, some existing garages could even be converted into additional living space. Construction costs are expected to decline because the need for drivers transporting materials will decline and thus the time it takes to complete a building. Self driving vehicles will also allow the senior population to remain independent for as long as possible. The elderly would be able to stay in the comfort of their own homes for a more extended period of time. Other changes being predicted include more homes being developed per acre with wide streets being a thing of the past. And, consumers will be buying homes where all of the square footage is completely livable.
The widespread adoption of this technology is still a few years away and some predict that it won’t become the “norm” for at least a generation. Ford has announced that it expects to put it’s first AV without pedals or a steering wheel on the market in 2021 and other automakers seem to have the same plan. Overall, the expectation is that AV's will have a positive impact on the real estate market and economy as a whole.
Engel & Völkers Seattle Eastside