Driverless Cars Could Fuel An Exurb Boom
February 13, 2018
Driverless cars may sound like an idea ripped from a sci-fi movie, but the technology is real and expected to hit roadways over the next decade in a big way. As more people warm up to the idea, driverless cars could have a big impact on where people decide to live, according to a new poll from the National Association of Home Builders.
Sixty-three percent of consumers recently surveyed said that if they owned a driverless car they would “definitely” or “maybe” feel more encouraged to move further away from their work. Younger people surveyed said they’d be more likely to move away from work if driverless cars became a safe and reliable commuting option. More than 60 percent of millennial and Generation X members said they might be encouraged to do so, compared to only 18 percent of seniors.
“Real estate might be the industry that is most transformed by autonomous vehicles,” David Silver, who teaches self-driving engineering at Udacity Inc., told Bloomberg. “It could change real estate from a business that is all about location, location, location.”
Investors such as Ric Clark, chairman of Brookfield Property Partners LP, a large real estate investment firm, is already weighing options of what to do with the space that could one day be freed up by driverless car roadways. Brookfield’s $152 billion in real estate assets include about 175 malls across the U.S. where “the biggest physical acreage is surface parking lots or structured parking,” Clark says. “For years, we have seen this stuff and thought we would love to build apartments or maybe if there is a higher and better use we could build on it.”
Driverless cars could free up areas for entirely new neighborhoods. In New York, for example, parking covers an area equivalent to two Central Parks, according to estimates published by Moovel Lab.
David Williams, technical director at insurer Axa SA, travels more than three hours a day between the northern suburb of Bury St. Edmunds and his work in London. “Imagine if my entire journey was much more flexible, much more integrated—no waiting round on cold platforms and I could be doing something else from A to B,” Williams told Bloomberg. “Would that mean the city effect of increasing house prices spreads further out?”
Source: “Driverless Cars Have Potential Market,” National Association of Home Builders’ Eye on Housing blog (Feb. 9, 2018) and “A Driverless Future Threatens the Iron Laws of Real Estate,” Bloomberg (Feb. 5, 2018)
Updated: December 10, 2018