Autonomous Vehicles and Real Estate
Really cool blog on the potential impact of self-driving cars on real estate values in-and-around major metro areas.
Other impacts - parking lot sizes and zoning requirements (should decrease), worker productivity (will increase as commuting time becomes work time), and quality-of-life will begin to trump proximity to the workplace when selecting housing.
From the blog:
Autonomous vehicles, aka self-driving cars, are coming. And the world is going to change because of them.
A lot has been written about the “first order” effects of autonomous vehicles (AVs): How they will reduce traffic fatalities, make rides more comfortable, or put truck drivers out of work. But the bigger story here is the “second order” effects — how improvements in mobility will cause us to reexamine fundamental assumptions of how we live.
Let’s start with real estate. Cars (the Henry Ford kind) completely reshaped the built environment of the United States — giving us the suburbs, shopping malls and pulling people out of cities. What will self-driving cars do to our cities and suburbs? Surely something equally as dramatic.
This value will shift from properties with a convenience premium reflected in their current price (e.g. near public transit, short commute) to properties that currently have an inconvenience penalty baked into their price(e.g. long commute, far from city center).
The bottom line: We are going to see a broad shift of value from properties where “convenience” (e.g. good commute, short distance from center) is priced positively into their value to properties where “inconvenience” (e.g. bad commute) is priced in negatively. Those differences will flatten and equalizes over time. This “Great Flattening” represents a tremendous shift in value.