I live and work in Silicon Valley - the heart of advanced technology - so I’ve had opportunities few people have: I’ve taken a ride in a self-driving car. Passengers in Pittsburg are riding in Uber’s autonomous cars, and before long, you will too, because in the next 15 years, everyone will have a self-driving car.
Alphabet, Tesla, and a host of other companies have only a short history developing self-driving cars but, given the skyrocketing demand, they’re also likely to have a long future. Although some of the biggest debates about self-driving cars have been about their safetyand product liability issues, not many people have discussed how they will impact other industries, such as the real estate market.
With only 180 self-driving cars licensed to take the streets in California, we’ve yet to see concrete changes, but here are three predictions for the future of real estate and its consumers.
People don’t drive their cars very often - the average car is parked 95% of the time. For owners of self-driving cars, that idle time could be lucrative. When these vehicles are not in use, their owners could send them off to pick up passengers and pocket the fare from the comfort of their home or office.
And it’s not just the owners who will stand to gain from this arrangement. Passengers will enjoy comfortable, private rides at lower rates than ones offered by Uber or Lyft because the fare won’t have to pay a driver for their time and we’re less likely to see frequent surge pricing. That convenience and affordability also means more people will be able to go car-free and suburban families could decide that one vehicle, if any, is plenty for their needs.
All of this translates to a little extra money in everyone’s bank accounts, which means savvy homeowners can spend less of their budget on transportation and earmark more of it for home improvements like millions of Americans are doing today to the tune of $320 billion dollars.
Progressive homeowners are already using extra money to transform living spaces into smart homes with wifi thermostats, smart lighting, Google Home, and other devices, so I expect that trend to continue.
With the added stress, lower levels of well-being, and potential health complications that result from a long commute, nearly half of Millennial homebuyers are wary of buying homes far from their workplaces.
But that could change once self-driving cars go mainstream. When commuters are freed from the task of actually placing their hands on the wheel and navigating traffic, they could put that time to good use. We’re likely to see, for instance, office workers spending less time at their desks because they took care of e-mails and paperwork while riding to work. And those who can’t, or would rather not, work on their way to the office can spend their time blogging, reading, watching Netflix, or even napping.
With a much more pleasant and productive ride, a house’s proximity to the homebuyer’s workplace won’t be as much of a deciding factor.
This might sound odd at first, but as more people buy self-driving cars, the walkability scores of high-traffic areas will increase.
The big driver behind that change will be parking. Self-driving cars will drop you off at work and then park itself in a different location, whether at your home or in some designated remote area—that is, if they’re not spending that time shuttling other people around the city. As a result, we’ll need fewer parking spots, and those we do have will be smaller. Fewer parking spots will mean more curb space for pedestrians, and more prime real estate locations for businesses, residences, and parks.
With more amenities within walking distance and more spaces for children to play and neighbors to run into each other, cities that adapt to self-driving cars will quickly take on a new vitality and become even more attractive to potential residents.