Autonomous vehicles have been on the horizon for the past several years. As their implementation draws closer and closer, the impact is beginning to be realized across other industries. The real estate industry is no exception. As this technology moves forward, real estate will be reshaped. What will cities look like if parking is no longer needed? How will logistics companies respond and change their operation bases? Will the rapid shift of population to urban areas be reversed? Exploring these outcomes will paint a clearer picture of what our real estate industry will look like once autonomous vehicles become wide spread.
Projects such as the Denizen development are a benefit to all parties involved. Designing an adaptable space that can be refit for future needs allows a community to more easily adapt to the future. Doing something as simple as building ground level parking in a way that can be retrofit allows for the development to more seamlessly fit into the city as the future comes into being. Developments that feature adaptability are becoming more common across the United States as savvy developers realize the benefits of an adaptable space.
SpotHero has been a very successful platform that has allowed drivers to easily rent out parking spots in cities. Providing a platform to allow consumers to easily find a parking spot for days at a time has allowed the app to be a pioneer. As autonomous vehicles move towards reality though, it has become necessary to rethink how the app can operate. Speculating on future scenarios where entire fleets of vehicles will need to be parked, conversations have begun on how the app will be utilized by companies in the future. SpotHero is present within some 6,500 garages across 300 cities. This is a massive amount of parking real estate that may fall by the wayside if personal vehicle ownership becomes less common in the future. Finding the best way to utilize this real estate moving forward may allow these parking spaces to maintain value. Facilitating the rental of a mass amount of parking spots aggregated from individual owners will allow companies to locate their vehicle fleets closer to where they work while allowing individual parking spot owners to maintain a consistent return when their spot is not being utilized.
The Newhall Ranch development is a forward thinking master-planned community outside of Los Angeles. In addition to net zero energy goals and electric vehicle charging stations, residences planned in the later phases of the development are being planned with no garages. This has yet to become a reality, but shows how developers are speculating on the future of autonomous vehicles. A major component of this becoming a reality is consumer demands. As we move towards an autonomous vehicle future, the questions remain on consumer preferences. Will suburban homes with no garages sell? Will people move away from owning personal vehicles? This type of development may be more common in the future. Ultimately, on the surface it seems to be a smart play by the developer to save on construction costs and eliminate unnecessary features on newly constructed suburban homes. The speculation has yet to play out in actual construction and home sales though. Monitoring future suburban developments will give insight to whether or not this becomes a common developer speculation.
Quicken Loans and Bedrock have multiple offices in Detroit, employing somewhere between 15-20,000 people. With this many employees and Detroit's lacking public transportation system, providing parking for this number of employees brings its problems. Allowing employees to park in satellite locations outside of downtown creates more economical parking situations and eases employees' commute by reducing congestion in the downtown area. Models such as this that allow for off site parking with direct shuttles to final destinations may become more common in cities that lack a robust public transportation system.
This embedded excel file shows a simplified financial breakdown of how developments like Newhall Ranch could be projected by developers. Removing garages from suburban homes can allow for more dense developments through smaller lot sizes. This denser development could still maintain the feel of current day less dense suburbs due to the removal of about 400 square feet of structure due to the lack of a garage. This basic financial analysis shows that a developer could expect somewhere between a 3-4% increase in profit margin if consumers are willing to forego having garages for personal vehicles in the future.