1. Density in major markets will increase.
As is common with unique technology like this, fully autonomous cars aren’t likely to be available at dealerships right away. Instead, they’ll be used by ride-sharing companies in well-mapped cities, further encouraging consumers to favor on-demand car rentals over buying or leasing models.
With fewer and fewer cars permanently housed in urban markets, the real estate around them will adjust to match. Prime real estate such as parking structures, gas stations or auto dealerships may be transformed into apartments, allowing more professionals who work in city centers to live nearby. This will increase density in our cities.
2. Outlying markets will fill out, too.
Anyone who has had to sit in monstrous traffic on LA’s infamous 405 will confirm: long commutes are painful. However, for many residents, living close to work isn’t always an affordable option, and public transportation is limited. As a result, many professionals are stuck in the torturous traffic while throwing away several hours of their day commuting, thinking, “Hey, it could be worse.”
Driverless cars will fundamentally change how we view long commutes. Think about it this way: If you didn’t have to do the driving, wouldn’t you consider living in a suburb so that you could live in your dream home even if it is an extra hour away from your job? I would!
An extra hour that you could actually use to do work, or even prep work, could go a long way toward getting ahead on that project, or sending those last-minute emails, or relaxing with a book you’ve been meaning to read. So I predict that major markets aren’t the only ones who will see populations grow due to the driverless car implementation — so will the suburbs.
3. Housing turnover will decrease, driving renovations.
Transportation plays a huge role in our independence, especially in markets that are as spread out as LA. As seniors age and are unable to renew their driver’s licenses, the lack of transportation to places like the grocery store or bank can force them out of their homes before it would be otherwise necessary.
Driverless cars will be integral in allowing our aging populations to remain in their homes longer. As the turnover of these homes is delayed, these homes can subsequently be renovated to offer sustainable living situations for their elderly owners.
4. Construction costs will drop, but so will home price appreciation.
You might be surprised by how much construction costs are impacted by the cost of transporting materials. Simply moving materials from a warehouse to a property site can add thousands of dollars to construction costs over the course of a single project.
Automated vehicles will allow construction workers to focus on other tasks, driving costs downward — and just in time for that surge of new residential developments I mentioned earlier. Unfortunately for current homeowners who may wish to sell, this wave of new housing will impact demand, meaning it’ll take a while for home prices to start rising again.
5. The modern garage will be redefined and repurposed.
Of course, homeowners will probably always own standard cars — it’s just the most practical approach when multiple schedules are involved. But as the AV model grows in popularity, purchasing three or four separate cars (and housing them) will no longer be the most affordable option available to many families, especially in major metropolitan markets.
When families no longer have cars to fill their three-car or separated garages, we’ll see a trend among homeowners to repurpose these spaces into livable areas, formalized storage or guest quarters — all while adding value to their homes.
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