It’s happening right under our noses, but few of us know it. The newest commercial parking facilities are being designed with autonomous cars in mind — the ones that drive themselves. Some developers are even going so far as to explore ways to repurpose existing parking garages. The question follows: how could autonomous vehicles change residential real estate? Will it render the two-car garage obsolete and increase livable square footage and home values?
Forbes’ Justin Thompson explored this in his article The Value of Your Home Could Get a Big Twist from Autonomous Cars, where he discusses things like how, after dropping its passengers off, the driverless car could simply (1) return to where the trip originated, (2) circle the neighborhood and wait to be called back, (3) head off to a remote parking spot for a while, or (4) just wait for another passenger, like a taxi or an Uber might do.
So if people are presented with an autonomous, on-demand vehicle service might they simply opt out of car ownership? Thompson says proponents point to the success of current ride-sharing platforms and the behavior of younger generations as evidence that this future is already unfolding.
The appeal is, of course, that autonomous vehicle ride sharing could very well offer the same mobility as car ownership without the major capital outlay expenses like insurance, maintenance, and depreciation.
For real estate purposes, a decrease in car ownership would likely translate to a decrease in the need for garage space. No big deal? Think again. In congested metropolitan areas, such as Los Angeles, where square footage sells for a premium, it would be a huge deal (remember-- appraisers do not include garage space in a home's total square footage). When you figure the current average price per square foot for a residential dwelling in LA County is between $400 and $600, it’s an in-your-face proposition. Thompson explains, “A 100-square-foot increase in the size of a home (which is the difference in size between a typical two-car garage and a typical one-car garage) would translate to an increase of roughly $40,000 to $60,000 in home value for a home in Los Angeles County, California. A shift of that magnitude could well incentivize builders to devote less square footage to garage use and more to the livable area of the house.”
He goes on to imagine the economic effects of this, explaining how an increase in home values would likely lead to a hike in property taxes while local government could expect to see an increase in permitting fees for all those garage conversion projects.
It’s anybody’s ball game whether autonomous vehicles will be adopted and integrated into our society. But it’s fun to think of how very differently both our homes and our lives might be affected.
Source: Forbes, TBWS
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