We’re starting to see the impact that self-driving, autonomous vehicles will have on real estate development. It corresponds, interestingly ,with the same trends we saw in the recent WalkUp Wake Up Call for DFW: these will be two major real-estate-driven boons to our local economy that will change the landscape of our cities over the next few decades.
If you’ve been following the autonomous vehicle conversation, you know there are LOTS of different companies working on AV technology with a variety of different applications, from long-haul platooning to neighborhood delivery robots and everything in between. Experts from Mobility e3 & Stantec broke down the real estate impacts of AVs at a panel discussion hosted by Munsch Hardt law firm.
Bottom line, the AV technology with the greatest impact on local real estate development will be the AVs adept at navigating high pedestrian densities. That is, once the novelty wears off and people stop jumping out, playing with, and laying in front of them, making for a very long and jerky ride. There are a few companies honing this technology for high-density, mixed-use areas where originations and destinations are within relatively close proximity. Navya is one. It’s a French company that built one of the first driverless vehicles and has been operating a driverless shuttle minibus in Las Vegas. They just delivered a public bus fleet to Oslo, Norway.
All but one of the prototype vehicles in use in the U.S. now are small vehicles carrying 4-8 passengers.
AVs may someday replace long-distance commuter vehicles, but the turnover rate of privately owned vehicles puts that market saturation point (80 percent adoption) closer to 2050, said Kelley Coyner, CEO and founder of Mobility e3.
In the shorter term, Coyner notes, the greatest impact will be in high-density, mixed-use neighborhoods (WalkUPs) where empty nesters, young singles, and Millennial families are opting for an urban lifestyle. We already see trends of lower personal vehicle ownership in some higher-density areas, especially where well-connected to multi-modal transportation systems. Corner says we could see 75 percent market deployment of AVs in these areas as soon as 2025.
The real opportunity in real estate development is created as parking demand decreases significantly and cities update their parking requirements. Structured parking can cost $25,000 to $45,000 per parking space to build, so the potential savings to developers will be huge. The development potential of sites will also be maximized with lower parking requirements and surface parking lots will begin to redevelop.
Surface parking lots take up a large portion of downtown Dallas real estate. A 2018 study of parking in five U.S. cities reported there are few if any local inventories of parking lots and most cities are over-parked. The current redevelopment of a parking lot in downtown Dallas into Pacific Plaza park is a prime example of how our urban landscape could change dramatically with less parking required. The 10 acres of mostly surface lots at Ross Ave and Field St in Downtown Dallas, purchased by Headington Companies years ago, could be one of the first private redevelopments in this massive real estate transition that we’ll see in Dallas.
A 2017 study projected that, in 15 years, private car ownership citywide in Dallas will drop 31 percent. Even for those who access these WalkUPs by driving a privately owned car, once the car is parked, transportation throughout a district may be simpler by other modes of transit. That’s the vision, which we’ve seen become more of a reality with the recent bike-share and scooter-share operations. There is demand, even in North Texas. Now to fine-tune the practices and policy side.
Coyner says we may soon see full-access mobility passes that include everything from mass transit to ride share to car share, all paid by a monthly subscription. Live your transit-rich lifestyle with all the transportation options at your fingertips.
That is, of course, if our state and local development policies can get ahead of the curve to plan for AVs, allow AVs, and adapt our cities to the needs of a robust AV system. Not surprisingly, California began this month accepting applications for driverless car permits.