As self-driving cars hit the road, real estate development may take new direction

An Uber driverless Ford Fusion drives down Smallman Street on September, 22, 2016 in Pittsburgh, Pennsylvania.
Jeff Swensen / Getty Images

The futuristic vision offered by automated vehicles—the freedom to be active during your commute instead of wasting away behind the wheel while stuck in traffic—isn’t quite as utopian a scenario when you run it past cautious and concerned city planners.

Ask Don Elliott, a zoning consultant and director at Clarion Associates in Denver, and he’ll tell you the idea of empty cars congesting city streets and mobile offices zipping around main roads can become downright dystopian.

“I’ve seen the blood run out of people’s faces,” he says when talking about the impact of automated vehicles on transportation, land use, and real estate. “For years, planners have been fighting for a 1 or 2 percent change in transportation mode [getting more people to use transit or bike instead of drive]. With this technology, everything goes out the window. It’s a nightmare.”

The much-hyped transition to autonomous cars, while still years, or even decades, away, according to experts, is an opportunity and challenge that has wide potential to reshape our transportation systems.

But many believe that as city planners, transportation officials, and, eventually, developers start grappling with the changes to come, autonomous vehicles’ potential to reshape real estate, development, and city planning will rival that of the introduction of the automobile. At the American Planning Association’s annual conference earlier this month in New York City, the issue of autonomous vehicles and driverless cars, one admittedly far in the future, was the subject of numerous present-day panels, discussions, and debates.

A recent policy brief by the Institute of Transportation Studies at University of California, Davis, was even more clear. The convergence of three new technologies—automation, electrification, and shared mobility—has the potential to create a whole new wave of automation-induced sprawl without proper planning and regulation.

“This will completely change us as a society,” says Shannon McDonald, an architect, assistant professor at Southern Illinois University-Carbondale, and an expert in future mobility planning. “I think it’ll have the same transformational change as the introduction of the automobile.”

With no real timeline for how or when this technology will roll out, there has been little in the way of planned regulatory response. The federal government released suggested guidance on autonomous vehicles (AVs) last fall, a series of national test sites have begun to look at safety and urban-design issues (as local government officials jockey for the spotlight), and the National Association of City Transportation Officials (NACTO) released a set of policy suggestions in response to the potential impacts of AV.

And, as Elliot noted, there are currently 263 million non-autonomous cars on the road, and roughly 2 billion parking spaces in the United States. While tests, such as the recently announced Waymo trials with families in Phoenix, may have already started, it will take a long time for AV tech to dominate our roadways.

Waymo’s new AV trials on Phoenix, featuring minivans, are testing the technology in a more suburban environment.

But that hasn’t stopped many planning and development experts from thinking about the ways this technology will reshape planning, cities, and, eventually, real estate. As local governments deal with important transportation and land-use issues, the results of these decisions will potentially inflate or depress real estate values and change the way developers operate. Even expected shifts in roadway and traffic design that will be made in the next few decades suggest big shifts will come to future development.

“Streets are 25 to 35 percent of a city’s land area… [the] most valuable asset in many ways,” says Zabe Bent, a principal at transportation consulting firm Nelson\Nygaard and a speaker at the APA conference. “We need to really think about how we manage those spaces for the public good and for reducing congestion.”