Driverless cars will soon be hitting the streets and possibly the real estate market. According to Forbes, driverless cars could be seen regularly on California roads as soon as April and their transit hubs may have a big impact on real estate.
Companies such as Google and Uber have been steadily working toward a future where autonomous vehicles are the norm. In fact, the British government has even begun reviewing laws regarding autonomous vehicles in preparation for their big debut in 2021.
Should the autonomous vehicle take off, the future of public transit and the value of real estate properties surrounding transit hubs may be uncertain. The value surrounding commute-friendly real estate has recently gone up what with millennials having a significantly lower rate of car ownership and baby boomers retiring to urban areas. That value would increase even more once autonomous vehicles become a regular feature of the road.
“Clearly, any sort of big transit infrastructure program can act as a huge stimulus for the development of surrounding real estate,” said Scott Homa of real estate firm JLL. “It’s starting to emerge as a universal theme across the U.S.”
Autonomous vehicles could make public transportation that much more popular and may reduce the need for many Americans to own a car. However, the autonomous vehicle could also make access to public transportation less essential to commuters. Residential and commercial properties that are close to public transit areas may become obsolete or lose business.
For instance, a person who needs to get to work but is unable to drive may choose a home that’s close to the subway or bus station. An autonomous car may make choosing such a home unnecessary.
Likewise, a business that’s close to the bus station may receive more customers because they’re in a convenient location for travelers. This can be incredibly beneficial to those with a triple net lease, where the tenant agrees to pay the building insurance, maintenance fees, and real estate taxes. However, once public transportation becomes unnecessary, the number of customers reduces.
“[Autonomous vehicles] are expected to significantly reduce travel cost, time, and congestion, while increasing safety,” said KPMG, a service company and accounting firm. “Cost-efficient self-driving cars could change commuter preferences away from conventional public transport.”
Autonomous vehicles could very well increase safety on the roads. After all, approximately 80% of all bumper scratches occur when a driver is behind the wheel of their own car. However, whether or not they’ll be safe among other drivers who aren’t as exact to the laws of the road remains to be tested.
That being said, until autonomous cars vehicles safely and efficiently drive on U.S. roads and until self-driving vehicles gain popularity, their impact on real estate and public transportation remains unpredictable.
For now, the only industry potentially feeling the impact of the self-driving craze is the metal industry wherein over 1,600 million tonnes of steel were produced around the world in 2016 alone. With a greater number of cars on the horizon, the amount of steel produced increase substantially this year.