The American City Was Built for Cars. What Will Happen When They All Leave?
Most of what we buy — bubble gum, blouses, books, baseballs — is destined to last days, weeks, maybe years. But we think of houses as investments rather than consumable goods because houses last decades or centuries. Over that time, what makes a house valuable doesn’t change much: we'll always like plenty of square footage, views, and mostly prefer living in cities with nearby restaurants, train stations and jobs.
And we love parking. Where we live, work and even eat is shaped by where we can park our cars. A car has been the pet that Americans insist on accommodating, in numbers ten times higher than modern parts of Asia like Hong Kong.
But now a change is at hand. Tesla CEO Elon Musk predicts that cars will drive themselves in two years. Chris Urmson at Google estimates it will take five years. Already Lyft and Uber have shifted millennials’ home-buying preferences: who needs a garage, or for that matter a kitchen or a living room, when transportation, food and even a social life are all available online and on-demand? This is why, even as urban home prices boom, we see couples with one car or no cars preferring smaller homes with fewer amenities but a high Walk Score and nearby transit.
In our lifetimes, and the lifetimes of our mortgages, the self-driving car could change the shape of the American city even more profoundly. Unlike the cars of today, which are parked 96% of the time, self-driving cars will be in semi-continuous service except in the wee hours; we’ll need far fewer cars overall, and those that remain will leave town at night.
A third of urban real estate is devoted to parking garages that could become parks; there are eight U.S. parking spaces for every car in operation, for as many as two billion U.S. spaces overall. Thirteen percent of every lot for a typical single-family home is now dedicated to a garage that could be converted into an office or a mother-in-law apartment; with the income provided by AirBnB and other property-rental sites, single-family homes could thus become 13% more affordable. Perhaps a decade from now, architects and contractors may offer fixed-fee garage-conversion services, in much the same way that old houses were once converted en masse to use modern furnaces and plumbing.
Self-driving cars will also change homebuyers’ location preferences. Data from Lyft and Uber already show that when private transit becomes significantly cheaper, public-transit use also increases: many carless households replace the car with a mix of private and public transit. As cars become a service rather than an asset, proximity to bus lines may become less important, but subways and trains that can bypass car traffic altogether will only grow in popularity.
How should this affect your home-buying decisions today? Perhaps not much; the average lifespan of a car is 15 years, so it may be 2035 or later before nearly all cars are self-driving. And we’ll still need at least some parking, not to mention a place for our skis and lawn-mower.
But our guess is that the future, which usually doesn’t come to pass at an even pace, will happen faster than that; there will be a tipping point, driven in this case by the overwhelming convenience and safety of self-driving cars, and by the likelihood that only a small proportion of cars need to be self-driving before real estate prices begin to anticipate a world where most cars are that way.
Regardless of when you want to prepare for the future, here’s our take on what to do about it:
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Don’t pay a premium for a garage. Today the same home with or without a garage costs an extra $50,000 per parking space. A decade from now self-driving cars will make urban homes with less parking more attractive.
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Do pay a premium for proximity to a subway station or rail station. Today proximity to transit adds 30% to a home’s value. As the number of partially or completely carless households increases, we believe that premium will be closer to 50% in a decade.
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And last but not least, consider the possibility that a home next to an unsightly parking garage may one day be situated next to a new park or a new block of coffee shops and restaurants.
A hundred years ago, the car was the reason that cities became something entirely different than villages, with sprawl, painful commutes and gated communities. Now the self-driving car may bring the old idea of a village back to the future.
@glennkelman is the CEO of Redfin, a technology-powered real estate broker. Photo credit: Thomas Hawk on Flickr.
Founder @ Wikiroutes.info and GTFS.pro| Transit data
6yIf such happens our project Wikiroutes.info will save the world))
Senior Accountant at David S. Brown Enterprises, LLC.
7yI have a hard time accepting an article that starts with the premise that cities were built for cars. You make it sound like cities magically sprang up only 100 years ago, when the car moved from an item of status to something the common man could afford (thank you, Ford). Most cities, especially on the east coast, were built to accomodate the horse and carriage, which is why you have some properties within cities having a bit of ground with them. It was to accomodate the carriage house that was built behind the main house. Second, Uber, Lyft, et al have one problem: long-distance driving for vacation. People are not going to want to shell out what it would cost to cross multiple state lines (and for some states, multiple county lines) to go on vacation. People in hobbies who go to expos will need cargo room for any hobby-related items they take to such shows/expos. A bus driver is not going to let you fill the compartment allowed for passengers luggage with whatever cargo you're bringing. People are going to want the freedom the car allows in these situations, to determine what routes they take; how much luggage they need; etc. So I wouldn't start writing the private car's obituary just yet.
Digital Transformation Executive, Cloud, DevSecOps, Architecture & Engineering at Reach Partners LLC Group
7yLate to add something here, but self driving fleets will impact other industries harder and faster than housing. Trucking and transportation of goods will both benefit the most from autonomous vehicles, as well as cause the most harm to the economy because of the number of unemployed drivers. Their saving grace will be safety issues (we still have people driving trains and most subway coaches) or the unions. Counter that with the notion that suburban and rural deliveries could be cheaper and easier than ever before, empowering those not in cities like never before. Much like the shift in manufacturing skill sets transformed much of the US, autonomous vehicles will do the same. It will be massive.
Advogado, Diretor, Consultor Imobiliário, Frasista fundador na CANTELLI ADVOCACIA
7yINTERESTING. BELIEVE WILL EVEN IN THIS LINE . AFTER ALL , THE SHARED CARS HERE IN BRAZIL ARE ALREADY BEING TESTED BY GENERAL MOTORS , ANIMA NOW YOU. If the expertise advances , we will be fewer cars on city streets and the houses may have offices instead of garages.
when the cars leave we'll have roads we can finally walk down like shuffling hobos.