|The news this week that the "self-driving" car company Waymo was granted the first permit in California to begin driverless testing on public roads was another small step towards a total transformation in how we get around — and another reminder to affordable housers of opportunities in unlikely places: in this case, generic parking lots, conventional garages, second-tier suburbs, and forgotten exurbs.
There’s lots of debate about how and when autonomous vehicles (AVs) will become mainstream and ample reason for skepticism about the most bullish forecasts. Nevertheless, as a report from RCLCO points out, "The shrewd real estate strategy is to begin planning for this evolution today, well before its ripple effects are felt, and even if the Jetsonian future we all imagine is still far off."
Parking is a key focus for any smart strategy. Parking spaces consume 15 – 30 percent of urban land area, according to Green Street Advisors. The advent of AVs could cut parking demand by half or more over time, freeing up billions of square feet of developable or re-developable space in quality locations. Substantial new opportunities to create affordable housing in strong locations may soon present themselves, to those who are ready, in cities across the United States.
For example, the Wall Street Journal reports that global design firm Gensler "is exploring ways to convert stand-alone parking garage structures into apartment buildings that could be used for student or other forms of low-cost housing," in part through modular building components. Savvy commercial real estate investors are actively buying and "land banking" well-located parking assets for future re-use. Will affordable housing capital get in the game?
AVs may also alter the trajectory of suburban communities whose luster has dimmed due to long work commutes required of their residents. As author Richard Floris observes, "Self-driving cars are likely to make those [middle suburbs] more valuable and turn them from working-class areas to more upscale areas." This underscores the importance of affordable housing preservation, starting now, in places poised for repositioning in a new transportation landscape.
At the same time, AVs could help make farther-flung locations, where development costs and housing prices tend to be lower, more viable for new affordable for-sale development. A report from the MIT Center for Real Estate sponsored by Capital One suggests, "This acceleration in sprawl is the natural next step for areas that rely on private car usage and are underserved by public transportation."
Even some of the anticipated economic disruptions AVs are expected to cause could have a housing upside. Workers displaced from auto and trucking industry jobs may help fill construction labor shortages and AV-enabled round-the-clock building product delivery "should allow for faster new home construction at a lower cost," according to John Burns Real Estate Consulting.
Transportation and housing policy are inextricably linked. The biggest transportation transformation in decades is accelerating before us. Housing has to keep up, or it will fall behind.