Future-Proofing Cities over the Next Decade for Driverless Cars

Driverless cars will have an even greater disruptive impact on society than elevator did more than a century ago, as soon as public fear gives way to acceptance, said panelists at the ULI Washington Real Estate Trends Conference.

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Imagine yourself in the late 1800s riding in an elevator—or “vertical screw railway,” as the device was originally called—for the first time. Then imagine riding one for the first time without a nattily uniformed operator on board. Panelists at the ULI Washington Real Estate Trends conference agreed that driverless cars—which could be thought of as horizontal outdoor elevators—will have an even greater disruptive impact on society than elevators did more than a century ago, as soon as public fear gives way to enthusiastic acceptance.

The driverless vehicle revolution, in combination with already popular car-sharing programs, will require people to rethink everything, said Wes Guckert, president and CEO of the Traffic Group, and moderator David Winstead, former Maryland transportation secretary and now an attorney with Ballard Spahr.

Taxi use is down 15 percent in Las Vegas since Uber was introduced, said Guckert, and many Washington, D.C.–area Metrorail riders who have left the system in response to ongoing disruptions for maintenance may decide to continue ride sharing with services like Uber Pool rather than return to public transit. Gas stations are closing in urban areas, and developers are planning underground garages with taller ceiling heights to accommodate potential future conversion to alternative uses The public sector, however, may not yet be ready for what is in store.

Driverless cars could reduce the need for up to half the nation’s billion or so parking spaces over the next half century, freeing 3 million acres (1.2 million ha)—an area the size of Connecticut—for development or green space to help cool overheated cities, noted ULI Global CEO Patrick Phillips during the conference’s luncheon session A second lunch panelist, Cushman & Wakefield’s Chief Economist Kevin Thorpe, added that because nearly all autonomous vehicles are electric, demand for oil and gas will decline, as will demand for auto parts because electric vehicle engines have fewer moving components.

Perhaps the greatest unintended consequence of the driverless car revolution, said Guckert during the morning panel, is the fact that cities and municipalities will lose revenue they now collect from parking fees and tickets, moving violations, and taxes assessed on privately owned vehicles. Car insurance as we know it today likely will become obsolete.

Though driving in America’s wide open spaces may not change much, congested urban areas are projected to undergo radical changes in land use and zoning, said Revathi Greenwood, director of research and analysis for CBRE. Space required for parking will not only shrink, but also will be configured differently because robotic cars can be parked close together without leaving space for drivers to enter or exit. At the same time, street-level space for pick-ups and drop-offs will need to expand. The need for data centers and transportation-oriented cybersecurity will explode, she said.

Household car ownership is expected to drop 43 percent to an average of 1.2 vehicles per household, Greenwood went on. Most homes will not need built-in two-car garages, and because each parking space adds 25 percent to the development cost of a house, new homes can be built less expensively or with more living space, or both. Just going from a two-car to a one-car garage can cut mortgage costs by 25 to 30 percent.

With the storage space freed up by garages in existing homes, homeowners will have less need to rent off-site self-storage space. Also, driverless cars will make it easier to reach suburban retail destinations and residential neighborhoods, possibly leading to a resurgence of these less dense environments and a decrease in the current premium for transit-oriented development, Greenwood predicted.

When will this all happen? Three conditions must be in place before this burgeoning new technology affects the real estate market in a big way, Greenwood said. Those conditions are safety, latency (meaning self-driving vehicles respond like human drivers, but better), and widespread adoption. Driverless vehicles already are being used in industrial applications, such as mining in the Australian outback, and driverless buses are being tested in several locations, including National Harbor near Washington, D.C.

Greenwood’s timeline has four stages as driverless cars become more autonomous:

  • Technology development stage (2016–2020): licensed drivers with full legal responsibility for the vehicle required.
  • Partial driver substitution (2020–2025): requirements for legally responsible drivers relaxed.
  • Complete self-driving (2025–2029): vehicles can drive and park themselves, but drivers can intervene.
  • Widespread adoption (2029 and beyond): cars are completely self-driven, and drivers have limited to no control. Car ownership will shift to a “pay-per-mile” approach, and the U.S. economy will be significantly altered.

With driverless technology on such a fast track, carmakers do not intend to be left in the dust.

“We expect the auto industry to change more in the next five years than it has in the last 50,” said panelist Harry Lightsley, executive director of public policy with General Motors. “We are ready to lead those changes by investing heavily in game-changing technologies and services.” GM has acquired the San Francisco–based startup Cruise Automation and has introduced the Chevrolet Bolt, an electric car with a 238-mile (383 km) range selling for about $30,000.

GM also has invested $500 million in Lyft and launched its own car-sharing platform under the brand Maven in 16 North American cities. “Most cars sit idle 95 percent of the time,” Lightsley noted. “Every shared car takes the equivalent of 15 others off the road. Ride sharing and automated driving will especially help senior citizens and persons with disabilities.” The driverless car revolution will pay huge dividends to society in terms of enhanced safety, he added, eliminating the main cause of car accidents, human error.

It’s not too late to join General Motors in getting ready for the next big thing in mobility. As panelist Guckert warned attendees: “You’d better Uber yourself before you get Kodak-ed!”

Leslie A. Braunstein, APR, is principal of LHB Communications, Inc., a boutique public relations firm located in the Washington, D.C. metropolitan area. LHB combines the flexibility, creativity, and cost-effectiveness of a small PR firm with the solid experience and outstanding results of a large PR agency. The mission of LHB Communications is to help clients meet their business goals by building their brands and enhancing awareness of their accomplishments among key stakeholders and audiences. Leslie is a seasoned award-winning PR professional with over 25 years of experience working with real estate industry clients and others in the Washington, D.C. metropolitan area, throughout North America, and abroad. Leslie holds professional accreditation from the Public Relations Society of America (PRSA) and a master’s degree from the University of Maryland’s College of Journalism. On behalf of clients and under her own byline, Leslie has published millions of words in a variety of prestigious media including The Wall Street Journal, the New York Times, The Washington Post, USA Today, numerous trade publications, and many other well-known publications and online media. Earlier in her career, Leslie served as served as a public information officer with the U.S. Department of Energy and as a communications manager with Booz-Allen & Hamilton, Inc. For more information, see www.lhbcommunications.com.
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