Autonomous Vehicles Create Huge Opportunity for Real Estate

11 minutes read

Sooner or later, a huge real estate opportunity will present itself, thanks to a technology that is rarely discussed in the industry: autonomous vehicles.

Standing in the way: organized labor.

What do driverless cars have to do with real estate? Personal vehicles are parked 95 percent of the time, monopolizing space wherever they are or might be.

Shared, autonomous vehicles that riders can summon with their phones, like the Waymo taxis operating right now in San Francisco, make a lot more sense. They are on the road most of the day, shuttling riders around. No parking spaces need to be set aside for them, except to charge.

A shared vehicle can replace 16 personal vehicles. That frees up parking spots near people’s homes and wherever they might travel. Think of the vast expanses of concrete surrounding suburban supermarkets, big-box stores, malls, offices and commuter rail stations.

Even the parking in front of strip malls could be repurposed, like New York City did when it allowed curbside dining during the pandemic. It was broadly popular with restaurants and their patrons.

Housing and commercial development will cost far less as localities reduce or eliminate parking requirements, which are often two spots per home.

You might be thinking that Americans love their cars, SUVs and pickups, and will never give them up. But they love their smartphones more. People like doing stuff on their phones that they cannot (safely) do while driving.

A personal vehicle also costs a family, on average, more than $1,000 per month. Saving money on vehicle purchases and maintenance will also motivate them to use AVs.

Safety is another factor. Although opponents of AVs point to their occasional crashes as a reason to ban them, human drivers crash far more often than Waymos. This has taken an incredible toll — 45,000 deaths and many more injuries every year. The fatality rate jumped 20 percent from 2013 to 2023, probably because drivers were using their phones.

As self-driving vehicles become less expensive and more available — as always happens with new technology — shared AVs will likely replace many families’ second vehicle and eventually their first one.

What could slow this progress? Unions.

Unions are understandably concerned about what 4 million professional drivers will do when most for-hire vehicles are driving themselves. Organized labor reflexively opposes automation. In New York, the Transport Workers Union is trying to pass a law mandating that every subway train have two workers on it. (AirTrains have none and work well.)

The TWU got Gov. Kathy Hochul to cancel an AV pilot program this year. In a press release, the union made the usual claims about threats to safety but also admitted that its primary goal was saving drivers’ jobs.

These fights are happening across the nation. In Illinois, a bipartisan bill would authorize AV pilot programs in several counties, notably the one including Chicago, and would put self-driving cars on track for statewide legalization three years later, the Chicago Tribune reported.

In response, the Teamsters and other unions massed at the statehouse last week to lobby against the legislation, which they claimed would have “a major domino effect against the middle class.”

Of course they raised safety concerns about AVs but not about personal vehicles, which are leaving a trail of carnage across the country.

How long will unions be able to keep a safer, cheaper alternative off the road? I don’t know. But not forever.

As AVs take over, professional drivers will have to find something else to do. This pattern has been repeated throughout history as technology has improved.

The printing press, farm equipment and textile machines wiped out millions of jobs. Telephone switchboard operators are long gone, as are workers who would knock on townfolks’ doors each morning (before alarm clocks existed) and light and extinguish gas streetlights every day.

Some drivers’ lives will be disrupted, but AVs will allow for a more productive use of human labor — and, as noted, real estate. It’s a matter of when, not if.