Where will the next big evolution for housing markets and residential construction originate in the years ahead? One good bet would be self-driving cars. Currently, much of the innovative technology that has been developed does not represent autonomous, self-driving cars but rather functions as driver-assist tools. But perhaps in the decade to come, fully automated cars will come to dominate travel.
What impact would such a change have on housing? It’s difficult to quantify, but let’s consider effects on residential construction, housing demand, and design.
One factor that drives the cost of rent in multifamily buildings is a required quota of parking spaces. Such requirements include additional costs in terms of land acquisition and parking lot or garage construction and maintenance. High rents reduce rental housing demand and crowd out budgets that could be dedicated, in some cases, to saving for a down payment for a future housing purchase. Fleets of automated, reliable cars would make a strong case for communities to reduce parking requirements, particularly for high-density multifamily developments. This change would grow multifamily supply and reduce rent burdens.
While the first impact would tend to increase population density, particularly in central cities and large urban areas, driverless cars also could increase the number of areas suitable for single-family community development. More efficient roadways would reduce travel times and grow the size of markets in which buyers could “ride until they qualify.” If commuters are free to work, socialize, or otherwise spend their time not driving, the mental cost of commuting would be lower. A less-taxing commute would mean that people could live farther away, in homes and neighborhoods perhaps more to their liking. This effect could spark a renewed round of exurban development.
Third, the home building industry knows the labor shortage in construction is not going away anytime soon. However, true automated vehicles would reduce the number of jobs in the transportation sector, perhaps providing a new source of construction workers.
Lastly, automated cars could directly affect the purchase and design of homes. Buying a car is a large purchase. Greater availability of on-demand cars means a smaller budget need for cars, thus increasing money available for other household goods, including housing itself. This would also mean additional interior space within homes and less space dedicated to car storage. On the other hand, if people work in their cars more, such a change could also mean a reduced need for home office space.
It is difficult to forecast the precise effects, but it’s clear that if driverless cars come into heavy use in the years ahead, it will produce many changes for housing and home building.