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Emerging mobility with self-driving vehicles will impact real estate

The construction side of our industry is not often highlighted on this website, nor is the emergence of autonomous vehicles (AVs). However, a recent article published in ‘Urban Mobility Daily and entitled ‘Rides, Roads, Residences’, demonstrates how the construction industry is going to have to change in the light of these self-driving vehicles, and also how the trend may even affect town planning policies and real estate pricing levels.

The article starts by saying that emerging mobility is also at the nexus of the proliferation of smart cities. The growth of smart cities is already calling for changes and adaptations by the construction industry. Similarly, the construction industry needs to be agile in the business models it uses as it adapts to trends such as automated, connected and electrified mobility.

Vehicle automation is already being recognised for use on construction sites indicating the use of these technologies will dominate how the construction industry works in the future. For example, the advent of electric cars created the necessity for overnight charging stations and only now has been incorporated into planning, permission and housing development initiatives. Changes in the built environment are also due to come from changes in behaviour around car proprietorship. City dwellers perceive cars more as a service to use and less as a good to own. The popularity of rideshare, car hailing services and apps such as Uber are a testament to this. Logically, therefore, in a world where private car ownership is reduced, so is the need for parking, and traditional parking structures become dinosaurs that need to be torn down or put to new uses.

Where the construction industry is concerned, the sector needs to embrace innovations such as those coming from AVs and emerging mobility. To remain efficient, business operations will require short, medium and long-term preparations for the AV construction space. Influences range from supply chain impacts, to sustainability in construction.

Space reallocation will come in varied forms such as the reduction of dealerships and parking garages, both public and residential alike. The unlocking of urban land from space reallocation will affect the dynamics of the housing market, such as the increased availability of urban housing. This will also affect the distribution of real estate prices whether looking at land prices or rents, and rearrange urban densities (for example suburban properties become more attractive when the time cost of commuting is cut down due to the use of AV vehicles). In a fully electrified transportation future, traditionally recognised sources of road infrastructure funding such as fuel taxes will falter. Government funding for investment in construction and other sectors will be affected by these changes in funding models.
Tim Harrup
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