Though Autonomous Vehicles (AVs) are a transportation technology and the field is being pushed forward by automotive companies such as Ford, and technology companies like Alphabet (Google), the adoption and use of AVs will be greatly influenced by private land developers. Transportation and land use are intimately linked; how we get around influences access to our environment, thus how we use that environment. The initial wave of suburbanization in the United States was driven by land speculators and developers who created streetcar lines to serve new residential neighborhoods. In the second wave of suburbanization, developers created the office park, the shopping mall, and the exurb. These land uses were facilitated by the automobile, but they also drove its popularity by creating a dominant land use that encouraged using the car for every trip.
Just as these advances in technology changed our habits and the built environment, the advancement of AV technology could have a huge impact on our lives. AV technology could change our transportation habits by vastly decreasing the amount of effort it takes to drive long distances by eliminating the task of driving altogether which might increase the length of trips we are willing to tolerate. If shared AVs become popular, our transportation could be directed more by algorithms optimized to serve as many passengers as possible. AVs could also drastically reduce demand for parking as vehicles only drop and pick passengers up instead of waiting for them in a garage right at the destination.
How these changes will actually unfold is heavily influenced by the private developers who are directly responsible for creating much of the built environment. Answering the question of how developers are currently reacting to and thinking about AVs is a key part of seeing how the technology will influence our built environment in the next 5-10 years. Virginia Tech graduate student Matthew Rhodes set out to answer this question by interviewing 17 different developers from 14 firms operating in the DC area as part of a Virginia Tech studio class led by Doctor Elizabeth Morton. He asked the participants about their knowledge of AVs, what they perceived the pros and cons of AVs to be, the impact of AVs on current and future developments, and how the benefits of AVs can be maximized by developers and local governments. The following are four key takeaways from these interviews. More detailed findings are available in the full report.
Developers aren’t thinking about AVs very much
Most of the developers interviewed had not had serious internal conversations about AVs and what they would mean for real estate development. Thirteen of the participants said their companies had general conversations about AVs as a way to stay up to date with technology but had not seriously discussed how to incorporate AVs into current plans or how the technology would impact future development. Overall, developers indicated that AVs were not an influential factor in current decision-making. The interview subjects attributed disinterest in the technology to the short horizons that developers usually consider; for a development looking to be sold in under three years, AVs just aren’t on the radar.
AVs could lessen need for parking, but it’s complicated
One major impact experts think AVs might have is in reducing the need for onsite parking because the vehicles would not need to stop driving, and could either return home, or complete additional trips for other passengers. Developers were well aware of these predictions but had more nuanced opinions on how this would impact what they would actually build. They agreed that a reduced need for parking can be a major cost saver, with each spot costing tens of thousands of dollars to build, but developers are building to meet the demand right now, while AVs would only reduce parking demand in the long term. This could even be bad for building return on investment as revenue from already constructed garages and lots decreases. Another point some participants made was that developers are not necessarily the ones deciding how much parking to build. Besides local parking regulations, developers must build to satisfy possible tenants. Parking is especially important to market big box retail and office developments who measure possible revenue based on the number of cars that they can bring to the location. These tenants may expect lower rents if less parking is provided or if existing parking is repurposed.
AV future will require government leadership
From the outside, it sometimes appears that developers are the ones calling the shots. After all, they are designing buildings and signing big deals that can change the landscape of a neighborhood. Some might expect developers to lead the charge on new technology like AVs, but many developers interviewed emphasized the need for government direction and involvement. Importantly, AVs are a transportation technology which means they rely on public roads and infrastructure. Some developers interviewed were skeptical that governments would be able to provide adequate infrastructure to support mass AV adoption. Others pointed out that governments need to incentivize developers if they want them to include AV infrastructure into their plans. Additionally, two developers pointed out that existing TDM regulations and requirements must be updated if AVs change traffic patterns or reduce overall traffic demand.
Forward-thinking developers are testing AVs on specific projects
While the overall takeaway from the research was that AV technology has not been influential in developer thinking so far, there were some exceptions. Several developers interviewed worked for companies that were seriously considering or actively incorporating AV technology into their projects. These developers were from firms that prioritize innovation more than most real estate developers and included AV pilot projects as a way to better understand the technology. Some of these developers also stressed AV shuttles as a good way to enhance customer experience and set themselves apart from the competition. Perhaps the most important common factor between these developers is that they are all focused on developing at a much larger scale, often more than 50 to 60 acres. For these larger projects, an AV shuttle can help move people between spread out locations in the development. At this scale of construction, developers and owners have complete control of the built environment over a large area, making AV integration easier because developers have more control over the environment where the vehicles operate.
Though developers have a lot of control over what the land they build on becomes and it how it functions, local government with its expansive regulatory power over land use, has an important leadership role to play. Developers take cues from, and are limited by, local government. Developers that have acres of land to construct sprawling campuses on are forging ahead with limited AV pilots, but if we want to see AVs flourish, and for developers to prepare the groundwork now, government will have to prod them into action. To prepare for AVs, there are many actions that can be taken right now, such as reallocating street space for pick up and drop off zones and rethinking minimum parking requirements. These actions would be useful right now, before AVs are widely available. The private sector often operates on short time horizons and this research has indicated that AVs are not yet in sight for most real estate developers, but it is one of the jobs of the public sector to prepare for the future.