How Google's Driverless Car Technology Will Affect Real Estate Prices in Los Angeles
Why are people willing to pay ever increasing prices for real estate? Well supply and demand obviously, but what is one of the major factors in demand? Why does a small plot of land in Los Angeles sell for 20 times the price of a square kilometer in say, Mali? Because of the perceived quality of life to living in the geographical location. Such things include amenities (restaurants, entertainment etc.) weather, vistas, air quality, and ease of getting around.
In Los Angeles with the lack of good public transport there is a potential cap I see on real estate prices right because the traffic here severely diminishes the quality of life. It simply takes too long to get anywhere. The more people that arrive here, the more cars that are put on the road, the greater the negative multiplier for this variable in determining demand.
Now, the Google Driverless Car model envisions a world where few individuals will own automobiles, instead there would be a HUGE fleet of computerized taxis zipping around cities picking you up nearly instantly, likely more quickly than the time it takes to find your keys, walk out to your car, and back out of your space. You wouldn’t be paying registration, insurance, parking tickets, traffic fines, and what’s more, not owning a car you wouldn’t have a parking space. In fact, nearly all the land currently occupied by parking lots would change over to far more useful societal purposes such as parks/ green spaces, housing, or office space.
While this will raise the supply of available housing, it will in my opinion, vastly increase the demand for city living (especially LA) attracting many more people to live in our fair weather, thus I conjecture that Google’s Driverless Car technology will increase real estate prices here.
The point is not whether or not I’m correct, but in being able to anticipate how one seemingly disconnected variable might affect another in our increasingly entangled world.
How Google's driverless car will affect real estate