America’s transportation sector and the real estate market have always had a symbiotic relationship. Migration patterns inform transportation’s infrastructure demands. Meanwhile, in America’s urban areas, public transportation influences mobility and ultimately, economic opportunity.
At the Future of Real Estate Series event held last week, former U.S. Secretary of Transportation and current Chief Policy Officer at Lyft, Anthony Foxx, joined Qualia CEO, Nate Baker, to discuss parallels between transportation and real estate and how automation in transportation is influencing how we work and where we live.
Americans are moving away from cities, will this trend sustain?
During Foxx’s time as Secretary of Transportation, there was a pronounced trend toward urbanization. Now, “COVID has introduced a variable that challenges [the trend toward urbanization],” Foxx said. “People are trending away from density… if this trend is sustained, it will drastically impact what we’ve been preparing and planning for.”
According to Foxx, over the past 15 years, the development sector has been positioned for more multifamily housing opportunities in dense urban areas. Meanwhile, the transportation sector has been planning and executing urban transportation infrastructure. From Foxx’s point of view, density at the urban core is “the best determinator for a higher quality of life” because it opens up economic opportunities for Americans through easier access to necessities like work, food, and healthcare.
Foxx is unsure whether the trend away from the urban core will sustain; however, he cautioned that governments should prioritize incentive structures that “point us toward greater density at our urban core.”
Automation in transportation: shaping where and how we live
While the pandemic is currently shifting where people live in the US, Foxx noted that automation will ultimately impact where people live and how people work in the future.
Automated payment systems: making city commutes seamless and accessible
Automation in transportation is making it easier for people to move from one place to another. “This is going to create an environment—particularly in our large cities—where pedestrians can move seamlessly from one place to another,” Foxx said. He highlighted automated payment systems as an example. A commuter could plan a seamless trip from their mobile phone using the subway system, city bikes, and transit bus, and pay for the entire trip with a touchless payment system.
Autonomous vehicles will reduce the cost of living in America
Foxx said that when he was young, owning a car was the ultimate dream. “That [pull towards owning a car] has been hard for us to get away from as Americans,” he said. “But what I think is coming is a movement toward fleets. Services like Lyft and many other players who will own the car and you can use it for a particular trip.” Foxx noted that this shift is important because it “disaggregates the cost of owning the means to move, to owning a portion of the means to move.” Ultimately, Foxx believes this shift will give people more disposable income and more choices when it comes to housing.
Autonomous vehicles could change how people work
Self-driving cars enable the “driver” to reallocate their time from observing the road to working on whatever needs their attention. “Theoretically, you could move farther out [away from cities] with autonomous vehicles,” Foxx said. “People will translate longer commute times into work time because they can spend time working in the car.”
Foxx acknowledged that the need to commute to offices in the future is yet to be determined in the aftermath of the COVID-19 pandemic. While some believe that working from home will become the norm, Foxx believes that workspaces will still be largely outside of the home moving forward. “Zoom is great, but it’s better to be across the table from people,” he said.
Automated transportation is not far off
Foxx noted that autonomous vehicles are already in operation in some cities such as Phoenix. “The question is when we will see it in a more ubiquitous fashion,” he said. “I’d say in certain cities, within the next two years, we’ll start to see autonomous cars [become ubiquitous].”
Foxx harkened the shift toward self-driving cars to the formal requirement of the seatbelt. “It took 25 years for seatbelts to become fully-integrated. Similarly, it will take time for [autonomous vehicles] to be fully integrated.” He added that if consumers start using car renting services more frequently, it will accelerate the rate of change.
Moving forward: the role of policy
Policy changes will play a major role in transforming both the real estate and transportation sectors. Foxx noted that real estate has an excellent template to work within for influencing legislative changes. “As an industry [real estate] has a really active engagement with local elected officials at a state level,” he said. “There are state-wide groups that create a strong infrastructure through local and state chambers.”
He recommended that the real estate industry unites to agree on legislative priorities. “Have an agenda to take to the state about what you stand for and why and begin engaging over that,” he said. Foxx also noted that staying ahead of the curve with consumer demands is paramount. “If you wait for things to happen it’s too late. Stay ahead of things and keep the eyes of local officials on the future,” he said.
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