4 Ways Smart Cars Are Disrupting CRE — For The Better
Increasing public transportation access, combating environmental pollution and relieving urban traffic congestion are some of the most pressing challenges facing the commercial real estate industry in the coming decade. One big potential solution is smart cars.
Noel Hyun of Liner LLP offers four ways smart cars will transform the commercial real estate landscape — for the better.
1. The Creation Of An Electric Charging Network
California has one of the best networks for electric vehicle charging, but it is still not fully built out. With Elon Musk and Tesla’s latest mass-production vehicle — the Model 3 — it may be only a matter of time before drivers will be demanding electric car chargers installed in every apartment or office parking lot in town. For newer projects requiring complex entitlements, the City of Los Angeles Planning Commission has begun requiring EV-ready parking spaces.
The question is whether landlords or developers will think of this potential need in advance. If not, many may find themselves shouldering the costs of upgrading electrical panels and installing conduits to outfit residential and commercial parking spots with chargers. Companies like ChargePoint and Blink are largely anticipating this future need and looking to manage such services for property managers and landlords. In some cases, landlords can offer them as an amenity or monetize the charging stations.
Similarly, in the car-sharing field, companies like GM and Ford may pivot from being auto manufacturers into full-service transportation companies. Tech-driven car-sharing service Maven has been aggressively focusing on its version of ZipCar, which may form the groundwork for a fleet of self-driving cars.
2. Redeveloped Gas Stations And Strip Malls
More than a few corner gas stations have been redeveloped, and that trend will continue as fewer Americans buy cars, cars become more fuel-efficient and the industry shifts to electric cars. Those corner gas station lots have never been more valuable, especially in Los Angeles where the city is making a big move to incentivize and streamline development in commercial corridors and near transit.
Even more interesting may be the ongoing shift in retail and how car-oriented strip malls will be impacted by self-driving cars, which will render seas of parking spaces unnecessary. Specifically, the city’s soon-to-be released Transit Oriented Communities Guidelines (the silver lining of Measure JJJ) will largely up-zone key commercial corridors. It is simply a matter of time before gas stations and strip malls also see a shift as well.
3. Quieter Cities
Many people underestimate how much street noise is attributable to the sound generated by internal combustion engines. With the advent of nearly silent electric smart cars, cities and urban areas would transform into quieter places to live. Silence would work to the benefit of developers, as environmental analysis for projects would evolve to take these changes into account. California cities are already working to update traffic generation methodology, and they will also have to update other standards to reflect the pace of technology and behavioral change.
“Smart cars will change traffic, air quality and [how] greenhouse gas analysis is done,” Hyun said. “They are going to disrupt the ways that we predict human behavior.”
If construction equipment would similarly move away from fossil fuels and internal combustion engines, that would have an even larger effect on construction impacts in urban infill communities.
4. Cleaner Air
Nearly 150 million Americans live in regions that do not meet the minimum national standards for air quality.
The primary source of these pollutants? Non-electric vehicles. Vehicular transportation in 2013 accounted for over 50% of nitrogen oxide and carbon monoxide in the atmosphere, as well as nearly one-quarter of the global hydrocarbon output.
With more electric cars producing zero emissions zipping onto roads nationwide, cleaner air will equate to a healthier population and could reduce the number of deaths resulting from airborne particles.
In Los Angeles, there has been an ongoing debate as to whether housing production near freeways poses a health risk. With improvements in greenhouse gases, it is likely that cities could be less hesitant about these health impacts. It could render freeway-adjacent land more easily developable.
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