3 Technology Trends that Will Impact the Future of Property Values
Micromobility is a term used to describe transportation solutions for short distances, usually the first or last mile of a journey, such as electric scooters, electric skateboards, shared bicycles, etc. According to a study at the McKinsey Center for Future Mobility, about 60% of car trips worldwide are less than 8 kilometers and could benefit from micromobility solutions. Although there have been growing pains from an adoption standpoint, and there are major concerns about some of the business models in the space, micromobility solutions are growing rapidly and are here to stay. This has some major implications on what cities could look like down the road.
On the one hand, it makes sense to think that this would lead to a rise in demand for city living, as people have convenient and cheap options to travel where they need to go in a city. Getting around used to involve relying on public transportation, taking a cab or driving a car, and then of course Uber came into the fold and simplified things. But the monthly Uber bill can really add up. Now enter e-skooters and bikes, which make it so much more convenient and affordable to get around.
On the other hand though, micromobility is making it easier to get into the city from nearby metro areas. You can live a mile or two outside the city and commute more simply now. At the end of 2019, Culdesac, a new real estate development firm, announced that it will be building a car-free neighborhood in Tempe, AZ (roughly 10 miles from Phoenix). Culdesac is getting rid of parking lots to make room for open green space and courtyards, shops, and other amenities. They are also putting together services like ridesharing, bikes and scooters, same-day grocery delivery, along with any other things you wish you had a car to do. Culdesac also worked with the municipalities on development so that public transport stops right at the new development and will take you into the city for work. If developments like this take off, we could see a big spike in people moving to just beyond the city limits. However, that is of course dependent upon an economic environment conducive to real estate development, so timing will be a factor.
Autonomous vehicles, also known as self-driving cars, have received a lot of hype from the venture ecosystem. Although not much has happened on the roads outside of the beachhead use cases in trucking, it’s fun to think about how self-driving cars could impact the future of where people live and thus, property values.
In 2017, the average American had a one-way drive time of over roughly 25.5 minutes, amounting to more than 100 hours per year commuting. Although ridiculous, that’s how it is. People have been historically forced to come into work, and people that want the luxury of a short commute have had to pay for it. In a world where your self-driving car can take you to work while you’re catching up on email or working on other tasks, you’re more likely to save the money associated with living in the city and hit the ’burbs.
Broadly defined, the future of work is technology that will drive how and where we will work in the future. This includes anything from enhanced video chatting tools to team collaboration tools to cybersecurity improvements. In the context of this discussion, the important part to focus on is where these changes will happen.
There are three big driving forces at play here:
- People have a desire to work remotely
- Technology is being developed to fuel that desire
- Companies have a financial incentive for remote work
According to LinkedIn’s Global Talent Trends Report for 2019, 72% of talent professionals agree that work flexibility will be very important for the future of HR and recruiting. In the past two years alone, there’s been a 78% increase in LinkedIn job posts advertising flexible work arrangements. Also, it’s predicted that by 2027, more than 50% of the US workforce will be working remotely. And companies are saving money by offering/pushing remote work. IBM for example, managed to save $50 million in real estate costs through remote work initiatives.
How does all of this change the cause and effect relationship of where the jobs are and associated property values?