What Will Robots Do to Property Values?
Our podcast this week is all about driving. Last spring, we had a podcast on driverless vehicles that heavily focused on its likely positive safety impacts. Over at Economix, economist Casey Mulligan explores another likely effect of both driverless cars and the drone delivery services that Amazon is experimenting with: property values increase in urban centers. Here’s Mulligan’s theory:
As technology helps with moving goods and people more cheaply, it might seem that urban real estate would give up some of its price premium because distance becomes less of an obstacle to economic transactions. Wouldn’t a driverless car cause some workers to sell their Manhattan apartments and commute to their jobs from more spacious homes in the suburbs or even rural New York State?
But don’t forget that many people and businesses currently avoid urban areas because of the monthly expense of owning or renting urban property. New technologies might allow them to use urban properties on a part-time basis, or use less urban property to accomplish the same tasks, which would make urban property more valuable.
A restaurant may need less refrigeration and storage space because it takes multiple food deliveries per day. Grocery stores may save on shelf space by having a greater fraction of their items delivered directly to customers without being shelved in the store. Households may opt for less storage space or parking, for example — and more room for people — when they can get items and transportation cheaply and on time.