NEW YORK CITY
The Society of Industrial and Office Realtors (SIOR) held its fall World Conference at the Sheraton Times Square Hotel in New York City last week. On Saturday, October 22, 2016, MIT and SIOR Collaborated on a Partnered Breakout Session entitled “New Industries and Commercial Real Estate.” The first part of this session, The Future of Autonomous Vehicles, was a keynote address by Dr. Ryan Chin, Former Head of the City Science Initiative at MIT Media Lab & Founder, Optimus Ride. He discussed his work with self-driving vehicles, ride-sharing, other forms of autonomous mobility and the impact on real estate design and development. This is the first program in which MIT and SIOR have collaborated to create a partnership to bring high level research topics to the SIOR community. The New England Chapter of SIOR will also be teaming up on November 16th at Brae Burn Country Club in Newton, MA for a joint Scholarship Awards Night. Two scholarships will be given by MIT and the New England Chapter to up and coming real estate professionals to be used for real estate education tuition.
Steve Weikal, Head of Industry Relations, MIT Center for Real Estate was the moderator for this Saturday morning NYC event. Dr. Chin started his presentation with the Self-Driving Car. This new car will be able to drop you off at work and then go home and then later pick up at work. It will cut down on emissions and the need for urban parking. The car will come and go. The bad news is that there are experiences such as in Beijing where the traffic is so horrific. The commute is anywhere from 5 hours to get to work to 9 days, yes there was a 9 day back up on Chinese News Year. The good news is that the self-driving car is a self-driving taxi. There are less emissions, less fuel and less accidents.
Globally, we have now moved past the 50% urbanization threshold. There are more people that live in an urban area than not. In the U.S. for off-street parking, 50% of the land area is used for cars, garages, parking lots, etc. Pollution has decreased. Problem today though is that a car is now heavier and faster than 40 years ago. The average car speed in NYC is 18 mph and in London it is 11 mph. The car has lower average speed today but today’s car can go 300 miles on a tank of gas. Much better fuel mileage than 30 years ago but the only problem is that the US car driver only goes short distances.
There are 1.5 million parking spaces and some say 1 billion parking spaces in the U.S. But we only drive 1-2 hours per day. 40% of the time we are driving looking for a parking space. Conclusion: the car is over-engineered because the consumer wants it. Solutions: London and Singapore created congestion taxes at city levels but not at the state level. Oslo, Norway has banned all cars completely.
Dr. Chin brought up three factors for the Self-Driving car. We need:
2. Vehicle Sharing
Tesla has an electric car that could be the solution to electrification. However the ownership of cars with Millennials has changed. More people today use Uber and Lyft or the Silver ride; that’s vehicle sharing. It cuts down on traffic, emissions and need for city garages.
So what are the Differences within Self-Driving Cars? There are 3 levels of self-driving cars and we have only achieved 2 of the 3 levels.
1. A self-driving car can fully be autonomous or what is known as Level 4. A Level 4 car does not exist today. It is a car that has no driver and drives itself. It is like an elevator. You push a button on an elevator and it goes by itself. This car commonly can travel at 20-30 mph but it can’t go at 80 mph.
2. A Level 3 car. We have Level 3 today which is semi-autonomous. You, as the driver, are behind the wheel and there are times you have to take over the steering. Think of it as the elevator from 100 years ago. The elevator with the cages and switches to go from floor to floor. The big problem is that people think semi-autonomous is actually full autonomy. They do not understand the concept that the driver is still in need. The result is that the driver can tune out at times in the first hour of a semi-autonomous car and then there are car crashes. The car still needs you as a driver.
3. This Level is the Shared Economy car. This is the car that is shared with other passengers such as Uber but an Uber still needs a driver. It is not autonomous.
Dr. Chin concluded that we are still aways from being autonomous but the impact on cities and real estate would be enormous. If we were fully autonomous then cities would have a great deal of extra land for development. The parking garages, surface parking lots, off-street parking, parking under office buildings is greatly diminished or eliminated leaving space for further uses.
I hope you enjoyed the summary.