My bet is driverless cars, whenever they arrive, will actually increase the value of rural/small town land that's ~1 hour from a city center.
Hypothesis is many people live close to the cities because they hate commuting. But if commuting means work on a laptop or watch a movie, then the commute time is less significant. It's the near ring suburbs that will take the biggest hit. Small towns outside the suburbs will increase.
I suspect that commuting traffic will increase to eliminate this advantage. Already in major metros, long commutes suffer low speeds due to congestion during rush hour periods. Without a commensurately vast increase in infrastructure investment, I do not foresee a significant change in commute experiences from self-driving cars.
I predict that most people would not elect to live 2 hours away from offices despite being able to have access to entertainment and work while commuting.
The evidence is already here: various tech companies run shuttles to far-flung areas (Google has shuttle service from Stockton to Mountain View), yet employees aren’t moving to these lower-cost areas in large numbers.
Workers with families will have upper bounds to how long a commute they’ll endure. Their families are more important to them than being able to have entertainment, and meeting times limit the amount of time that can be used for work done while commuting. At that point, it’s approaching remote work, which is a promising idea, but isn’t a solution for long commutes by itself.
I see self-driving cars changing last-mile and replacing hub-and-spoke commutes as a replacement to taxi services and short-distance shuttles.
It'll work both ways, though. With ubiquitous driverless cars, offices may see less value in being in expensive urban centers and spread out.
Taken to its logical extreme: If people could teleport from one place to another instantly, there'd be almost no value at all to congested urban spaces. Similarly, if anyone can hail an affordable driverless Uber in seconds and reach their destination faster (due to improved routing / traffic flow and smaller cars) without having to think about parking, a bus schedule, or similar, the value in being physically close to other places decreases.
In that scenario, having your office out in the suburbs at a much lower cost becomes more reasonable. Transportation becoming more frictionless inherently makes longer distances more conceivable for travel (including commutes and office placement).
> Taken to its logical extreme: If people could teleport from one place to another instantly, there'd be almost no value at all to congested urban spaces.
So, like if we start being able to do our jobs in VR?
> I suspect that commuting traffic will increase to eliminate this advantage.
I think maybe in the short term, but in the long term I can imagine self driving traffic moving much faster than regular traffic. Cars all accelerating at the same time at lights, Uber pool in vans becoming super cheap. Roads could dynamically add and remove lanes in a direction without needing infrastructure, since all the cars will just "know" which lanes are available. Personal cars (hopefully rarer) can drive themselves home rather than take up parking space in cities.
The main advantage is the self-driving car could be an extension to your office. For instance if I have an 8 hour day with 4 hours of face-to-face meetings, then it doesn't particularly matter if the other 4 hours are spent commuting because I can work the whole time.
I don't think self-driving cars change the dynamics of traffic. Anything that makes driving faster attracts traffic until the advantage is lost. Often, it actually turns out to be worse due to second-order effects.
I've been taking an express bus into the city center from a rural location for a few years now. The time on the bus is between 35-50 minutes each way. Initially, I figured the same thing: I could get an extra hour of work done, work on side projects, etc.
The reality is that although the buses have WiFi, there are not many people working on them beyond the occasional email check. One major issue I found is that it's a lot harder to use a keyboard on something that's travelling on a road surface vs. a railroad. I even joked with someone about this last month as he was sitting next to me trying to write Javascript.
Most people on the bus are either playing video games or listening to music and I suspect that being that the people in this area are older and have families to get home to, having a more pleasant commute isn't remotely as important as having a shorter one would be.
A lot of people quite obviously love the suburbs. But the people who like cities want to live in the center. This means that as long as there exist some number of people who desire urban living, the prices there should continue to rise. What's being valued is the proximity to other people. And that supply is necessarily constrained.
Certainly some people live in city centers out of necessity. But the super-wealthy could live anywhere they want. They choose Nob Hill and SoHo (and so on). And they will continue to do so. Transportation options have very little to do with it.
Better transportation options for everyone else will be great! But the U.S. is an enormous place, so it's really only the city centers that should continue to see price pressures (because there's plenty of room everywhere else and better transportation options improve that situation).
I live close to work because I like sleeping late and this allows me to sleep as late as possible while also getting in at a reasonable hour. A driverless car isn’t going I solve that.
The 15 minute walk/subway combo I have does solve that
Not only driverless but electric cars as well. House prices near the highways will increase significantly because the air pollution will become non-issue
Hypothesis is many people live close to the cities because they hate commuting. But if commuting means work on a laptop or watch a movie, then the commute time is less significant. It's the near ring suburbs that will take the biggest hit. Small towns outside the suburbs will increase.