BIGGEST IMPACT OF DRIVERLESS FUTURE: LAND

The time-tested law of “location, location, location” may soon break

The time-tested real estate law of “location, location, location” will likely not matter as urban areas embrace autonomous transport.

The link between property and transport has been perhaps the most durable in human history.

Since the ancients, few things have delivered higher land values with more certainty than advances in transport, from roads to canals, railways to highways.

It’s still “a no-brainer” in the 21st century, says Bridget Buxton, who in 2016 bought a fixer-upper in a scruffy part of east London because it’s a short walk to the high-speed crosstown rail line due to open this year. Prices are up 90 percent in the past five years for homes like hers, far outpacing the whole city.

Now the dawn of the driverless car — promising a utopia of stressfree commutes, urban playgrounds and the end of parking hassles — threatens to complicate the calculus for anyone buying property.

“Real estate might be the industry that is most transformed by autonomous vehicles,” said David Silver, who teaches self-driving engineering at Udacity, an online university that has enrolled more than 10,000 students who want in on the transport of the future. “It could change real estate from a business that is all about location, location, location.”

It may take a while: The earliest examples of driverless services — buses, taxis and delivery vans — already have arrived, but widespread consumer adoption might not be here for a decade. And almost half a century passed from Henry Ford’s 1908 Model T, the first car for the masses, before suburbs designed for drivers took hold. And that’s why investors like Ric Clark, chairman of Brookfield Property Partners LP, the world’s largest real estate investment company, admit they’re involved in little more than guesswork.

They’re just starting to think about what to do with all the space that could be freed up in a world where cars no longer sit idle for an estimated 95 percent of the time, whether unloved areas without mass transit might soon become more attractive, whether out-of-the-way greenfield sites will become valuable locations for warehouses.

Among Brookfield’s $152 billion in real-estate assets are about 175 malls in the U.S. where “the biggest physical acreage is surface parking lots or structured parking,” Clark said. “For years we have seen this stuff and thought we would love to build apartments or maybe if there is a higher and better use we could build on it.”

In New York City, parking covers an area equivalent to two Central Parks, according to estimates published by Moovel Lab, a Stuttgart-based research unit of Daimler; London would gain space equal to almost five Hyde Parks without its car-parking spaces.

Then again, the disruption offers blessed relief to the working world’s most harried people — commuters — foretelling a new era of sprawl by encouraging development of outlying areas.

David Williams, technical director at insurer Axa SA, travels more than three hours a day between the northern suburb of Bury St. Edmunds and his work in London. He looks forward to a time when his trip no longer consists of a drive through traffic to the station and a train that’s often delayed.

“Imagine if my entire journey was much more flexible, much more integrated — no waiting round on cold platforms and I could be doing something else from A to B?,” says the 56-year-old father of two. “Would that mean the city effect of increasing house prices spreads further out?”

Google parent Alphabet has imagined such a world in an autonomous-only future.

Sidewalks Labs, Alphabet’s urban-development unit, is designing a district in Toronto’s eastern waterfront that could be among the first fully driverless neighborhoods.

“The fundamental design and experience of the urban street can be transformed,” said Rohit Aggarwala, the outfit’s chief policy officer.