The advances of labor and vehicle automation technology are upon us, and as these technologies mature, they will transform our lives at work, at home, and in between. If the public and private sectors properly prepare for these changes, automation will benefit the U.S. economy. Similarly, these benefits are also expected to extend to the apartment market.
America’s Labor Force Will Change Significantly
Over the next 10 years, more than 3 million robots and automated machines could emerge in the U.S. manufacturing sector. Many of these machines will fill positions occupied by lower-skilled workers with repetitious jobs. As artificial intelligence gains prominence, even some white-collar jobs could be replaced, much as large office staffs in the last half of the 20th century were trimmed with the advent of automated office machines and computers.
Autonomous vehicles are likely to change our economy and society even more than automation in the workplace. To date, vehicle manufacturers and technology companies worldwide have invested more than $6 billion into autonomous vehicle technology research and development. While several vehicle manufacturers are promising near- or full-automation of their automotive products by 2025, many industry experts believe widespread vehicle automation will not take place until at least 2030 because of the complexities of implementation, legalities, and regulations. Once the technology is commonplace, low-paid transportation workers will be most affected by driverless vehicles.
Joint wide-scale public- and private-sector initiatives will be needed to educate and train laid-off workers for new jobs requiring more technical skill, smoothing our economy’s transition to greater reliance on technology. Failure to adapt displaced workers could result in lengthy unemployment, possibly resulting in reduced (or negative) household formation, adversely affecting the apartment market. Conversely, success in transitioning affected workers will result in greater employment and wages, encouraging increased household formation, spurring gains in apartment occupancy and rent.
Opportunities from vehicle automation will emerge in the need for cybersecurity experts, programmers, and electronic and mechanical maintenance teams for large fleets of automated cars. For ride-share companies, specialists using artificial intelligence will be employed to manage fleet logistics. Many of these workers will have the means to rent high-end apartments.
Autonomous Vehicles Will Change Living and Commuting Patterns in Our Cities
Automated vehicles are expected to generate an increase in demand for ride-share services, and for some households, this will result in fewer cars owned. Consequently, household costs associated with car payments, insurance, repairs, and upkeep will go down, in effect increasing discretionary income. This will enable some apartment renters to move to larger or nicer apartments.
Automated ride-share vehicles for commutes and errands to urban cores will eliminate the cost and hassle of parking in dense areas. This trend may shift some apartment demand from inner cities to suburbs and exurbs, since the convenience of living in the urban core may become less essential to some renters.
Some urban-core apartment dwellers may give up their vehicle in favor of ride-share services, thereby eliminating the expense and drudgery of finding parking in congested neighborhoods. Here again, the extra discretionary income will present some renters a path to upgrade to higher-end apartment communities.
Apartment Owners and Operators Need to Plan for the Future
The need for large parking fields at apartment communities will diminish as households own fewer vehicles. For new developments, some of the space normally considered for parking may be used instead for more apartment units or additional amenities, or a combination of both. For existing apartment communities, parking areas no longer needed could be similarly repurposed.
Some parking garages could also be repurposed into apartments. Already some developers are building parking garages with utilities design and higher clearance—for generous apartment ceiling height—with this eventual purpose in mind.
Apartment operators could partner with ride-share companies to include their ride services in a lease package, or even use ride-share services as a concession, if needed.
Shorter commutes are a likely byproduct of vehicle automation, resulting in more free time for some renters. Apartment communities could capitalize on this trend by offering more amenities, making the community more attractive in a competitive market.
While many of these changes are not expected for at least several years, those in the apartment industry need to anticipate them. Doing so will position owners and operators to reap the advantages of their residences’ increased income and quality of life generated by greater automation at work and play.
– Robert W. Dickinson