Housing and transportation are usually the top two expenditures that an adult makes. A house is the most expensive thing that most Americans will ever buy, and a car or other personal vehicle usually takes the #2 spot. However, the Transportation-As-A-Service movement (TaaS) is starting to change the latter. Especially in urban settings, options like rentable electric scooters, ride-sharing, and traditional public transit make it unnecessary and impractical for someone to buy a car. Now, what difference does this change make for real estate players?
Can Real Estate (As a Service) Make the Same Transition?
If someone can use Uber or Lyft instead of buying a car, can we expect real estate to make the same sort of transition? Unlike a car, in which people might spend an hour or two inside per day, a home is a place in which most people need to store many things and stay in for at least 8-10 hours per day. So, it is unlikely that a model like Airbnb can completely replace modern homeownership.
However, TaaS could make a difference in real estate in another way. As transportation services become more available and more reliable in a single geographical area, it becomes easier for area consumers to use these services exclusively (no car needed). By understanding occupants’ transit actions, real estate owners can make decisions in a smarter way. Instead of building a parking lot, for example, it might be more practical to create access to the curb for rideshare cars.
TaaS and Real Estate Prices
As the years go on, TaaS will become more ubiquitous. Once transportation networks improve and spread out, people will physically be able to live much further away from city centers. If so, real estate investors may want to look for locations with easy transit access that will be attractive to tenants.
Besides TaaS, there are many other movements impacting the real estate industry. Transaction process automation, which is led by companies like Propy, is one of them. Propy’s smart contracts eliminate the need for manual paperwork labor, cutting costs and reducing the time needed for a real estate transaction. These new efficiencies, along with forces like TaaS, can dynamically change the industry as we know it.