As we observe the impact of COVID-19 on the residential, office, and retail sectors, there is a much longer-term factor that I am also observing. The impact of electric and/or autonomous vehicles on real estate.

First, electric vehicles. As the percentage of electric vehicles increases, there will inevitably be an impact on petroleum retailers. These gas stations are generally found in “prime” corner locations. If there is an economic impact on gas stations that causes a contraction of the number of locations, this will open up these locations to alternative developments. However, given the simultaneous decline of bricks and mortar retail, the users of these prime locations remain to be seen.

Second, autonomous vehicles. There are two potential impacts of autonomous vehicles that I want to highlight. As an initial matter, if one is able to “call” a car to pick you up when you are shopping or working, the need for close parking locations may decrease. This could have an impact on the requirement of zoning ordinances to provide on-site parking. If zoning ordinance requirements change, the impact on land use could be substantial. Second, if the shift to autonomous vehicles leads consumers away from vehicle ownership, and towards “on-demand” vehicles, this could have significant impacts both in our infrastructure needs and, in Detroit specifically, in the economy. If vehicles are rented on demand rather than owned by individuals, the sales volume could substantially decrease, as consumers could make more efficient use of available vehicles. Imagine if your car, parked in your office parking lot, was instead able to be used throughout the day by others.  If sales volumes decrease, the economy in Michigan could be detrimentally impacted.

Again, these are all long term issues. But a smart investor, owner, or consumer, will monitor the trends.