Self-driving cars are coming, but developers aren’t reducing parking yet, survey finds

A Lincoln MKZ outfitted with self-driving sensors. Despite the inevitability of autonomous cars, developers are still not reducing parking spots in the projects they build, a recent survey has found.
(Ryan Nakashima / Associated Press)

Self-driving cars may be inevitable, but few office developers want to spend money preparing for the changes they will bring.

That’s the conclusion of a recent survey of real estate professionals, despite the expectation that ride sharing and autonomous vehicles will drive down the need for parking in the decades ahead.

Most office developers are still reluctant to foot the extra cost of building garages that can be converted to other uses or even build smaller garages, said Andrea Cross, head of office property research in the Americas for real estate brokerage CBRE, which conducted the survey.


“Tenant demand for office parking is going to continue to stay strong for the next five years, despite all the talk of worker mobility from ride sharing, autonomous vehicles and other on-demand transit options,” she said.

Growing reliance on public transportation in some urban centers has led developers to cut back on the amount of parking they create, but in auto-centric markets such as Southern California there has been little reduction in the ratio of parking places to employees because the vast number of workers still drive to their jobs.

Self-driving cars are expected to someday drop off workers and depart or park themselves in tighter quarters than human drivers can, thereby reducing the demand for garage space.

A few landlords are looking a decade or so ahead to that future and building parking structures that can eventually be put to other uses. Such garages often have flat floors instead of slanted ones and higher ceilings like those found in office buildings. Ramps may be placed on the outside of the structures so they can be removed later.

Some developers spend extra to put part of a garage underground so that the top floors can eventually be removed and an alternate use created over the subterranean levels, as landlord Trammell Crow did in 2015 at an office tower in Bellevue, Wash.


However, the cost of convertible garages is about 17% higher than that of traditional parking structures, CBRE said, which is off-putting to developers in part because they expect to sell their buildings before parking needs decline.

Until real estate investors start demanding convertible garages, developers are unlikely to build them, the survey found.

“The short-term payoff just isn’t there,” said Spencer Levy, CBRE’s head of research for the Americas.

Owners of hotels and shopping centers, which don’t serve job commuters, are likely to reduce parking before office owners do, he said.

Apartment landlord AvalonBay Communities Inc. will put a convertible garage in a residential complex it plans to start building in the Arts District in Los Angeles in 2019, according to Mark Janda, vice president of development.

Portions of the two levels of underground parking could be converted to a gym, a theater and perhaps other recreational uses someday, he said last year, and the first floor could be reconfigured to plug in more shops and restaurants.


“We are designing it so in the future, if demand for parking decreases dramatically, we have the flexibility to go back to the city and ask for additional entitlements to change uses from parking to whatever,” Janda said.

Twitter: @rogervincent