Brandon Donnelly — Daily insights for city builders. Published since 2013 by Toronto-based real estate developer Brandon Donnelly. — Page 1028

About a year ago, Portland enacted “Inclusionary Housing” policy requiring new apartment buildings of 20 units or more to offer up a portion of the units at below market rents.

Developers are able to select from a few different options and the rents are calculated according to a percentage of the city’s median family income (30-80%). I’m not sure how this policy would apply to new condo buildings.

This is an interesting account by The Portland Mercury of what this policy may be doing to the housing market. I say may because it’s only been a year and there could be other factors at play.

Between 2013 and 2017, Portland typically built between 3,000 and 6,000 new units per year. Since the IH policy went into effect on February 1, 2017, 682 new units have applied for permit. 

About half are coming from one developer who appears to be building the requisite affordable units in exchange for no parking minimums. They are now proposing buildings with zero parking.

Again, in all fairness, it’s only been a year. But already Mayor Ted Wheeler is looking at other incentives to encourage more new construction in the central city. The biggest levers: height and density.

All of this begins to speak to the very real impact of inclusionary zoning on development feasibility .

Photo by Zach Savinar on Unsplash

I am not convinced that autonomous vehicles will make “location” irrelevant. 

But I do agree with the following line from this recent Bloomberg article  called,  A Driverless Future Threatens the Laws of Real Estate .

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

So this remark by David Silver could very well be correct:

“Real estate might be the industry that is most transformed by autonomous vehicles.”

Technological advances in mobility have historically brought about decentralization because each advance – from streetcars to the automobile – made it reasonable to travel further distances.

Of course, autonomous vehicles are also expected to free up our time and focus while in transit – although trains do that for us today albeit with that pesky last mile problem.

But just like the internet in the late 90′s didn’t make location irrelevant (the opposite appears to have happened), I am similarly unconvinced when it comes to autonomous vehicles. What we consider a desirable location may simply shift.

So this is not to say that the won’t see profound change in our cities. We will. Which is why we’re all trying to get ahead of it.

Below is a presentation by Frank Chen – head of research, deal, and investing at the venture firm  Andreessen Horowitz – which makes the case for self-driving electric car fleets.

He starts the presentation by talking about why he thinks this shift is going to happen faster than most people think. 

One reason for this is that the batteries are becoming dramatically cheaper and the battery makes up a large part of the cost. By 2025, it is expected that electric vehicles will become cost neutral with ICE (internal combustion engine) vehicles assuming zero government subsidies.

And by 2038, Bloomberg believes we will hit peak ICE vehicle sales. That is, electric vehicle and ICE vehicle sales globally will hit 50/50. Norway has already hit this threshold but they impose heavy financial penalties on ICE vehicles.

2025 is not that far away.

If you can’t see the presentation below, click here .

[youtube https://www.youtube.com/watch?v=of5j-Lztqrg?rel=0&w=560&h=315]