How Uber, self-driving cars, and more are changing real estate

A little more than 10 years ago, Lower Merion and a small group of municipalities across the Philadelphia region jumped headfirst into a nationwide sensation.

Cities and towns across the U.S. were excitedly clamoring to be the next to build a "transit-oriented development" — a rapidly popularized mixed-use concept that combined dense housing, retail space, offices, and more within a walkable community steps from major transit lines.

It was an era when the suburbs ruled, when sprawl was prevalent, and when communities such as Lower Merion wanted to be among the first to claim they had dampened automobile use and reduced their carbon footprint. To provide incentives for new, forward-thinking development, such towns were readily giving builders approval for denser projects.

For years, it worked. Defunct train stations received million-dollar makeovers. Builders boosted development in places that were long untraveled. In some neighborhoods, the presence of cars decreased and use of public transit spiked. But no one could have predicted all that progress would be so quickly overshadowed.

These days, developers, architects, and city planners are turning their attention away from transit-oriented communities and toward the new era of transportation: car-sharing, ride-sharing, driverless cars, and more. And while transit-oriented development certainly remains an interest, many developers have instead turned their attention to the humble parking garage, the surface lot, the region's bike trails and roadways to determine how they can build and re-adapt decades-old structures to become part of the developments of the future.

The idea has gripped the attention of thousands at development conferences, has galvanized city planners, and already is trickling into new architectural designs and amenity packages offered in housing developments across the region.

But where there have been exciting new amenities and development features, there has also been concern. Though new transportation can transform cities, towns, and housing developments — and the ways we inhabit them — academics and planners have also begun preaching the need for careful city planning to increase safety and access, and to reduce regional sprawl.

The transit changes "do start to point to a future that could look really different than today, and there is a lot of uncertainty in that," said Brett Fusco, assistant manager of long-range planning for the Delaware Valley Regional Planning Commission. "The important thing to think through is: What can we do to actively shape these [transportation] technologies and have them move us toward the future that we collectively want, rather than just accepting what they might bring?"

Adjustments being made to accommodate transportation changes have been large and small. In 2016, for example, Boston announced a program that would test driverless cars on city streets. Last year, Summit, N.J., 30 miles outside Manhattan, launched the state's first subsidized commuter program, in which the city offered to pay for 100 residents' Uber rides for six months to help alleviate its commuter parking problem. The way Summit saw it, it was cheaper than developing additional parking.

In Philadelphia, the adaptation to new transportation technology has been slower in comparison. Last year, Uber and SEPTA announced a partnership offering discounted rides to and from 11 Regional Rail stations. But citywide, a spokesman for the Philadelphia City Planning Commission said, the city was "aware of these trends in transportation but has not yet done any analysis in this area."

That's where developers have stepped in.

At the 2.7 million-square-foot FMC Tower in University City, developer Brandywine Realty Trust opened the city's first elevated park two years ago — placing it 90 feet off the ground atop a parking garage. Offering supreme views of Philadelphia's skyline, a bar, and live entertainment, the one-acre park serves a dual purpose, providing green space while still supplying parking for those who use the tower.

In discussing the future of transportation and development, perhaps no building has received more attention than the modest parking garage. And it makes sense: As the way we drive our cars continues to adapt, the way we park them will need to, as well.

In theory, transportation planners believe the more that car-sharing services such as Zipcar and ride-sharing services such as Uber and Lyft exist, the less people will rely on private vehicle ownership. According to consulting agency McKinsey & Co., it is estimated that, by 2035, the need for parking will decline by more than 5.7 billion square meters nationwide.

Yet even more, observers believe, electric cars, driverless cars, and technology that allows vehicles to park themselves could enable parking spaces to be more compact, reducing the need for large, hulking garages or surface lots. Given that uncertainty, planners increasingly have been pushing developers to build parking garages and surface lots in ways that could allow them to be readily re-adapted.

"I don't think we are that far away from that, and I think it's brilliant," said Tom Scannapieco, developer of the ultra-luxury 500 Walnut condos. "No one knows what the impact of the driverless car is going to be on cities. … But if you built a garage with a tight radius ramp … with floors that are level instead of at an angle, that could be a garage that could be converted to an office or residential use."

That potential has caught the imagination of such tech giants as Amazon. At an Urban Land Institute event in Seattle, the company's real estate director raised the possibility of using parking garages as fulfillment centers. And in Manhattan, a former Hertz rental-car garage was converted into an ultra-luxury eight-unit development, with prices as high as $28.5 million a unit.

Scannapieco's 500 Walnut building is set to debut his second automated, underground parking system in Philadelphia. His first, constructed at 1706 Rittenhouse, has the ability to automatically park vehicles — with no valet or human intervention — after residents exit the car on a platform and simply swipe a fob. His 500 Walnut system, built by German maker Westfalia, allows for the same capability, plus the ability to wirelessly charge as many as 42 electric vehicles.

By automatically relocating vehicles, Scannapieco said, his garage can efficiently stack multiple rows of cars compactly and quickly, decreasing the total area needed. And by building the lot in a vault underground, the ground floor of the street "can be more animated," he said.

Developers who aren't pursuing alternative parking scenarios aren't necessarily sitting idly by. With land prices in urban areas remaining high, and little land left to develop in many cities, some property developers in Los Angeles, San Francisco, and North Jersey have been replacing on-site parking spaces with Uber subsidies, offering monthly and onetime credits to residents in place of on-site parking.

No partnerships that robust currently exist in the Philadelphia region. Still, many developers are finding creative ways to keep residents out of cars.

Bozzuto Group's Canvas Valley Forge, a 55 and older community, is working toward offering residents the ability to reserve Riide Electric Bikes — which can be ridden as electric or manual bicycles — to use for alternative commuting. And the Station at Manayunk, a community developed by J.G. Petrucci Co. Inc., has both a bike-share program and Zipcar on site for residents' use.

"We certainly believe that, as time goes by, the trend is less and smaller car ownership," said Tom Geyer, vice president of brand management at Bozzuto. "Developers are starting to think about what the contingency plan is for their parking. … How can we recreate what we've constructed? We're thinking about that in a lot of our communities."