The New York Times recently argued that self-driving cars can’t cure traffic, but that economics can. Here is the key soundbite:

“Maybe autonomous cars will be different from other capacity expansions,” Mr. Turner said. “But of the things we have observed so far, the only thing that really drives down travel times is pricing.”

The argument here is that capacity expansions – such as additional lanes – never solve the problem of gridlock. Yes lane widening projects increase capacity, but the latent demand is so strong that the problem never gets solved. Even in places like Houston.

We talked a lot about this phenomenon on the blog a few years ago when Toronto was embroiled in debate over the Gardiner Expressway East. But it’s interesting to think about self-driving cars as simply another incremental capacity expansion.

I have no doubt that this technology will make more efficient use of our roads. Carpooling will be a lot easier – as is already the case. Cars will be able to drive closer together. We’ll be able to stop abrupt breaking and swift land changes, which actually create systemic traffic problems for everybody else.  And the list goes on.

But there will still be limits to how many people can be efficiently moved on a particular strip of road. Exactly how there are limits to how many people can be efficiently moved via a particular subway tunnel, streetcar line, and so on.

So if latent demand continues to outstrip available capacity, which has historically been the case, then we are once again back to the politically unpopular idea of pricing away congestion. As much as people criticize it as regressive, I believe that’s where we’re headed.

I was reading True tales from the real estate wars of 2012 (Toronto Life) this morning and reminded me that, first, Toronto real estate remains a topic everyone seems to love to talk about and, second, that most real estate startups are focused on the supply side of real estate. 

One thing I always find when I tell people I work in real estate is that they automatically assume I’m in sales. Sales are only one part of the real estate business — albeit an important one — but still only one part. As a result of this automatic association, I find that real estate startups tend to centre themselves around creating better listing platforms.

Another way of thinking about this is that they’re focused on the supply side of real estate. When real estate comes up for sale, available supply is increased. How do I then improve the way these listings are delivered to the marketplace?

But what about the demand side? If you read through Tale #1 from the real estate wars article, you’ll see that Matthew Slutsky and Carlie Brand ended up canvassing a St Clair West neighbourhood in order to find a private sale (after losing a few bidding wars). A smart and proactive move, for sure. 

However, why is there no easier way to do this? We’ve all been so focused trying to improve listing delivery that we’re forgetting that there are owners out there who are willing to sell given the right opportunity. 

This is one of my primary goals with Dirt. I want people to engage with real estate all the time — not just when they’re looking to buy/sell — and I want to shift the focus to the demand side of real estate: what neighbourhoods do people like, what houses do they like, what’s happening with this property, etc.

I’m reminded of a piece I recently read by Matthew May called Observe First, Design Second: Taming the Traps of Traditional Thinking. Often we can be so quick to jump to final solutions that we forget to take a step back and contemplate whether or not we’re even headed in the right direction.

If you like building mobile apps and are interested in real estate, I’d love to hear from you. Feel free reach out at @donnelly_b.