AI boom in Silicon Valley is going to worsen the housing problem, says CEO of billionaire-backed ... - 3 minutes read

The leader behind the grand plans to build a new city in Northern California believes his project will address the state's ongoing housing crisis — a matter he says will only get worse with the recent demand for artificial intelligence.

Jan Sramek, CEO of California Forever, which is a company backed by Silicon Valley's wealthiest, made his case for the new Solano County city during an episode of the podcast "On With Kara Swisher" on Tuesday.

Sramek said in the interview that his vision for the city, which would be about 60 miles away from San Francisco, is simple: to build a more walkable, dense city that is also affordable.

Previously published information from California Forever revealed that the city will be about 18,600 acres with a capacity to welcome 400,000 residents.

Sramek said on the podcast that the city could have homes or apartments starting at $400,000. The average home value in Solano County is about $590,000, according to Zillow.

The ex-Goldman Sachs trader-turned-City Founder said he has no interest in building a smart city or a libertarian utopia, but instead wants to address a persistent problem in the Golden State that is quality, affordable housing.

More than 800,00 people left California between 2021 and 2022, according to Census Bureau data. The high cost of living was one factor former California residents cited to Business Insider last year for their exodus.

A 49-unit apartment complex that is taking 17 years to build has become one recent example of the housing issue in the state.

"These walkable communities today — working families can't afford them," Sramek said.

The CEO later added that the housing problem will only get worse with the advancement of artificial intelligence, arguing that this problem makes his project more necessary.

"If the AI boom continues and the salaries continue in the Bay Area — that's going to just increase the pressure on the housing market," he said. "And it's going to be harder and harder and harder for working families to stay in San Francisco or in Palo Alto."

Sramek didn't elaborate on what role artificial intelligence will play in the housing crisis. A California Forever spokesperson didn't address the question in an emailed response to Business Insider.

One investigation by The Lever revealed that landlords could use AI to screen potential tenants, potentially opening the door for discrimination against people even with minor convictions such as littering.

But Sramek appeared to be suggesting that AI will have an impact on wages — higher salaries to attract top talent, for example — and, as a result, on people's ability to afford housing.

A blog from the International Monetary Fund stated that AI could result create a split between workers who can take advantage of AI and those who cannot.

"We may see polarization within income brackets, with workers who can harness AI seeing an increase in their productivity and wages—and those who cannot, falling behind," the IMF forum said. "Research shows that AI can help less experienced workers enhance their productivity more quickly. Younger workers may find it easier to exploit opportunities, while older workers could struggle to adapt."

Source: Business Insider

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