Tyler Cowen: AI boom reshapes real estate winners and losers
In this analysis, economist Tyler Cowen highlights the under-appreciated impact of artificial intelligence (AI) on real estate dynamics. As AI becomes integral to business and daily life, cities with robust AI ecosystems are poised to experience a surge in real estate value, driven by the demand for proximity to AI research hubs and industry leaders. The efficiency of AI, leading to smaller companies and reduced office space needs, is expected to further reshape commercial real estate. Cowen predicts a real estate resurgence in tech-centric areas like San Francisco and Manhattan, while cities without a foothold in the AI boom may face diminishing property values. Anticipating a rise in demand for residential properties from high-earning AI professionals, Cowen identifies geographical preferences based on amenities, climate, schools, and infrastructure. The analysis also foresees winners and losers in the reallocation of resources, with cities like northern Virginia and Atlanta emerging as potential beneficiaries, while colder cities with existing governance and crime issues may face challenges. Overall, Cowen underscores the transformative influence of AI on real estate decisions and emphasises the need for foresight and adaptability in navigating these changes.
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Struggling Cities Face More Pain From AI Boom: Tyler Cowen
By Tyler Cowen
Artificial intelligence is likely to transform our world in many ways, but one that hasn't received much attention is the technology's looming impact on real estate. As AI becomes an essential component of both business and daily life, the value of places where those who work on AI want to live will rise, provided these locales have reasonable infrastructure. At the same time, the value of lower-tier cities left out of the AI boom will diminish.
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