AMECA, an AI robot, at the All In artificial intelligence conference in Montreal in September, 2023.Ryan Remiorz/The Canadian Press
Gus Carlson is a U.S.-based columnist for The Globe and Mail.
Aesop suggested it is possible to have too much of a good thing, and the migration of high-priced artificial intelligence talent to major North American cities hints that the Greek fable-spinner may have been right.
A study released last week by CBRE, the global commercial real estate firm, said the pool of technology workers with AI skills in North America grew by more than 50 per cent from mid-2024 to mid-2025, to 517,000 people.
That talent is concentrated in the San Francisco Bay area, New York, Seattle, Toronto and Washington. The top three accounted for 35 per cent of the total.
While New York added the most AI talent in absolute numbers – 20,000 people – Toronto and several other U.S. cities saw year-over-year growth of 75 per cent or more. Canadian cities hold three of CBRE’s top spots for all North American tech talent, not just AI – Toronto is ranked third, the Waterloo region seventh, and Vancouver 10th.
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This is all good news – to a point. While cities are clamouring to jump on the AI job-creation bandwagon and enjoy the upside, the report suggests there are already signs that the boom is exacerbating pressing urban problems, notably affordable housing.
On the plus side, the influx of AI brains – and the upskilling of existing techies to be AI-proficient – is creating high-paying jobs.
Quickly, the study says, the talent boom has fuelled demand for office space, which took a beating when the pandemic sent millions of office workers home to work. Even now, with more companies imposing in-office mandates, the office market could use the kind of boost AI is bringing.
“AI is predominantly in-office work, and they’re sort of back to the earlier days of tech innovation, where they’re in the office five, six days a week and for long hours,” said CBRE’s Colin Yasukochi. “That’s certainly boosted office space demand.”
The AI trend also has the potential to breathe new commercial life into depressed downtown business cores in cities such as San Francisco that have seen retailers and other services move out as crime, homelessness and public drug use have risen.
The report suggests that unlike Silicon Valley, where tech talent used to be concentrated, AI is reaching into cities where basic tech is retreating. Part of that reflects high demand for AI talent in the so-called FIRE sectors – financial services, insurance and real estate. That’s why financial centres such as New York and Toronto are so hot.
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But the growth is a two-edged sword. While every city wants an economic golden egg from the latest tech goose, this migration of talent also has a sizable negative effect on residential real estate.
The report suggests that the AI influx is a contributing factor to significant rises in apartment rents in the top AI tech markets – in some cases they have jumped by double-digit percentages. Apartment rents in Manhattan, for example, rose more than 14 per cent from 2021-2024, and in Washington more than 12 per cent.
When combined with widespread existing urban issues such as the lack of affordable housing that is driving up homelessness, crime and congestion, there is a price to pay for the AI boom.
While all major cities, including Toronto and Vancouver, are struggling with affordable housing and its knock-on effects, New York’s situation is particularly acute.
Homelessness is at its highest point since the Great Depression. The Coalition for the Homeless estimates that in July more than 350,000 people were homeless in the city.
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A recent city housing vacancy study shows that from 1996 to 2017, New York lost 1.1 million units of affordable housing, and there is now a vacancy rate of less than 1 per cent for affordable apartments.
The interconnection between affordable housing and homelessness – and the quest for a plausible solution – have become central issues in the upcoming New York mayoral race and serve as a cautionary tale for other metropolitan areas.
The AI boom has the potential to add fuel to that fire. New York has the country’s highest concentration of financial services companies, which are investing heavily in AI – including paying juicy compensation packages – to keep up with fintech rivals that have embraced the new technology.
As with any disruptive force, there is some short-term pain in the AI talent shift that ideally will lead to long-term gain. At this point, however, is it on the verge of becoming too much of a good thing? It all depends on where you sit.