Is AI + Housing Unaffordability Leading Us Toward a Tent-Camp Future?

Question

Hey everyone,
A friend recently made a comment that really stuck with me — they said tent camps in California might become the norm in the future because of how unaffordable housing is getting.

With AI advancing so fast, I'm starting to seriously wonder:

• Will large portions of the workforce be pushed out of stable jobs?
• If people can’t keep up economically, what happens to housing demand, affordability, and the rental market?
• Could we realistically be heading toward a future where tent cities or informal housing become more common, especially in high-cost states?

Will large portions of the workforce be pushed out of stable jobs?

If people can’t keep up economically, what happens to housing demand, affordability, and the rental market?

Could we realistically be heading toward a future where tent cities or informal housing become more common, especially in high-cost states?

As investors and folks in real estate, how do you see this playing out?Are you preparing for major shifts in tenant profiles, housing types, or market dynamics?

Appreciate any insights!

Drew Sygit · Answer

Those that do not advance their skills will always have "affordability" issues.

As long as there have been cities, there have been slums.

What is REALLY different this time around other than social media giving it more exposure?

Greg Scott · Answer

I disagree with the premises of this post.

The problem in California is primarily due to growing population and lack of supply created by NIMBY activists and mountains that make further development difficult.  In contrast Austin, TX has seen a huge surge in construction and prices and rents are coming down.

AI is just a red herring.  Every technological leap forward people said it would destroy the economy.  While it is true that not many people make buggy whips any more, the automobile ended up creating numerous other jobs.

Bruce Woodruff · Answer

The OP makes the same mistake as many when 'affordable housing' is mentioned. People will always have the choice to vote with their feet and MOVE.

Let's say you become unemployed because of AI (which I largely doubt anyway) and you have two choices - live in a tent, or move somewhere that has either 1) available housing or 2) a new job. Guess what 99% of people will do? Yep they will move on down the road.....

Like @Greg Scott said, every advancement creates new opportunities. And I personally doubt that AI has a huge impact anyway.

Chris Seveney · Answer

Well this post was written with AI which is easy to tell - so it still has a long way to go.

Are we headed to tent cities - not in my lifetime. Are we headed to a much greater separation of haves and have nots - absolutely.

Mohammed Rahman · Answer

That’s a heavy but really important question—and honestly, a lot of people in real estate are starting to think about this too.

With AI and automation ramping up, there’s a real possibility that large chunks of the workforce—especially in admin, retail, and transportation—could be pushed out or see their wages shrink. That’s going to hit housing hard, especially in places like California where affordability is already a crisis. If incomes can’t keep pace with rising housing costs, demand for traditional rentals might shift toward more affordable, alternative, or even informal housing options. You might see more co-living spaces, shared housing, ADUs, and yes—more encampments or informal structures in urban areas. We’re already seeing signs of that.

As investors, it’s a good time to start thinking beyond just luxury flips or high-end rentals. There’s going to be growing demand for affordable, workforce, and transitional housing. Some are even pivoting to build-to-rent models with lower price points or investing in states that are more housing-friendly and less regulated. Others are looking at Section 8 and other government-backed housing options where demand is strong and rent is more stable.

Tenant profiles might also shift. You could see more gig workers, multi-generational households, or people looking for flexible leases. So screening, leasing, and property management might all need to adapt.

Long story short—if income inequality keeps growing, the housing market won’t collapse, but it will change. The question is whether we as investors are ready to meet the new needs, or if we’ll get left behind chasing yesterday’s playbook.

Is AI + Housing Unaffordability Leading Us Toward a Tent-Camp Future?

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