(KGTV) - California's struggle to provide affordable housing is likely to continue in 2018, but the challenge could also strike at the heart of the state's tech community.
In an interview with CNBC's Power Lunch, Redfin CEO Glenn Kelman predicted ever-climbing housing costs in coastal cities will drive companies and talent to smaller cities and elsewhere in the U.S.
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"Silicon Valley is going to leave Silicon Valley," Kelman said. "That’s already happening. Google employs more engineers outside of Silicon Valley than it does in Silicon Valley and if Google can’t afford Silicon Valley then no one can."
"The technology companies, the Wall Street companies, they're chasing the talent, [and] the talent is chasing affordable housing," he added.
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Kelman told Power Lunch he believes the new GOP-backed tax bill signed into law this month will hit expensive housing markets that hardest and accelerate the migration. The law decreases the allowable deduction on mortgage debt interest for new homeowners from $1 million to $750,000.
The head of the online real estate brokerage company said cities like Denver, Portland, and Houston were primed to be the next talent hubs. Commuter cities will also be in demand for homeowners and renters.
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"It used to be that in California we owned the future. We felt like everything was happening here first," Kelman said. "And now you see that swagger, that confidence in the center of the country. People in Detroit, people in Texas think they own the future."
To see Kelman's full interview, click here.
