San Francisco One-Bedroom Rent Rises from $4000 to $6000 in Two Years

Yuchen Jin, co-founder of Hyperbolic Labs, stated that the one-bedroom apartment he rented in San Francisco for $4000 two years ago was relisted for $6000 after he moved out and was rented immediately. He also mentioned that a friend paid $5000 for a studio without a dishwasher and questioned how recent computer science graduates can afford such rents, attributing the situation to the AI economy.

This personal listing price is above the city median but aligns with rental platform trends. Zumper reported that the median rent for a one-bedroom in San Francisco reached a record $4400 in September, a year-on-year increase of 25.4%, only $180 less than New York's $4580. Two-bedroom rents increased by 26.8% over the past year, with the July median surpassing $6000. Another one-bedroom was listed at $5495. The national median rent for a one-bedroom only increased by 0.1% over the year to $1518.

Apartment List's August model provided another perspective. The median rent for a one-bedroom in San Francisco was $3881, a year-on-year increase of 25.6%, with a cumulative increase of over $1200 in two and a half years. In August alone, rents rose by 3.2%, and the vacancy rate dropped to 2%. Oakland saw a 15.1% increase during the same period, Mountain View about 11%, and San Jose 6.5%, indicating that the premium has spilled over from the city center. Jin had previously reported another personal figure, stating that a one-bedroom rented for $4200 was listed at $5800 at that time.

Zumper attributed the demand to hiring. Spokesperson Crystal Chen noted that the number of AI companies in San Francisco has increased from a few years ago to hundreds, hiring younger, more mobile individuals willing to pay a premium to be close to the industry. Office leasing demand saw a three-digit increase last quarter. Mayor Daniel Lurie declared a rental emergency in September and proposed a $30 million plan to delay evictions and protect existing tenants.

The supply has not kept pace. After the pandemic, the vacancy rate in popular neighborhoods reached 13%, but it has now dropped to about 3% in the waterfront and Pacific Heights areas. Non-tech tenants have no room to negotiate prices with agents, who report that there are people willing to pay top dollar. A two-bedroom in the church district was listed at $4700, with the tenant stating they are not in tech and wish to stay, but price discussions have not occurred. A report mentioned a couple with salaries of $180,000 and $185,000 who searched for three months for a place under $5000 without success.

Buyers are new AI companies and tech employees returning to the office, while sellers are apartments with a vacancy rate down to 2%. The driving force behind this situation is the impact of hiring, not a city-wide wage increase. Monthly rents jumped from $4000 to $6000 in individual cases, with the median increasing by about a quarter over the year, as funds flow from tech salaries and equity expectations into landlords' pockets. Those benefiting are properties that can be relisted immediately and cities outside the Bay Area, while those under pressure are tenants not in tech and recent graduates who have not yet realized their equity.

The citywide average rent in another statistic is about $3827, with a median home price of about $1.7 million. OpenAI and Anthropic have been reported to have valuations close to $1 trillion each, and if they go public, employee cash-outs will further enter the same housing market. The $30 million emergency plan addresses evictions, not new housing. The fact that properties are rented out on the same day they are listed indicates that the current constraint is the number of vacant units, not the number of people viewing them.

Source: Public Information