San Francisco rents spike 22% in a year, far outpacing other US cities – The Mercury News
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Wednesday, May 27th 2026<br>Today's e-Edition
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The Golden Gate Bridge and San Francisco skyline from the Marin Headlands above Sausalito (AP Photo/Eric Risberg, File)
By Bloomberg | wordpress@medianewsgroup.com | Bloomberg<br>PUBLISHED: May 27, 2026 at 5:49 AM PDT
Getting your Trinity Audio player ready...<br>By Francesca Maglione, Bloomberg
In San Francisco’s latest real estate boom, renters are paying cash up front, multimillion-dollar houses are selling auction-style and AI company stock can buy a sprawling hilltop estate.
It’s a reflection of the new wave of wealth from the artificial intelligence industry, leaving even well-paid newcomers scrambling for a place to live.
For Jenni Lee, a Chicago tech worker seeking to join her boyfriend in the Bay Area, finding an apartment has at times felt more difficult than getting a job. She has spent six months searching for a San Francisco rental, flying in for tours and repeatedly losing out on offers, even after the couple almost doubled their budget to $6,500 a month for a two-bedroom. In Illinois, her friends were living in desirable places for less than half that.
At one point she showed up to what she thought was a private appointment just to wait in line and later find out someone had already signed a lease. One $7,000-a-month home didn’t have a washer-dryer — though the touring agent assured her there was a laundromat down the street. Lee recently applied for a place she liked, only to get a text an hour later saying someone else was willing to pay a full year’s worth of rent upfront in cash.
“My Chicago brain couldn’t compute that,” she said.
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San Francisco’s new tech frenzy is reigniting home bidding wars and sending prices soaring in a city that just a few years ago was mired in post-pandemic malaise. With the AI industry paying hefty compensation to attract talent — and hometown startups OpenAI and Anthropic PBC commanding valuations approaching $1 trillion — the wealth effects are warping the entire residential market. And upcoming initial public offerings from the likes of SpaceX are set to unleash even more money into the market from early investors.
The city leads the US in annual rent growth, according to apartment-listing firm Zumper. Prices for two-bedrooms are now tied with New York for the most expensive in the country, with a median monthly rent of $5,500, the company said in a report this week. The median rent for a one-bedroom crossed $4,000 for the first time ever. Homebuyers also are facing soaring costs: The median price for a San Francisco house recently hit a record $2.15 million.
The surge is sharpening divides in a city defined by its extremes. San Francisco has long been mired in deep inequality, a place where a homeless encampment can be on the next block from houses owned by tech millionaires. Now, the real estate frenzy is colliding with broader wealth tensions across the state: Californians are facing a potential ballot measure to levy a tax on billionaires, while housing is a central issue in this year’s governor’s race.
And while the real estate market has been accelerating, the labor market tells a different story — suggesting the boom is concentrated among those benefiting from the AI fervor. While overall employment in the Bay Area is recovering after the pandemic, job creation has been modest. The San Francisco-Oakland-Fremont metropolitan area has added roughly 10,000 to 15,000 jobs over the past year, according to Bureau of Labor Statistics data.
“One of the big mysteries in San Francisco is how can you have such a hot housing market when you have such a cold labor market,” said Ted Egan, chief economist for the city and county of San Francisco. “If you have some people moving in and nobody moving out and you don’t have any new supply, that can create a spike.”
‘What Inventory?’
For sellers, the frenzy has translated into windfalls. When real estate agent Butch Haze listed a four-bedroom home in the Marina neighborhood in March, he figured it would fetch around $4 million, netting the owner a profit from the $3.4 million they paid two years...