When searching for an condominium in San Francisco at this time, artificial intelligence can appear inescapable; and that’s not simply because each rental constructing appears to have an AI bot answering calls.
In San Francisco, the know-how’s ascendency—and the next skyrocketing job progress— has helped make the condominium market one of many tightest within the nation, with the fastest growing rent in the U.S.
Lisa McCarrel, Managing Companion of Move Bay Area, a relocation and rental housing service, has seen the rental market grow to be frenzied in latest months due partially to the rise in AI and AI-adjacent jobs. With items more durable to come back by, she’s seen some potential tenants provide a 12 months’s lease in money upfront.
“I simply had a gathering with my crew as a result of spring time is often when the rental market right here begins to get loopy,” says McCarrel. “Nevertheless it’s already loopy. I’ve been operating this enterprise for 11 years, and that is the primary time I’ve needed to maintain a gathering to organize employees for what might be a hyper-competitive market.”
Between 2024 and 2025, job postings for AI roles within the Bay Space, many extraordinarily high-paying, grew 72%, from roughly 57,000 to 99,000, in keeping with an analysis by the Bay Space Council Financial Institute. That inflow of recent, extremely paid employees—who could also be renting till a post-IPO windfall—has helped rents within the metropolis of San Francisco leap 13% year-over-year, in keeping with information from Condo Checklist.
The market at present has a 3.5% emptiness fee, roughly half the nationwide common (almost even with the city’s pre-Covid 2019 vacancy rate of 3.4%). Jackie Tom, founder and dealer of the company Leases in SF, stated the market is now very busy and nicely previous pre-pandemic pricing.
A unique sort of tech increase
However not all tech booms are created equal. AI’s outsized influence on San Francisco differs at this time considerably from the influence of the 2010s tech growth, when it felt like tech hiring had a wider influence on different financial sectors. Partly, that’s due to each the place AI companies are situated and their workforce cultures, in addition to the general state of the financial system. That very same job posting evaluation discovered non-AI jobs within the area declined 1% over the identical interval.
“Ten years in the past, you had tech employees flocking to San Francisco, however a variety of them moved to the South Bay or the Peninsula, or lived throughout town and took buses to Menlo Park, Mountain View or Cupertino,” says Condo Checklist economist Chris Salviati, referencing the Silicon Valley HQs of Meta, Alphabet, and Apple, respectively. “Proper now, the neighborhoods the place AI corporations are based mostly are seeing an inflow of condominium demand.”
San Francisco neighborhoods similar to SoMa, the place Anthropic not too long ago took over a 430,000 square-foot workplace, and Mission Bay, the place OpenAI expanded its workplace footprint to embody greater than 1 million sq. ft, have seen skyrocketing demand for rental items, says Salviati. RentCafe data exhibits one-bedroom items in these neighborhoods at $4,700 and $3,800. Anna Squires Levine, president of coworking agency Industrious, stated demand for his or her San Francisco areas has been “off the charts” because of AI.
AI companies have embraced “9-9-6” tradition, an idea pushing employees to grind from 9 a.m. to 9 p.m. six days per week. With that sort of schedule, and places of work and startups clustered in a handful of neighborhoods, the brand new AI workforce needs to stay as shut as attainable, ideally strolling distance, to remove lengthy commutes. One agency, Cluey, even gives its employees rental subsidies.
That’s a sea change from the 2010s increase that reshaped San Francisco, the place many employees both lived within the metropolis, in addition to Oakland, and commuted to Silicon Valley places of work. In reality, whereas Oakland was seen as a battleground towards gentrification over the past tech wave a decade in the past, coping with dramatic lease will increase, at this time, its condominium market has flatlined, as a scarcity of demand and a surplus of recent condominium provide has pushed rents down 20% in comparison with 2020.
AI’s progress, by way of its workplace leasing footprint, stays ravenous, says Colin Yasukochi, government director of the Tech Insights Heart at CBRE, a large worldwide actual property brokerage and providers agency. Final 12 months, almost a 3rd of the ten.5 million sq. ft of workplace leases have been for AI corporations. Yasukochi says that in the event you add up all the full area necessities for AI companies searching for new places of work proper now, it could complete 3.3 million sq. ft.
McCarrel of Transfer Bay Space says she’s seeing business progress transfer in phases; final 12 months, she was serving to AI startup founders discover locations to stay, and now she’s working with extra of the workers they’re beginning to rent.
For AI companies, says Yasukochi, a very powerful issue is time, as they race one another to ship the latest mannequin or breakthrough; leases have largely been for large blocks of move-in prepared area they will instantly occupy and get to work (usually, high-end workplace tenants would spend a number of money and time refurbishing their trophy places of work).
Protecting stress on a crowded rental market
The inflow of 1000’s of recent tech jobs doesn’t offset space job losses in different sectors, in addition to the tech business at giant, says Abby Raisz, Vice President of Analysis on the Bay Space Council Financial Institute. However it’s concentrating stress on the excessive finish of the rental market.
The town’s long-time scarcity of recent housing, in addition to stubbornly excessive rates of interest pushing extra high-income renters into the rental market as an alternative of shopping for, has made that phase of the market particularly crowded in 2026. McCarrel says that it’s a full-time job for somebody searching for a spot to need to repeatedly name leads and monitor what’s and isn’t out there; she doubts even an AI program made by a few of these new arrivals would assist somebody work out a brand new residing association.
“There’s too many obstacles,” she says. “It’s important to be very cautious the best way you talk with brokers and house owners; there’s a variety of competitors.”
Most forecasts see AI corporations persevering with to increase, which can carry extra jobs, and enhance competitors amongst San Francisco condominium seekers. Enrico Moretti, an economist at UC Berkeley, says as companies begin commercializing AI, there might be an explosion in hiring as funding in coaching results in extra monetization.
However the contours of this increase stay unsure; if AI instruments could make employees extra environment friendly and due to this fact shrink workplace area and headcount, the businesses most impacted by this impact might be these creating the AI within the first place.
“Now we have to throw out the concepts about the best way corporations develop proper now,” says Raisz. “AI corporations would be the finest at utilizing their tech to be environment friendly, and so they’ll be actually good about being environment friendly and never overhiring. Is AI a brand new job creator or destroyer? It’s nonetheless a query mark.”
McCarrel says the market is so robust, she’ll most likely be handing out copies of articles like this one to potential renters she works with; the method of discovering an condominium can “be like a marathon,” so finest to set expectations straight away.
