AI boom boosts San Francisco rentals to $4,400 a month

The boom in artificial intelligence has led to a sharp rise in rents in San Francisco. According to the newspaper The Guardian on October 8, the average cost of an apartment with 1 bedroom reached 4.4 thousand dollars per month – more than 25% higher than a year ago.

Kim Tavalone, executive director of the San Francisco Labor Council, said that even people with relatively stable incomes face financial difficulties. According to her, some residents are forced to look for housing outside the city.

One of the factors of rising prices was the high salaries of employees of technology companies. Additional pressure on the market is exerted by expectations of large payments in the event of companies working in the field of AI entering the stock exchange. This trend is especially noticeable in the areas where Anthropic and OpenAI offices are located.

At the same time, the number of cases associated with the threat of loss of housing is increasing. According to The Guardian, for the year the number of notifications of evictions in San Francisco increased by 44%. Some property owners are looking to take advantage of the increased demand by using ways to increase rent payments and evict tenants.

City officials have declared a rental emergency and proposed expanding legal support for people facing eviction.

The cost of housing affects not only workers in the technology industry. Restaurant staff, teachers, nurses and other professionals share apartments with several neighbours or move to neighbouring areas. At the same time, even permanent employment does not always allow them to pay rent without significant restrictions on daily expenses. The publication also notes that overcrowding and poor quality of housing negatively affect the psychological state of residents.

Another consequence has been the spread of the so-called ultra-long-distance daily commute to work — commuting more than 50 miles, or about 80.5 kilometers. Previously, people were more likely to settle far from San Francisco to buy their own home, but now many are forced to travel long distances daily due to the high cost of rent in the city.