On September 2, Mayor Daniel Lurie highlighted the resurgence of San Francisco’s office market through a retweet about increasing AI leases in the city.
He remarked on the arrival of new companies and the expansion of local innovators like OpenAI, suggesting that the future of innovation is being crafted within San Francisco.
However, this optimistic outlook contrasts sharply with the realities faced by local tenants.
Over the past 12 months, San Francisco has seen the fastest rent increases among major U.S. cities, coupled with rising eviction notices.
Tech giants like OpenAI are investing millions—often tens of millions—on recruitment, driving salaries to new heights, while ordinary renters find themselves increasingly priced out of the market.
As of August, median rents for a one-bedroom apartment reached $3,069, while two-bedroom apartments averaged $3,637.
Data from Apartment List indicates that overall rent prices have surged by 11.5 percent in the past year, nearing pre-pandemic levels.
Though tenants experienced a temporary reprieve during the pandemic, rental prices remained high relative to the national average.
In January 2021, even at their lowest during the pandemic, one-bedroom rents in San Francisco still ranked as the sixth most expensive in the country.
Eviction notices are currently at their highest rate since 2018, nearly doubling from last year.
The sheriff’s department reports an average of 84 eviction orders issued monthly this year, compared to 88 monthly in 2024 and 76 in 2023.
Neighborhoods such as the Tenderloin, Financial District/Northern SoMa, and the Mission District have been at the forefront, with eviction notices in each already exceeding total notices from the previous two years.
The primary cause for these eviction notices is nonpayment of rent, with notices for this reason tripling over the past year.
Landlords issued an average of 14 notices per month for nonpayment in 2024, which jumped to 49 a month in the first eight months of 2025, according to the San Francisco Rent Board.
It’s important to note that not all notices are reported, so the actual figure is likely higher.
Ora Prochovnick from the Eviction Defense Collaborative emphasized the economic struggles post-COVID.
She shared that approximately 70 percent of their cases involve nonpayment of rent.
Real estate agent Ken De Leon pointed out a shift in landlord behavior as well.
He noted that landlords who may have been lenient during the pandemic are now less flexible with tenants unable to pay rent.
Landlords previously offered concessions to retain tenants during the pandemic, but now, with rising demand, they seem more inclined to replace existing tenants with newcomers willing to pay market rates.
Other factors, including immigration crackdowns, also play a role in a family’s ability to meet their rental obligations.
According to the U.S. Census Bureau, over one-third of renter-occupied households in San Francisco are “rent burdened,” meaning they spend over 30 percent of their income on housing.
This group includes 20 percent who are considered “severely rent burdened,” dedicating more than half of their income to rent.
Despite these challenges, city officials are viewing the rise in rents as a positive indicator for the city’s economy, with the city controller’s July report framing it as a sign of revitalization.
Ted Egan, the report’s author and San Francisco’s chief economist, noted that the growing demand for housing implies economic growth.
Egan’s sentiments resonate with some in the business community, who now perceive high rents as necessary for stimulating construction and housing development.
Corey Smith, director of the Housing Action Coalition, claimed that rising rents are essential to incentivize developers during a city hearing last year.
De Leon identified an inherent contradiction in this scenario—while economic recovery is underway, many people are facing negative consequences, such as increased evictions.
“San Francisco is coming back economically from a very hard time, and the rebound is both rapid and perhaps just in the early stages due to the likely sustainability of the AI wave,” he noted.
Many newcomers to the city are part of the AI tech surge, taking positions at organizations like Databricks, Anthropic, and OpenAI.
Patrick Carlisle, chief market analyst at Compass, remarked, “San Francisco has become the center in the country, and probably the world, of AI startups.”
The Silicon Valley Institute for Regional Studies reports that last year, San Francisco companies raised $34 billion in venture capital, a significant increase from $11.4 billion the year before.
Moreover, the Wall Street Journal detailed that AI firms have leased nearly 1 million square feet of office space in 2025 alone, comprising about 20 percent of total office leases this year.
Although downtown office capacity still lingers at approximately 65 percent, city officials remain hopeful that the AI-centric growth will rectify this disparity.
By 2030, a specialist indicated that AI firms might occupy between 12 million to 15 million square feet.
Carlisle pointed out that this AI boom is drawing talent from across the nation, leading to increased pressure on rental prices.
As the landscape of San Francisco continues to evolve with the surge of AI-driven employment, the city faces a complex challenge: balancing the needs of economic growth against the pressing realities of housing affordability and tenant stability.
image source from：missionlocal
