San Francisco’s rental market is heating up faster than a startup’s pitch deck, with apartment prices skyrocketing and leasing times plummeting. Recent data reveals that the city’s rent increases are outpacing every other major metropolitan area in the United States, and the culprit? The booming artificial intelligence industry.

In just one year, San Francisco rents have jumped by a staggering 12-13%, with some neighborhoods seeing even more dramatic increases. Areas like Hayes Valley (13.5% increase), South of Market (11.4%), Civic Center (10.9%), and South Beach (9.3%) are experiencing the most significant price surges.

The average San Francisco apartment now rents for between $3,400 and $3,650, depending on the data source. What’s more shocking is how quickly apartments are being snatched up: the average listing is now on the market for just 20 days, compared to 46.7 days in January 2024.

The AI industry’s rapid expansion is driving this rental renaissance. Tech companies are attracting top talent, creating a competitive housing landscape that’s pushing prices skyward. Meanwhile, housing development remains sluggish, with market conditions like high interest rates and construction costs keeping new projects in perpetual limbo.

Housing experts point out that San Francisco hasn’t substantially increased its housing stock in recent years, which compounds the supply and demand problem. Developers, despite having permits, are often hesitant to break ground on new projects.

For renters and housing advocates, this trend signals a return to the pre-pandemic housing market dynamics that made San Francisco notorious for its eye-watering rental prices. The city seems poised to reclaim its title as one of the most expensive rental markets in the nation.

As the AI industry continues to grow and attract talent, San Francisco’s rental market shows no signs of cooling down. Young professionals and tech workers should brace themselves for a competitive and expensive housing landscape.