Housing rents in San Francisco are skyrocketing in the wake of the artificial intelligence (AI) boom and a series of major initial public offerings (IPOs) by related companies.

According to a rent report released on July 1 (local time) by the U.S. real estate data platform Zumper, the monthly rent for a two-bedroom apartment in San Francisco has reached an all-time high of $5,700.

As a result, San Francisco has surpassed New York, which recorded $5,620, to become the city with the highest rent burden for two-bedroom units.

While New York still holds the highest rent for a one-bedroom apartment at $4,660, San Francisco has climbed to second place with $4,060.

What is drawing more attention than the rent levels themselves is the rate of increase.

San Francisco's annual rent growth rate is 22.6% for two-bedroom units and 21.9% for one-bedroom units, a level of increase unmatched anywhere else in the United States.

During the same period, the median rent increase across the U.S. was only 0.4% for one-bedroom units, while two-bedroom units actually saw a 0.3% decline.

New York's rent growth rate also remained limited to 4% to 4.3%.

Zumper attributed this surge in rent to the AI boom.

The report noted that while major companies are actively hiring in the AI sector and leasing hundreds of thousands of square meters of office space, there are almost no plans for new construction.

Consequently, due to the supply shortage relative to the rapidly increasing demand, the occupancy rate for rental housing in San Francisco has risen to over 96%.

This rise in rent is spreading throughout Silicon Valley in the San Francisco Bay Area.

San Jose, which was already among the top five most expensive cities in the nation, saw rents rise by an additional 2.6% to 3.8%, and Oakland, which ranks in the top 15, saw a 6.2% increase for one-bedroom units.

The New York Times (NYT) recently highlighted the reality of an engineer with an annual salary of $180,000 who is packing up and leaving because they cannot afford the cost of living in San Francisco.

The rise in rent has also led to an increase in overall prices and the cost of living.

According to the Cost of Living Index released last month by the Council for Community and Economic Research (C2ER), the cost of living in San Francisco was 65.6% higher than the national average.

In particular, utility costs were 41% higher than the national average, transportation costs were 43% higher, and grocery prices were 19% higher.

Nigel Hughes, a senior researcher at real estate data firm CoStar, described the rent increase in San Francisco by stating, "It's like a pressure cooker, the temperature is really rising very quickly."

Given that SpaceX recently completed a record-breaking IPO and companies like OpenAI and Anthropic are preparing for their own public offerings, this phenomenon is expected to continue for the time being.

(Photo: Getty Images)