As inflation rates hit a new 40-year high in the U.S., San Francisco renters also grapple with living in the second-most expensive rental market in the country. According to rental platform Zumper, the median rent for a two-bedroom apartment in San Francisco soared to $3,950 per month in June, a 7 percent year-over-year increase.
Rent for a one-bedroom unit in the City by the Bay came in at $3,000 a month, which represents a 7.5 percent year-over-year increase. The only other large metro area in the U.S. with higher rent is New York City. The median rent for a one-bedroom there is $3,600 a month.
Interest rates climb and so do rents
There are many factors causing San Francisco rents to soar. Over the spring, more employers were requiring remote workers to report to the office for work either full-time or part-time. Because of this, workers that had left the area during the height of the pandemic began returning to the city. This demand for rental housing has pushed prices up. Rents now are approaching (and in some cases surpassing) pre-pandemic levels.
Another factor is that not enough affordable housing has been built in the Bay Area to accommodate those wanting to live here. The National Low Income Housing Coalition (NLIHC) estimates there is a shortage of 146,660 rental units in the San Francisco-Oakland-Hayward metro areas for those renters making 50 percent or less of the area’s median income.
Lastly, higher interest rates aren’t just impacting homebuyers. Renters are feeling the impact as well. That’s because some would-be homebuyers have been pushed out of the market as interest rates have increased.
As mortgage costs increase, prospective homebuyers can no longer afford to buy, so they are continuing to rent. This puts even more pressure on the rental market, meaning more renters are vying for those few apartments available to rent.
San Mateo is one area where rents have shown a sharp increase, as detailed in this report by KPIX CBS Bay Area news:
What you can do to lower your rent
One thing you can do is check out San Francisco’s online housing portal. The government agency will give you access to housing counselors that will help you explore housing opportunities in your area.
You’ll also find a limited number of income-based housing opportunities on the site for both homebuyers and renters. Last month, we reported on the availability of 31 studio apartments renting for $962 a month through an affordable housing lottery. Be aware, though—these opportunities go fast. You’ll want to check the site often and act quickly if you find a budget-friendly option that meets your needs.
Do you expect San Francisco rents to continue to climb?
And will you move out of the area if rents continue to escalate? Share your feedback in the comments section. And if you enjoyed this article, please follow, share, and like. Your support helps us continue to provide content to a larger audience. Thanks so much!